Fitch Ratings says in a new report that the outlook for the European consumer and retail sectors is not uniformly negative, notwithstanding a pronounced consumer downturn in 2008 which will likely last through 2009.

"While the broad trend is negative, and a number of companies continue to exhibit varying degrees of stress, others will remain relatively stable," says Edward Eyerman, Managing Director and head of Fitch's European consumer and retail team.

Retail operators appear most vulnerable to the economic downturn - and particularly non-food retailers, which are by nature more cyclical and less geographically diversified. The credit outlook for the food sector, on the other hand, is generally stable, with the packaged food companies such as Nestle and Unilever benefiting from diversified portfolios of staple products.

Trading remains favourable for the major tobacco players which should continue to report growing profits due to their ability to promote premium brands in markets where disposable income is rising, and raise prices in mature markets. The credit outlook for beer companies is stable due to improved geographical diversification and continuing growth in emerging markets, despite recent debt-funded consolidation in the industry.