Price increases returning to more ‘normal’ levels: Metro chief
Shoppers can expect to see cost increases from large CPGs reflected in retail prices next month, Metro Inc. president and CEO Eric La Flèche said.
“The good news is the number of increases is going back to more normal levels compared to what we saw in the last two years,” La Flèche said on the grocer’s first quarter earnings call Tuesday (Jan. 30). “There's a substantial reduction in the number of requests. The size of the requests varies, but the general average is certainly lower than what we saw last year.”
Metro – which operates retail banners including Metro, Food Basics, Super C, Jean Coutu and others – reported net earnings of $228.5 million for Q1, down 1.1%. Sales were up 6% to $4.97 billion.
Food same-store sales rose 6.1%, or 3.4% when adjusting for the Christmas week shift, Metro said. Pharmacy same-store sales increased 3.9%.
La Flèche said the company was pleased with the performance of its discount food stores. Metro opened three new Super Cs during the quarter, bringing the banner’s total footprint to 106 locations.
READ: Metro talks supply chain investment, discount growth
“Over the last 15 months we opened nine new discount stores in Quebec and Ontario and another four are scheduled to open this fiscal year,” the executive said.
La Flèche noted that private label sales continue to grow at a much faster clip than national brands, maintaining the status quo from the previous quarter.
Metro’s Moi loyalty program, which had its soft launch last spring, now counts more than 2.5 million active members – up from 2.2 million in Q3 last year.
“Members swipe swipe rates, loyalty sales penetration, and member engagement rates continue to grow across all banners and have surpassed all past program metrics from metro&moi at Metro and Air Miles at Jean Coutu,” La Flèche said. “We see cross-shop spending and visits increasing with potential for more as we leverage our personalization capabilities.”
La Flèche also provided an update on Metro’s new automated distribution centre (DC) in Terrebonne, Que.
“During the quarter we completed the transfer of all frozen products as well as fresh seafood. We are currently transitioning fresh meat and deli products. And as I said, productivity in the facility is tracking the business plan as our teams are leveraging our experience from the commissioning of our DCs in Toronto,” he told analysts.
“It's a big project. That's why we talked about headwinds and the extra expenses that we incur to start-up a big building like that. But [we have] a lot of learnings from the Toronto projects. A lot of our teams here in Quebec went to Toronto to work in the startup over there. So everything's going faster and better. And we plan for it – the budgets we made, the plans we made and the guidance we gave you were based on tighter, better, quicker wrap-ups here in Montreal.”
