LONDON, April 29 (Reuters) - Tesco, Britain'sbiggest retailer, was dealt a fresh blow on Tuesday afteranother ratings agency warned of a possible cut to its creditrating in the wake of its recent poor performance.
Earlier this month Tesco Chief Executive Philip Clarke vowedto win back shoppers with millions of pounds of price cuts afterthe grocer posted a second straight year of falling profits.
Standard & Poors said it had revised its outlook for Tesco'sdebt to negative from stable.
"The outlook revision reflects a greater decline in Tesco'slike-for-like sales in the UK than we anticipated, and lowerprofitability across its retail operations," it said.
Though S&P affirmed it "BBB+/A-2" long and short-termcorporate credit ratings on Tesco, it believes the firm willfind it hard to reverse the negative market and operating trendsthat are adversely affecting its sales and profitability.
It said a continued decline in Tesco's market share, salesand profit could result in a one-notch downgrade.
The stance by S&P follows one by rival Moody's on Friday toplace its BAA1 rating for Tesco on review for downgrade.
In common with Britain's three other leading grocers -Wal-Mart's Asda, Sainsbury's and Morrisons - Tesco has been hit on two fronts, by the discountchains Aldi and Lidl and by Waitrose and Marks & Spencer at the premium end of themarket.
Monthly industry data, published April 8, showed Tesco's UKmarket share had shrunk to 28.6 percent, its lowest level innearly a decade. (Reporting by James Davey; editing by Kate Holton)
Tesco (TSCO)
Marks & Spencer (MKS)
Sainsbury's (SBRY)
