Moody's lowers grocer A&P's rating outlook

Moody's Investors Service on Friday lowered its rating outlook on The Great Atlantic and Pacific Tea Company to "negative" from "stable" over concerns about continued negative sales trends.

Moody's said the company's already thin operating margins may be further reduced by the continuing trend of negative same-store sales. Same-store sales, or sales at stores open at least a year, are considered a key indicator of a retailer's financial health.

Moody's said further drops could jeopardize the company's already weak credit metrics and cash flow generation.

Moody's affirmed the corporate family and probability of default ratings at "B3."

The Great Atlantic and Pacific Tea Company, headquartered in Montvale, N.J., operates 436 grocery stores in the Northeast.