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Metro sees profit rise 13% in competitive grocery sectorThursday, August 13, 2015 > 13:16:05
Company said it is concentrating on fresh food and the customer experience
Metro Inc. says its profit rose 13.1 per cent in the third quarter to $163.5 million along with an improvement in sales per store.
Earnings per share were 64 cents, up from 54 cents.
Total revenue for quarter ended July was $3.84 billion, up 6.1 per cent from $3.62 billion in the same period the previous year.
The grocery chain, with 600 outlets in Ontario and Quebec, said same-store sales rose 4.3 per cent, while the cost of a basket of groceries was up by about 3.5 per cent in the past year.
The falling Canadian dollar and higher prices for meat have pushed up food prices faster than overall inflation in the past year.
However, Metro CEO Eric R. La Flèche said he believed Metro's strategy of improving customer experience and upgrading its retail stores is paying off.
"We are pleased by our third quarter performance, which was driven by continued strong sales growth, especially in fresh food products," he said in a news release.
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, adding that he's not frightened by the development.
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 supercentres. 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.