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Who's afraid of Walmart? Not Metro

Metro CEO says his company is defending well against Supercentres in Quebec

Metro says it won't cower in the shadows of U.S. retail giant Walmart, which is making a bigger push into the food business.

Chief executive Eric La Flèche said he expects a ``moderate'' impact from the rising number of Walmart Supercentres, which have been growing at a solid clip in eastern Quebec.

``Overall we're defending pretty well,'' La Flèche told analysts in a conference call on Wednesday, after reporting the company's latest financial results.

Unlike older Walmart stores, Supercentres stock a variety of fresh produce and meats and a broader selection of food items, which put them squarely in competition with the country's largest grocery chains.

Quebec is one of the regions where Walmart has been aggressively building more Spercentres. So far it operates 31 of them across the province, which also happens to be Metro's home turf.

``We have a strong presence in this market and I'm confident we will defend well–but they will have an impact,'' La Flèche said.

Metro grew its profits 13% in the third quarter as it benefited from stronger food sales across its stores.

The chain reported net earnings of $163.5 million in the period ended July 4, an increase from $144.5 million a year earlier.

Profit amounted to 64 cents per share of net income, beating analyst expectations by two cents, according to a survey by Thomson Reuters.

Metro's total revenue for quarter grew 6.1% to $3.84 billion.

Same-store sales increased 4.3%.

In his outlook, La Flèche said fuel prices have started to creep back up again, which means the extra money consumers were spending is starting to trickle away.

``There's still a benefit versus last year, but not at the same level as the second quarter,'' he said.

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