Fitch: Pick n Pay to negative

Fitch Ratings said it revised the outlook on Pick n Pay Stores Ltd.'s national long-term rating to negative from stable and affirmed it at A(zaf).

The short-term rating also was affirmed at F1(zaf).

The negative outlook reflects the slower-than-expected pace of deleveraging until 2014, reflecting the increased pressure on Pick n Pay's business profile in the highly competitive South African retail environment, Fitch said.

This has been exacerbated by delays and challenges faced with the execution of the group's ongoing operating transformation strategy in an effort to meet changing dynamics within the South Africa retail sector, the agency said.

It also reflects the group's significant exposure to consumer spending in the South African retail market, which has been negatively affected by decreasing disposable income as a result of increasing fuel and electricity prices, Fitch added.

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