Endeavour Group's (ASX:EDV) retail market share recovery following disruption at its Melbourne distribution center has been slower than expected due to a "more challenged" backdrop and executive departure, according to a Tuesday note by Euroz Hartleys.

On Feb.27, the group reported that its earnings per diluted share in the fiscal first half fell to AU$0.167 from AU$0.196 a year earlier.

The group also said that its Chairman Ari Mervis will be appointed as the Executive Chairman, effective Monday, March 17, and that Chief Executive Steve Donohue will step down after the appointment.

Endeavour's retail and hotel businesses are its "strong strategic moats," Euroz noted, adding that market share gains are crucial for the company, as liquor retail growth slows due to declining per capita volume from structural factors and consumer trade-down.

Euroz believes that BWS, the group's convenient drink retailer, could lose its competitive edge over independent liquor retailers that offer the same convenience.

The firm downgraded Endeavour's rating to Neutral and lowered its price target to AU$4.50.

Shares of the group fell 2% in recent Tuesday trade.