2025 Global Retailers Outlook: Light at the End of the Tunnel for Discretionary Retail?

Our outlook for global retailers in 2025 is stable, reflecting our view that credit risk profiles will remain relatively stable at the current rating levels.

Key highlights include the following:
-- Our outlook for the global retail sector is stable for 2025.
-- Despite near-term earnings pressure, we expect the trading environment to improve with easing inflation and normalization in consumer behaviour.
-- We believe retailers will focus on volume recovery for top-line growth and anticipate EBITDA margin growth to remain challenging during this period.
-- We don't expect to take any credit rating actions solely because of broader sector trends over the next 12 months.
-- We believe that any credit rating actions will largely be driven by company-specific events such as merger and acquisition activity, capital allocation priorities, and/or operational execution/failures.

"We believe with stability in the macroeconomic environment across major economies, retailers in our portfolio are better positioned to navigate this period without any material credit rating changes," said Vikas Munjal, Vice President, Corporate Ratings - Diversified Industries. "That said, there is considerable uncertainty given the potential shifts in U.S. policy following the 2024 election (particularly regarding tariffs), as well as global geopolitical risks, both of which could affect the generally positive macroeconomic conditions."