MONTREAL – Sales of Canadian products are outpacing the rest of Metro’s wares, with the gap accelerating in recent weeks, said the chief executive of the grocery retailer.
“In the current context, we are putting even more emphasis on local and Canadian products and optimizing their visibility in all of our banners, whether in store, online or through our various promotional tools, like the weekly flyer,” said Eric La Flèche on a call with analysts discussing the company’s second-quarter earnings.
As customers have been looking to shop more patriotically amid a trade war with the U.S., local products “are selling well and better than the rest of the store,” he said.
“We’ve put a lot of signage through our stores, on the shelves, on displays, to help customers make decisions on what products they want to buy.”
Ottawa has enacted tariffs on certain U.S. imports in retaliation to the duties imposed by U.S. President Donald Trump.
So far, the tariffs and Ottawa’s retaliatory duties haven’t had an inflationary impact, said La Flèche, noting that the retaliatory tariffs are limited in scope. The company is receiving some cost increase requests and is asking for six weeks to consider them, which means some are starting to trickle through — but it’s doing its best to mitigate those increases, working with vendors to find other solutions and in some cases finding alternative suppliers.
“We’re managing as best we can to find sources of supply to protect our costs and … to minimize inflation,” he said.
Some U.S. vendors have production outside the country and are leaning more on that to get around the tariffs, said La Flèche. He gave the example of large berry vendors like Driscoll’s.
“They have fields in Mexico, and some of the berries that we’re selling these days are coming a lot more from Mexico than the U.S,” he said.
Metro reported a second-quarter profit of $220 million, up from $187.1 million a year ago, as its sales rose 5.5 per cent. The profit amounted to 99 cents per diluted share for the 12-week period ended March 15, up from 83 cents per diluted share a year earlier.
In its outlook, Metro said it faces an uncertain environment.
“As we begin our third quarter, we face an uncertain economic environment. It is difficult to predict how the situation will evolve and how it will impact consumers and our business,” said La Flèche.
“We’re confident that we’ll continue to grow, but there’s volatility and uncertainty, and that affects customers, and it ultimately can affect businesses.”
Sales for Metro’s second quarter totalled $4.91 billion, up from $4.66 billion in the same quarter last year, helped by the transfer of two significant pre-Christmas shopping days to the second quarter.
Food same-store sales were up 5.3 per cent in the quarter and up 3.9 per cent after adjusting for the Christmas shift.
Pharmacy same-store sales were up 7 per cent, helped by a 7.8 per cent increase for prescription drugs and a 5.3 per cent increase in front-store sales. Front-store sales were up 3.7 per cent after adjusting for the Christmas shift.
On an adjusted basis, Metro said it earned $1.02 per diluted share in its latest quarter, up from an adjusted profit of 91 cents per diluted share a year earlier.
This report by The Canadian Press was first published April 16, 2025.
Companies in this story: (TSX:MRU)
