Metro says sales of Canadian products outpacing total sales
Ontario and Quebec retailer Metro Inc. said sales of Canadian products are outpacing total sales in its stores.
That gap has been closing fast over the past few weeks, said president and CEO Eric La Flèche.
“Canadian products, in general, are selling well and better than the rest of the store,” he told analysts Wednesday (April 16).
In response to U.S. tariffs on Canadian goods, demand for non-American products—particularly at grocery stores—has surged over the past several months.
And retailers like Metro, whose banners include Food Basics, Super C and Jean Coutu, are tapping into Canadians’ swelling patriotism.
“In the current context, we are putting even more emphasis on local and Canadian products and optimizing their visibility in all of our banners, whether in store, online or through our various promotional tools,” La Flèche told analysts Wednesday (April 16).
His comments follow similar observations made by the CEOs of Loblaw Cos. Ltd. and Sobeys parent company Empire Co. Ltd., who recently reported higher sales for Canadian goods and lower sales for American products, respectively.
READ: Food patriotism has a price—and most Canadians say they’ll pay it
Tariffs and counter-tariffs have yet to impact Metro’s business, but La Flèche said executives are monitoring the “highly volatile” situation.
“It's been only a few weeks, and it changes every day, as we know when we read the papers,” he said. “We've received some cost increases related to counter-tariffs. We asked for six weeks notice from those suppliers. So, in mid-April, starting now, some small cost increases related to tariffs can start to be reflected.”
But La Flèche said Metro is working with vendors to justify those increases in order to minimize costs for the business and consumers.
"We're working with alternative suppliers when we can to satisfy the needs of customers who want to buy non-U.S.”
Metro reported net earnings of $220 million in its second quarter, up 17.6% from last year.
Sales increased by 5.5% to $4.91 billion as food same-store sales rose 5.3%.
Online food sales were up 26.2% year-over-year.
Pharmacy same-store sales increased by 7%.
Sales were positively impacted by the transfer of two significant pre-Christmas shopping days to the second quarter this year.
"We delivered solid results in the second quarter, driven by strong sales growth in both food and pharmacy as our teams continue to focus on bringing value to our customers across our different banners. We are actively promoting and highlighting Canadian products in our stores and online, as well as sourcing products from our international supplier base to respond to the needs of our customers. Despite the current uncertain economic environment, we are confident that our sustained investments in our retail networks and supply chain combined with strong execution will continue to fuel our growth," La Flèche said in a press release.
On the company's Q2 call with investors, La Flèche said discount is continuing to grow same-store sales faster than the company’s conventional chain, Metro.
“The focus on value that's been out there for several quarters remains. We saw that in Q2 just like we did in Q1."
But it’s hard to predict how customer behaviour will change in the face of so much economic uncertainty.
“With all this uncertainty and turbulence that we're all experiencing, how can that affect consumer sentiment, consumer confidence, over the rest of the year?" La Flèche said. "We are a staples, essentials, goods retailer and distributor. We're well positioned in any type of environment. We're confident that we'll continue to grow, but there's volatility and uncertainty, and that affects customers, and it ultimately can affect businesses.”
