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Metro plans for the next phase of digital growth

Recent investments in e-commerce are registering with consumers and have set the foundation for future growth

Metro said Wednesday morning that it remained focused on growing its e-commerce business as demand for online grocery shopping continues more than a year into the pandemic.

Speaking during a call with analysts Wednesday morning following the release of its second-quarter earnings, La Flèche announced plans to expand its click-and-collect and home delivery service.

Metro will introduce home delivery to Ottawa this summer and La Flèche said its click-and-collect offering would grow from 45 to 170 stores by the end of September.

This comes as the Quebec-based grocery and drugstore retailer reports a 240% year over year increase in online food sales, which La Flèche contributed to increased capacity.

In the last year, Metro opened a hub store in Quebec City and Toronto to fulfill click and collect and delivery orders, and expanded its partnership with delivery service Cornershop to include its Adonis banner.

“In terms of bookings, trying to get your order delivered in the next day or so I think it’s a lot better than it was a year ago,” he said. “Our systems are better at capacity, service is a lot better. There are some windows open mid-week, it’s not completely full but we’re seeing good solid sales from our hub stores.”

The response to click and collect is “not overwhelming” but it is ramping up and so far demand is higher in smaller markets, said La Flèche.

“We expect there will be some demand for that service so we’re managing through that store by store,” he said. “The volume is not high but it’s a work in progress and contributing overall to the online sales numbers that we report.”

The grocer’s investment in technology extends to electronic shelf labels and self-checkout kiosks. Metro has about 260 stores with self-checkouts and is planning another 90 this fiscal year, said chief financial officer Francois Thibault.

Metro reported a second-quarter profit of $188.1 million, up from $176.2 million a year ago.

Sales in the quarter totalled $4.19 billion, up from $3.99 billion. Food same-store sales were up 5.5%, while pharmacy same-store sales were down 0.8%.

Metro said COVID-19 related expenses totalled $29 million in the quarter, including $8 million spent on gift card bonuses for front-line staff.

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