S&P cuts Grainger, debt to A+

S&P said it lowered W.W. Grainger Inc.’s corporate credit and senior unsecured debt ratings to A+ from AA- and its short-term rating to A-1 from A-1+.

The outlook is stable.

S&P said the downgrade reflects its view of increasing competitive pressure from the online channel, resulting in lower profitability due to the company's price reductions to defend market share. Accordingly, the agency revised its business risk assessment on Grainger to strong from excellent.

As customer preference shifts toward digital channels (more than 65% of the company's orders originate digitally), Grainger's pricing and margins are pressured particularly in the U.S. and Canada, as the ease of finding products and prices online enables greater comparison shopping and continued expansion of the online channel, S&P explained.

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