Citing "weak" retail sales in the fourth quarter, a financial analyst on Wednesday downgraded his rating on shares of Vitamin Shoppe (VSI: NYSE). 

In a research note reducing his rating to "Market Perform", Mark Miller of William Blair said "increased competition and rising price transparency are making incremental margin expansion more difficult" while "lower private brand penetration makes 'window shopping' easier, particularly given the high degree of overlap with the e-commerce competitors".

The analyst also noted Vitamin Shoppe is in the latter stages of its opportunity for U.S. growth.

In a separate note, Miller reduced the rating on GNC Holdings (GNC: NYSE) to an "Underperform". He characterized analysts' projections for comparable-store sales growth (9%) and earnings per share (nearly 20%) growth as "aggressive".

He also cited risks associated with products being hawked on a prominent ecommerce site below GNC's listed price. Specifically, Miller noted GNC products were being sold on Amazon at 21% less than GNC's listed price based on a review of 100 items. The discount widened versus 18% six months ago, Miller said.  According to the analyst, third-party sellers on Amazon buy GNC's product when the retailer runs BOGO (buy one get one) promotions.

Although Miller acknowledged the general resilience of the VMS (vitamins, minerals and supplement) segment during a softer economy, he said the fourth quarter may have been an exception.

The analyst referenced the performance of Royal DSM, a Netherlands-based company. In an earnings release Jan. 21, Royal DSM cited lower demand for dietary supplements in the United States, especially in the omega-3 fish oil category.

Vitamin Shoppe and GNC have not yet reported their fourth-quarter results.

In the third quarter ended Sept. 28, 2013, Vitamin Shoppe's net sales rose 14% or $33.5 million to $272.5 million over the year-ago period. Excluding $18.4 million in sales from its $50 million acquisition of Super Supplements that closed in February, Vitamin Shoppe reported $11.5 million in sales growth from specialty supplements and sports nutrition, and a $1.4 million increase in sales from vitamins, minerals and herbs.

GNC has achieved growth as well. Third-quarter consolidated revenues increased 8.7% to $675.6 million, with retail enjoying the biggest bump (9.5%) ahead of franchise (9.3%) and manufacturing/wholesale (2.4%).