Skip navigation

Supermarket Revenues Seen Flat Into ’10

Moody's Investors Service here last week said it expects revenue growth in the supermarket industry "will remain close to flat or slightly negative" into early 2010. In a report, the debt-ratings agency said it expects that "most" supermarkets will be able to maintain cash flows near current levels, thanks to cost-reduction initiatives, although it said some companies in the sector will be pressured.

NEW YORK — Moody's Investors Service here last week said it expects revenue growth in the supermarket industry "will remain close to flat or slightly negative" into early 2010.

In a report, the debt-ratings agency said it expects that "most" supermarkets will be able to maintain cash flows near current levels, thanks to cost-reduction initiatives, although it said some companies in the sector will be pressured.

"Our concerns center around those companies with very thin operating margins or low debt service coverage metrics, which may not have the financial or operating flexibility to withstand persistent pressure on the top line," Moody's said in the report.

It said it expects shoppers to continue their frugal buying behaviors with regard to choosing both lower-priced products and lower-priced venues. The habit of shopping multiple stores for the best deals "is exhausting," Moody's said, and will be replaced by a migration to stores that "provide a consistent environment and known product selection."

Read More of Today's Headlines