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Fitch, pessimistic for large retailers in 2009

Find below an AFP report dated 14 May that I have voluntarily decided published in full because it is self-explanatory and does not deserve further comment as the rating agency Fitch Ratings East:

For retail, 2009 "is one year lost "(Fitch)

" The effects of exchange, slower inflation and falling sales volumes should greatly affect the European brands of large retailers, most of which will stop their policy of expansion, said the rating agency Fitch on Thursday.

"2009 is a lost year in terms of growth for all retail brands, which will focus on their core market and core business," he told a press conference Johnny Da Silva, Research Director at Fitch. Last year, the distribution had resisted increasing food prices, which had helped offset volume declines.

But in 2009, the fall in consumption due to the crisis continues, but inflation is also slowing. As a result, overall growth in sales the first six food groups in Europe (Carrefour, Tesco, Casino, Sainsbury, Metro and Ahold) is expected to melt at 4% this year against 8% in 2008, according to Fitch. The non-food retailers should continue to suffer this year after suffering adverse trade-offs of consumers in 2008.

sales of these brands (Kingfisher, Marks and Spencer, Next, DSG) is expected to grow by less than 1% in 2009 against 1.5% in 2008. The impact of exchange rate effects is also very important (down the pound sterling for UK retailers, distributors strong euro for French and German). Exchange rate effects are expected to cost between 1% and 3% of sales of European brands, predicted Mr Da Silva.

In response to these problems, food distributors and food should not reduce their investment of -15% and -45%, in particular the expansion investments. Carrefour has already announced earlier this year want to focus on France, its traditional market, while the Tesco development on the UK and Metro in Germany. top ten brands in this study, Fitch indicated that only the British and Dutch Ahold Sainsbury have a room for an expansion policy. The former because it has already restructured in the early 2000s and the latter because it leads a conservative financial policy, "said da Silva.

The decline in consumption also affects the brunt of the food and liquor. food companies Nestle, Unilever, Danone and Cadbury and should register increases in sales of up to 2%, far from the goals of 5% to 9% target set by these companies, "says Fitch.

Net business of wine and spirits companies (Diageo, SAB Miller, Carlsberg, Pernod Ricard) should be between -2% and +2%, after growth located within a range from +5% to +7% per last year. Benefits should be either stable or decline after an increase between 5% and 9% in 2008 and up to 27% in 2007. People not only consume less liquor, but they also refer to the cheaper brands, Fitch noted. "