Fitch affirms Big Food Group

Fitch Ratings said it affirmed The Big Food Group plc's ratings at senior unsecured BB- and short-term B. Fitch also affirmed the B rating on the company's £150 million 9.75% senior subordinated notes due 2012.

The outlook remains stable.

Fitch said Big Food Group's ratings reflect its significant position within the growing convenience retail segment, via the Premier symbol group and the Iceland retail stores. The initial impact of the company's turnaround strategy launched in February 2002 was seen in its improved like-for-like sales growth in the fiscal year ended March 2004 (+1.5%), although Iceland (+0.7%) was still lagging behind the food retail sector average.

However, increasing competition and price deflation from larger players also targeting the convenience sector in pursuit of organic growth have weakened like-for-like sales growth in first quarter 2005, including those Iceland stores that were first converted in fourth quarter 2003.

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