Morning Report Thursday 23 October 2014
See our Market Matters video update 22nd October - Medibank, Interest Rates and Top Pick
Australian large retailers recover some losses but beware the future
With the major supermarket chains, Woolworths (WOW) & Wesfarmers (WES) up an average of 2.8% over the past 2 weeks, we reconsider our sell recommendation. Let’s go back and look at two large retailers in the UK that have been under immense pressure recently, as cut price competition eats into profits (locally, think stores like ALDI). Two days ago, it is reported J Sainsbury is suffering its worst sales performance since the 1990s. This is not long after Tesco announced their recent released profit warning and earlier overstated its first-half group profit by around 250 million Pounds, wiping a fifth off its market value.
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