Customers look on as a Walmart cashier rings up their purchases at a Walmart store on August 15, 2019 in Richmond, California.

Moody's Investors Service is predicting slower growth ahead for retailers, as price wars and big investments weigh on profits.

The debt rating agency cut its operating profit growth forecast for the year to between 2% and 3% from a prior estimate of 5% to 6% growth. In 2018, retailers posted a strong 4.9% growth rate. Moody's expects sales to rise between 3.5% and 4.5% from a prior estimate of 4.5% to 5.5% this year.

Intense competition and the cost of integrating e-commerce with brick-and-mortar stores is hurting the industry's performance, Moody's said. It also cut its outlook for the sector to stable from positive.

Retailers are engaging in pricing wars and investing in e-commerce capabilities as they battle for market share, Moody's said in a report. Apparel, footwear, specialty retailers and department stores continue to underperform.

"The competitive landscape is becoming very, very challenging," said Mickey Chadha, a vice president at Moody's. "The small guys that are facing a lot more competition aren't keeping up with the pricing pressure and aren't doing as well."

Most retailers are investing a lot of money into e-commerce platforms and adjusting their brick-and-mortar stores to a changing shopper. Take, for example, a store that is 60,000-80,000 square feet, the report said. The company likely doesn't need a store that large, but if it doesn't want to close the store, Chadha said, they can use part of it as a warehouse.

"Just closing a store randomly actually could hurt you as a retailer," Chadha said. "Because as e-commerce and brick-and-mortar are integrating towards one channel where you're agnostic as to where you buy, a store does offer some compelling reasons to be there because you can buy online and pick up in the store or if you buy online, you can return in the store."