Metro Inc. first quarter sales increased 6.5 per cent to $4,97 billion in fiscal 2024 compared to the same period last year. Food same-store sales were up 6.1 per cent (versus 7.5 per cent in the first quarter of 2023) and up 3.4 per cent when adjusted for the Christmas week shift.
Online food sales surged, increasing 105 per cent in the first quarter versus last year (40 per cent in the first quarter of 2023). Metro says this growth was “mostly driven by higher partnership sales.”
Food basket inflation was approximately 4.0 per cent, lower than the reported CPI and down from 5.5 per cent in the previous quarter.
Pharmacy same-store sales increased 3.9 per cent (versus 7.7 per cent in the first quarter of 2023), with a 6.6 per cent increase in prescription drugs and a 1.2 per cent decrease in front-store sales. Metro notes the results are because “we cycled very high sales due to an exceptionally strong cough and cold season.”
“We recorded solid results in the first quarter as our teams continued to deliver good value to customers in all our food and pharmacy banners,” said Metro Inc.’s Eric La Flèche, president and CEO. “Our discount food stores continue to grow their sales at a faster pace, private label penetration reached new heights and our MOI loyalty program now has 2.5 million members, double the size of Metro&Moi. The opening our new 600,000 square feet automated fresh and frozen distribution center in Terrebonne in October was a success and the ramp-up of operations is on track with our plan and the guidance given in November. We are confident that our sustained investments in the modernization of our supply chain and our retail networks will continue to create long term value for our shareholders.”
Price increases for 2024
La Flèche said in a media briefing that as the industry-wide blackout period on supplier price increases comes to an end, there will be price increases on some products, particularly commodity-based items.
“We are actively negotiating as best we can with our suppliers and delaying as much we can with some of the increases requested by our suppliers, but unfortunately there will be some prices starting to go up,” citing orange juice as one example of a commodity-driven product that will see prices go up. “We’ll clearly be selling a lot less orange juice with those higher prices but at some point prices will come down and volumes will go back up.”
Last November, Metro said this fiscal year would include “significant headwinds” with the launch of its new automated distribution in Terrebonne, Que., and the opening of the final phase of its automated fresh produce plant in Toronto. It again noted this in its current earnings report, stating the company will incur “some temporary duplication of costs and learning curve efficiencies…while these investments position us well for continued long-term profitable growth, we will not fully absorb these additional expenses in the current fiscal year and are forecasting operating income before depreciation and amortization to growth by less than two per cent…we expect to resume our profit growth post fiscal 2024.”
Code of Conduct
Responding to a question about the federal government voicing its disappointment with grocers on pricing and that it’s in talks with foreign grocers to enter the Canadian market, La Flèche said that Metro has collaborated “fully and transparently with the Competition Bureau and I think we have cooperated and have been transparent with our answers. We already operate in a very competitive industry, and I have said this many times, and remind everyone that we have three international competitors in this market already – Walmart, Costco and Amazon.”