When Metcash’s chief executive Andrew Reiter presented the half-year results for 2011 last November, he said in the years he has been in the industry, it was the first time he had seen “serious deflation and cost pressures”.
And it appears that these same feelings still linger.
The grocery and liquor wholesaler has downgraded its full year earnings guidance from the range of 6 to 8 per cent to 3 to 5 per cent.
On top of continuing food and liquor price deflation, the company has also been severely impacted by escalating utility costs, unseasonal weather, high interest rates and value driven consumer behaviour.
“In addition, the natural disasters in Queensland and Victoria have impacted operations, albeit the full financial impact is yet to be determined,” the company said.
“Despite these impacts, it is pleasing to note that the MAT market share of Metcash's grocery retail customers remains stable at 19.6 per cent, validating the competitive initiatives undertaken during the year to maintain Metcash and its customers as the Third Force in the Australian grocery landscape.”