Metro e-grocery sales surge 280% amid COVID-19

With a surge in demand during the pandemic, Metro president and CEO Eric La Flèche says the grocery company's e-commerce service is now a "profitable business."

Speaking during a call with analysts Wednesday morning following the release of its third-quarter earnings, La Flèche said online food sales increased by 280% year over year.

E-grocery has reached sales levels the grocer wasn't expecting to see for another two to three years, La Flèche said. Though the increase is significant, he was quick to remind analysts that it was working with a small sales base to begin with.

Online sales were boosted by new customers ("Hopefully they stick around," he said) and existing customers who shop both online and in store--a consumer behaviour Metro tracks through its Metro & Moi loyalty program, said La Flèche.

To better meet growing demand, Metro is expanding its grocery delivery service to nine "hub" stores in Quebec.  In Ontario, Metro is adding a third hub store in Scarborough in October to serve the east end of the Greater Toronto Area.

"We have invested in technologies and training for our people," said La Flèche. "We will continue to leverage that as we evolve the hub store model to serve the growing demand."

Metro is also expanding its click-and-collect offer to 30 additional stores in Québec and Ontario in fiscal 2021. These stores will not offer delivery, said La Flèche. And, as previously announced, Metro has partnered with Cornershop on same-day, two-hour delivery in Ontario and Québec.

"We have learned a lot in the last four years, and we will be leveraging the investments we made in building teams and expertise in the delivery of full fresh basket to the homes of Québecers and Ontarians, including robust technologies and competencies in customer web interface, picking and home delivery," said La Flèche.

Given the extraordinary circumstances of the pandemic and the surge in online orders, La Flèche said the team delivered a "decent" e-commerce experience, but improvements and refinements to the service need to be made.

"It's been a challenge. It's far from perfect. And we need to improve, and we will improve it,"said La Flèche. So I'm not going to give you a rating other than to say that under the circumstances, I think we did well. But clearly, it's something that will need to be refined and improved."

Metro reported a profit of $263.5 million in the latest quarter, up from $222.4 million a year ago.

Sales totalled $5.84 billion, up from $5.23 billion. Food same-store sales rose 15.6%, while pharmacy same-store sales edged up 1%.

Metro says expenses related to COVID-19 totalled $107 million in the quarter, for the 16-week period ended July 4.