SAINSBURY'S released sales numbers for their second quarter last week and, to those of you who don’t live under some form of geological object, it came as no surprise that they disappointed.

Part of the disappointment was because of what they did say but mainly it was due to what they didn’t say.

What was in there was that, excluding fuel, like-for-like sales were down 2.8 per cent.

New chief executive Mike Coupe won’t like that one bit considering his predecessor Justin King oversaw 36 consecutive quarters of like-for-like sales growth.

What they didn’t say was probably more telling, given the fact that intense competition within the sector meant that sales were expected to have dipped.

In fact the fall was better than expected, if that’s not a complete contradiction in terms.

This concerned the dividend, which many feel is in serious jeopardy.

All that was offered was basically that a financial review is being conducted and everything is in the firing line, by obvious implication this includes the dividend.

Reassurance was conspicuous by its absence and many, many investors hold the stock for the income.

Talk of an impending price war in the UK supermarket sector surprises me.

Not because I don’t think it will occur, but because it already is, and has been for some time.

There is nothing impending about it.

Sainsbury's themselves benchmark 14,000 of their prices to their equivalent at Asda.

Much is made of the whippersnappers (in UK terms) at Aldi and Lidl undercutting all and sundry.

When setting their prices everybody looks at everybody.

It’s all-out warfare with baguettes and shampoo.

The two companies in the spotlight at the moment are Sainsbury's and Tesco.

Sainsbury's, under no suspicion of wrong doing, merely posted negative numbers and sounded the financial alarm.

Because they happened to follow Tesco’s ‘mea culpa’ of a fortnight ago, then they have probably been scrutinised more fervently than they might otherwise have been.

Rightly or wrongly I’ve always regarded Sainsbury's as Tesco’s calmer, more intelligent older brother, reliably building its business slightly further away from the spotlight whilst their buccaneering sibling took on the world. Sainsbury: the Noel Gallagher of the supermarket world; Tesco: Liam. Both are…were…are…successful, just via different modus operandi.

We often bemoan a lack of competition in certain popular sectors such as energy and satellite TV.

This price war is currently great for consumers, keeping prices in check as it is, but let’s hope it doesn’t result sometime down the line with a high profile corporate casualty.

It would be a strange twist indeed if competition, the supposed medicine, ended up harming the patients.

Margins in the supermarket sector are historically wafer thin and the falling revenues that will result from this price war won’t help matters.

Ideally, dividend payments are supported by reliable spare cash from earnings, which seems ever less plausible.

One short-term solution is to tighten belts, but the Big Four have actually indicated their intention to spend billions to counter the growth of Lidl and Aldi.

Sainsbury's is still committed to 750,000 square feet of new space this year.

Mainly this will be on convenience stores, and putting the financial implications to one side, this is a strategy no one would contend.

Sainsbury's wised-up to the changing trends of smaller basket sizes and more frequent shopping at smaller stores on estates rather than big out of town steel boxes some time ago.

But we could certainly question the sense in big spending at a time of contracting top lines.

The larger names in the sector certainly have a good chance of rolling with the punches and developing their competitive advantages. But for now market forces, rather than company specifics, are in the driving seat.

Nick Williams is an assistant director at Brewin Dolphin and offers advice on a wide range of financial services to private clients, trusts, charities and pension funds. Past performance is not an indication of future performance. The value of any investment and any income can fall and you may get back less than you invested. No investment is suitable for all people and should you have any doubts you should consult an authorised financial adviser.

The information contained in this article has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.