Consumer Stocks fall 8%, not Considered as safe Haven Anymore

Published Date : Aug 25, 2015

The consumer stocks in Canada have for quite some time, been taken for granted as a refuge for a falling markets. The case was anything but on Monday.

There was an 8.14% drop in shares on the S&P/TSX consumer staples on Monday. This includes consumer goods industry’s finest, including Maple Leaf Foods Inc., Alimentation Couche-Tard Inc., and Loblaw Cos. Ltd., which is the largest drugs and groceries retailer in Canada. All three companies fell by 4.46% despite experts’ claims of them remaining stable.

The list also includes Restaurants Brands International Inc. which fell 3.6%, Canadian Tyre Corp. Ltd. which fell 2.19%, and Dollarama Inc. which fell 3%.

It seems more possible for people to be taking consumer stock profits at the moment instead of buying more stock, according to Bob Gibson, an Octagon Capital Corp. retail and consumer analyst.

He also said that a people are more interested in earning profits. One place where they can do so from consumer goods is when the brands have performed really well. He also added that if a consumer is seeking to hold something that could possibly reveal major losses in the near future, there is a chance for a consumer to neglect the drop right now. Consumers will be looking to sell stocks the moment share prices recover at the slightest.

A retail consultant from Toronto, Bruce Winder, said that the concerns regarding further investments is starting to affect the current state of most other markets. He also said that since the North American stock markets are showing a stronger rate of volatility, people are getting slightly nervous about spending at the consumer level.