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Moody's expects flat revenues for supermarkets
Moody's Investors Service said it expects that revenues of U.S. supermarkets will remain suppressed for the near future.
"A combination of factors, including food deflation, defensive price reductions, and lasting changes in consumer behavior are responsible for the trend of declining top line," Marie Menendez, senior vice president of Moody's, said in a statement.
While the agency expects total revenue growth will be flat or slightly negative, it believes that cost reductions and modest growth plans will allow most supermarkets to maintain cash flow and debt-servicing ability near current levels.
Moody's concerns center around those companies with very thin operating margins or debt service metrics that may not have the flexibility to withstand persistent pressure on the top line.
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