The article examines how debt and financial performance are connected in European retail before the pandemic. By using machine learning, the study found that EU food retailers' solvency risk decreased after the global financial crisis. Liquidity risk is common in the retail sector, but the trade-off between solvency and liquidity is lessening over time. Stable liquidity levels help lower financial distress risks for retailers. Higher solvency risk is linked to more efficient asset use but lower profitability. Retailers should focus on financial indicators rather than their volatility to manage solvency risk.