Profit warning puts dent in Metcash Dark days at Metcash. Metcash issued a shock profit downgrade at its annual meeting on Wednesday, warning that earnings per share could slump as much as 9 per cent due to cut-throat competition between the major supermarket chains, thrifty-minded shoppers and escalating fuel docket schemes. Shares in Metcash dived nearly 6 per cent on the earnings warning from new boss Ian Morrice who was fronting his first AGM since replacing company veteran Andrew Reitzer. Mr Morrice provided a pessimistic view of the retail landscape, characterised by low consumer confidence, but also blamed the profit slide on the intensification of petrol discount schemes offered by his biggest rivals, Woolworths and Coles, which he said had gone "off the scale" during the first quarter of 2013-14. "It's tough across the board ... quite frankly all those things are factors ... but the escalation of fuel dockets in this last quarter was off the scale to what has happened in the past and that has had an impact on volumes," he said. Independent retailers including Metcash have squealed about the use of petrol discounts by Woolworths and Coles, especially as the discounts offered at the pump hit as much as 45¢ a litre recently. They have labelled the schemes anti-competitive, arguing independent supermarkets were locked out of the promotion as they lacked a fuel arm like the supermarket giants. But thrifty-minded consumers were also dragging down Metcash's earnings and management expected the poor trading conditions for its flagship food and grocery wholesale arm to remain for the remainder of fiscal 2014. Mr Morrice said given the bearish retail environment, Metcash expected underlying earnings per share to decrease in the high-single-digit range. This would mean its earnings per share could fall as much as 9 per cent, and was against expectations among analysts of EPS growth of about 2 per cent. He said consumers were cost-conscious, driving price deflation as Woolworths and Coles brought down shelf prices and forcing the near-1500 independent supermarkets supplied by Metcash to follow. This meant slimmer margins for Metcash as it shipped groceries from its warehouses to its supermarket customers, with shrinking volumes also a likelihood as the independents reserved their cash and drew down on existing inventories of food and general merchandise. Metcash said all its divisions were performing "to plan," with the exception of its flagship food and grocery business. Shares in Metcash fell 6 per cent on the earnings warning, closing down 20¢ at $3.25.