Australian retailer Metcash has struck a downbeat note on its outlook for the remainder of the year, suggesting that weak consumer sentiment and a highly price-focused environment are unlikely to abate in the near term.

Addressing shareholders for the first time since he took the helm at Metcash, new CEO Ian Morrice said the company expects “underlying earnings per share dilution to be in the high single-digits”.

Morrice told the company’s AGM today (29 August) that Australian consumer confidence was unlikely to improve until there are “stable macro conditions: the election is resolved, the strength of the Australian dollar normalises and confidence returns over house prices”.

These concerns have particularly impacted the group’s food and grocery business, which is highly value driven by cost conscious consumers. Morrice added that continuing high levels of promotion are expected to result in further food deflation.

Under Morrice, Metcash’s management has commenced a “detailed strategic planning process”, which includes “the formulation of initiatives to address the issues facing food and grocery”.

An update on the company’s strategic direction, along with earnings expectations for the full year, will be provided in December.