U.S.-based hard discount grocer Moran Foods LLC (Save-A-Lot) continues to underperform our expectations because of intense industry competition and delays in implementing its transformation plan. We expect competitive pressures will result in accelerating weak company performance trends through fiscal 2019, with leverage to rise above 10x at year end and free operating cash flow to turn negative. We are lowering all of our ratings, including the issuer credit rating to 'CCC+' from 'B-'. We are also revising our recovery rating on the senior secured term loan to '4' (30%-50%; rounded estimate: 45%) from '3'. The negative outlook reflects our view that profitability will decline over the next year amid a tough operating environment and heightened execution risk. On Aug. 13,
