Australian Investment Blog

Please see our Market Video Update 1st October 2014, Banks, ANN and Gold

Do not get complacent with dividends, they can be cut!

Last night, J C Sainsbury’s (SBRY.LN), dropped 7% to an 11 year low (chart 1), as it battles the impact of discount stores. The second largest supermarket chain in the UK has declined 45% since November 2013 and last night’s statement that they would be reviewing their dividend policy accelerated the decline. Size has been no insulation to the damage inflicted by the discount stores, with Sainsbury’s being over 9 times larger than both Woolworths and Wesfarmers combined. The concerning factor to the two local dominant players in our supermarket business, is the discount stores are gaining traction.