DISTRESSED DAILY: Inflation Takes Toll on 99 Cents Only Stores

Persistent inflation isn’t kind to 99 Cents Only Stores’s business model.

The retail chain, which these days does sell goods for more than 99 cents, has been battling lower customer foot traffic and a slow rebound to pre-pandemic levels. Making matters worse, S&P Global Ratings expects 99 Cents Only to face “inflationary pressures on merchandise and payroll as well as supply chain constraints in fiscal 2022.” The credit grader cut the firm’s outlook to negative from stable in a report Friday, while affirming its CCC+ rating.

The weak customer traffic, especially in its key California market, is crimping cash ...