The Metcash Limited (ASX: MTS) share price hit a 52-week low of $2.25 today to close down 3.8% at $2.25. The Metcash share price has now lost 27% over the course of 2018, with the benchmark S&P/ ASX200 (ASX: XJO) index down 6.8% over the same period.
Metcash shares have been sliding since the IGA store supplier and operator revealed a weaker-than-expected financial result for the half-year period ending 31 October 2018. For the period Metcash posted an adjusted net profit of $100.3 million on revenue of $6,189 million.
The group's food and liquor business is struggling to grow profits as fast as revenues due to a tough competitive environment putting pressure on margins. This is because the likes of Coles (ASX: COL) and Woolworths have sacrificed their own margins in order to defend market share from the likes of Aldi.
However, Metcash's hardware business under the Mitre10 brand continues to boast healthy profit growth thanks to a more benign competitive environment among other things.
However, the share price is falling as investors worry its core food and liquor business faces an uphill battle.
