The workers at Metro Inc. are working overtime to keep stores open as the company grapples with an ongoing labor crisis, the Montreal-based grocer said Wednesday
The workers at Metro Inc. are working overtime to keep stores open as the company battles an ongoing labor crisis, the Montreal-based grocer and drugstore said Wednesday.
“There are a lot of open positions and not enough workers to fill them,” Metro President and CEO Eric La Fleche said on a call to discuss the company’s third-quarter results.
Canada’s labor market remains extremely tight, with more than one million job vacancies across the country amid historically low unemployment rates, according to Statistics Canada.
“The labor shortage is causing pressure … because it increases overtime to supply our stores,” La Flèche said. “We have higher overtime rates than we’re used to.”
He added that Metro currently has “more open positions” than usual, but declined to provide the exact number of vacancies at the company’s warehouses and stores, which include brick-and-mortar supermarkets such as Metro and Metro Plus, discount grocery chains Super C in Quebec and Food Basics in Ontario, as well as Jean Coutu and Brunet drugstores.
La Flèche’s comments came after the retailer reported a third-quarter profit of $275 million, up from $252.4 million a year earlier, as sales rose 2.5 percent.
Earnings were $1.14 per diluted share for the period ended July 2, up from $1.03 cents per share a year earlier.
Sales were $5.87 billion, up from $5.72 billion, as same-store grocery sales rose 1.1 percent and pharmacy sales rose 7.2 percent.
On an adjusted basis, Metro said it earned $1.18 cents per diluted share for the quarter, up from $1.06 per share a year earlier.
The grocer warned that continued inflationary pressures and labor shortages could begin to weigh on margins.
“If this high-inflation, high-price environment continues, it will continue to put pressure on margins,” Metro Chief Financial Officer Francois Thibault said.
For now, strong margins in the company’s pharma division offset the decline in food gross margin, he said.
“We had very strong storefront sales in our pharmacy business at Jean Coutu and Brunet during the quarter,” La Flèche said. “Over-the-counter cough and cold products are flying.”
Canada’s unemployment rate held at 4.9 per cent in July, the lowest level since comparable records began in 1976, Statistics Canada said last Friday in its latest labor force survey.
Meanwhile, inflation continued to shape consumer habits in the company’s third quarter.
Shoppers are increasingly choosing discount grocery stores, switching to cheaper home brands and looking for cheaper protein choices.
“We saw the shift from conventional to discount (stores) accelerate compared to the previous quarter,” La Flèche said.
“We’ve also seen a shift to private label (and) down-marketing in proteins … there’s certainly a shift in value.”
The price of food purchased in stores rose 9.4% in June, Statistics Canada said last month.
Metro also said it expects same-store food sales to grow at a faster rate than in recent quarters and pharmacy prescription growth to slow.
This report by The Canadian Press was first published on August 10, 2022.
Companies in this story: (TSX:MRU)
Brett Bundale, The Canadian Press
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