Competition in the Australian supermarket and home improvement sectors remains intense, and is likely to continue to pressure Woolworths' revenue and margins. We expect these weak earnings trends, coupled with the company's large and growing fixed cost base, will maintain Woolworths' credit measures outside tolerances for the previous 'A-' rating in the next 1-2 years. Accordingly, we have lowered the long term rating on Woolworths to 'BBB+' from 'A-'. The outlook on the long-term rating is stable, reflecting our view that the group can sustain its competitive position and financial risk profile at levels consistent with the 'BBB+' rating, despite the challenging operating environment. On Aug. 28, 2015, Standard&Poor's Ratings Services lowered its long-term rating on Woolworths Ltd.
