Woolworths' sales announcement for the third quarter ended March 2016 highlighted continued market share losses and the company's intention to make significant additional price and service investment in the core Australian supermarket business. In addition, Big W recorded material revenue declines during the quarter. As a result, we no longer expect the group to sustain its key credit measures and overall credit profile at levels consistent with the 'BBB+' rating. Accordingly, we have lowered the long-term rating on Woolworths to 'BBB' from 'BBB+' and affirmed the 'A-2' short-term rating. The outlook on the long-term rating is stable. This reflects our view that the group has adequate flexibility at the 'BBB' rating to accommodate the expected margin erosion in its core
