Despite inflationary pressures and the scarcity of labour, profits continue to climb at Metro. The food giant posted a net profit of $198.1 million (+5.3%) in its second quarter of 2022.
• Read also: No Francophones on CN’s Board
• Read also: Inflation beats forecasts: a black day for the portfolio
Thursday, the Quebec brand unveiled the financial results for its fiscal year ended March 12. The group’s turnover reached $ 4.27 billion (+ 1.9%) for its supermarkets and pharmacies.
“The industry continues to experience higher-than-normal inflationary pressures on commodity, transportation and labor costs,” said President and CEO Eric La Flèche.
The latter does not hide that if these pressures continue, it might have an impact on the company’s margins in the coming quarters. However, the president does not expect a miracle in the short term.
Despite supply challenges and rising costs, management says it is working hard to offer “quality products at competitive prices”.
Most popular
Metro has also seen in recent months that low-cost retailers like Super C are growing faster than traditional supermarkets and that private labels like Selection and Irrésistibles, which are often more affordable, are gaining new followers.
Due to price adjustments, particularly for meat, Metro has noticed that consumers have changed their purchasing habits.
In the second quarter, sales for comparable food stores and pharmacies jumped 0.8% and 9.4% respectively, compared to a year earlier.
The health division benefited from an uptick in the purchase of commercial products due to a “heavier cough and cold season”. Last year, it was also forbidden to sell non-essential products during this period.
In addition, many consumers continued to do their grocery shopping online. By 2021, sales for this service had jumped 240%. In the second quarter, the increase was 6%, advance management.
Impact of the strike
Metro has had to juggle in recent months with a seven-day labor dispute at its distribution centers in Toronto.
Management figures the bill for this strike and the impact of the new collective agreement at $10 million. These figures will be reflected in the results for the third financial quarter.
Due to the pandemic, Metro had decided to offer a new bonus to its 45,000 employees in Quebec and Ontario. This measure will have cost $8 million in gift cards for the workers.
During the second quarter, the company also inaugurated its automated distribution center for frozen products in Toronto and continued to roll out self-service checkouts in its supermarkets. Management plans to equip 54 other establishments in the coming weeks.
This system will also be deployed in pharmacies.
Since the start of its 2022 fiscal year, Metro has made profits of $405.8 million, up 7%. For turnover, it reached $8.59 million, an increase of 1.4%.
