Metro reports discount growth in Q1 as consumers continue to seek value
Metro Inc. has reported discount and online sales growth in the first quarter as shoppers continue to grapple with high food prices.
The retailer said discount continues to drive same-store sales faster than Metro’s conventional stores, with the gap between them remaining consistent with the prior quarter.
“In the food sector, the search for value by consumers is stronger than ever. Certain categories, such as meat, coffee and fresh vegetables, were particularly impacted by shortages, increased production costs and international trade tensions,” said Metro chief executive officer Eric La Flèche in the retailer’s 2026 annual report. “These issues, which are beyond our control, kept pressure on the grocery basket.”
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Metro plans to grow its discount banners with plans to open a dozen new or converted stores in fiscal 2026.
In Q1, Metro opened three stores and carried out expansion and renovation projects at three other stores for a net increase of 88,600 square feet, or 0.4%
“We're in this environment where cost of living is hard. The price of food is key on people's minds and they’re making choices. They're changing stores or they're buying on promotion,” said La Flèche, during a conference call on Jan. 27. “If you don't offer value, you don't attract customers. So, that’s what we do. [...] The fact is, there are more stores opening so that added square footage adds more pressure in the sense of more competition with the same promotional intensity.”
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Online sales were up 25.8% versus last year, which La Flèche says is driven by “third-party marketplaces, the ramp up of click-and-collect services, as well as the launch of delivery in our discount banners.”
Metro reported its sales for the quarter totalled $5.29 billion, up from $5.12 billion a year earlier. Total sales for Q1 2026 were up 3.3%.
The increase came as food same-store sales were up 1.6% and a 1.3% increase in front-of-store sales.
Pharmacy same-store sales also increased, rising 3.9% with a 5.1% increase in prescription drugs.
Food basket inflation was reported to be under the reported CPI of 4.1% for food purchases from stores.
Metro stated in its outlook that sales were negatively impacted by the transfer of one significant pre-Christmas shopping day to the second quarter this year and by the temporary shutdown of the frozen food distribution centre.
The retailer said the temporary shutdown of its frozen food distribution centre in Toronto is now behind it.
“As operations have fully resumed, our contingency plan was effective in securing supply across our Ontario food store network,” said Nicolas Amyot, executive vice-president, chief financial officer CFO and treasurer, Metro, during the call.
The direct cost associated with the operational hurdle and related contingency plan amounted in the quarter to $15.9 million (post-tax). The retailer notes the results have been adjusted for these costs.
