Fierce competition between Coles and Woolworths has resulted in grocery wholesaler Metcash spending twice as much on marketing.
Chief executive Andrew Reitzer said the war between the two supermarket giants had caused Metcash, a distributor of groceries and liquor to independent retailers such as IGA, had to increase its advertising just to maintain its customer base.
"We've had to increase our marketing spend and our marketing exposure," he said.
"It just means to hang on to what you've got or to grow as you would expect to grow you're spending twice as much on marketing."
Mr Reitzer also reiterated Metcash's earnings guidance at its annual general meeting in Sydney on Thursday of an earnings per share dilution of between one and three per cent in fiscal 2013, compared with underlying EPS in the prior year.
Metcash had adjusted its earnings guidance on Wednesday after assessing its June capital raising and recent initiatives including taking full ownership of hardware chain Mitre 10.
Previously, Metcash had targeted EPS growth in low to mid single digits in fiscal 2013.
Mr Reitzer also said considering the current low consumer sentiment and the marketing war between Coles and Woolworths, the company's net profit of $90 million for the year to April 30 was a good result.
The result was down from $241.4 million in the previous year.
"The group's results were very strong given the operating environment," he told the meeting.
He said he was unconcerned with the current rollout of Woolworth's Masters hardware stores as the chain, like Bunnings, was targeted more at the DIY market whereas Mitre 10 also sold directly to tradesmen.
"We're not worried at all. We're in a totally different space," he said.
"Masters is like Bunnings it's a big box. We don't have any big boxes. We're more suburban and rural town and 50 to 70 per cent of our business in trade."
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