Report: Retail Industry to Face More Pressure in ’09
New York City The 2009 outlook for U.S. retail ratings indicates another year of heavy downward pressure, according to a new report by Standard & Poor's Ratings Services titled "Weak Economy Portends More Pressure On U.S. Retail Ratings In 2009," published on RatingsDirect.
"With the economy in a recession and consumers in turmoil due to sharp declines in discretionary incomes and rising unemployment, we see 'stay-away-from-stores' behavior continuing well into 2009," said Standard & Poor's credit analyst Gerald A. Hirschberg.
Retailers have drastically cut back inventories for 2009 and although this is likely to mean weak sales, it could strengthen gross margins.
"Nevertheless, we expect that future rating actions will be decidedly negative again in 2009,” Hirschberg said.