Opportunities to pop the champagne have certainly become rarer lately for SAQ managers who are having to deal with declines in sales for a third consecutive quarter.
The month of December, a period when many consumers take the opportunity to put more bottles in their basket for the holidays, will not have allowed the state-owned company to return to increased sales. These are instead down 0.9% compared to the same period last year. The results for the third quarter of the 2023-2024 fiscal year ended December 30, 2023 show sales amounting to $1.414 billion compared to $1.427 billion for the corresponding quarter of the previous fiscal year. Net profit of 522.7 million is down 18.7 million (3.5%) compared to the same period last year.
Obviously, the state corporation does not expect the situation to improve in the coming months. “This slight decline observed over the last three quarters could continue given the economic context,” we can read in the press release issued by the SAQ on Thursday.
The SAQ partly explains this decline by a 9.7% decrease in sales recorded with wholesale grocers, going from 137.8 million last year to 124.4 million this year. Convenience stores and supermarkets have therefore stocked up in smaller quantities, which does not mean, however, that sales to consumers have decreased.
The announcement of the results comes as the SAQ will take a greater gross margin by May on all its bottles priced above $15.
The average 1.7% increase in markup – which will affect approximately 75% of products sold on shelves – will come into effect at the same time as the increase in prices set following negotiations with suppliers. This is when consumers will know the real increases they will face at checkout.
When tabling the budget earlier in March, the Legault government also asked state-owned companies, including the SAQ, to make “optimization” efforts in order to hope to return to budget balance.