Consumers should expect to experience further price increases at the grocery store in the coming weeks, warns Metro boss Eric La Flèche. Despite rising profits, he says food inflation “isn’t good news” for the company.
Traditionally, major Canadian grocers do not increase their prices between November 15 and November 1er february. “Over the next few weeks” and “months,” consumers will see further price increases for certain items sold at Metro, says La Flèche. “We received a few thousand requests for a raise [de la part des fournisseurs], he points out. We are doing a lot of work to lessen the impact on consumers. »
To illustrate the extent of inflationary pressures in the food industry, Mr. La Flèche mentioned that Metro had registered nearly 27,000 requests for price increases of more than 10% on average from its suppliers for food only. (excluding meat and fresh fruits and vegetables) in fiscal year 2022.
During the first quarter (ended December 17), food basket inflation was 10% at Metro. This trend affects the entire industry, while food inflation was 11% in December, according to Statistics Canada.
The major Canadian grocers (Metro, Loblaw and Sobey’s) are receiving greater attention from elected officials, the media and consumers, in a context of soaring prices. The three companies are also the subject of a study by the Competition Bureau announced at the end of October. Metro denies taking advantage of industry concentration to increase its profitability.
High food inflation “is not good news” for the company, assures its president and CEO. “It really puts pressure on the system and it’s more difficult to manage. He adds that grocers are “the last link” in the supply chain. Increases in groceries are more visible to the general public, but the pressure is exerted throughout the chain.
Mr. La Flèche says Metro has also absorbed some of the inflationary pressure. The decrease in the gross margin, which fell from 19.9% to 19.6%, would be a demonstration of this, according to him. In 2019, before the pandemic, the gross margin was 19.4% in the first quarter.
The price increase nevertheless allowed the owner of the Metro, Super C and Jean Coutu brands to reveal a net profit of $231.1 million, which represents an increase of 11.3% compared to the same period. last year, sales increased by 8.2% to 4.671 billion. Same-store sales in the food sector, which excludes store openings and closings, rose 7.5%. In the pharmaceuticals sector, comparable sales increased by 7.7%.
Metro’s board of directors adopted a 10% increase in the company’s quarterly dividend.