Metro Inc.’s profits in the second quarter of 2022 jumped 5.3% to $198.1 million. Total sales increased 1.9% to $4,274.2 million as same store food sales increased 0.8% and 11.5% for the first eight weeks of the second quarter compared to compared to the pre-COVID 2020 period. Same-store drugstore sales increased 4.9% and 11.0% for the same periods in the second quarter compared to 2020 pre-COVID.
Eric La Flèche, President and Chief Executive Officer, says he is satisfied with the result given the difficult environment in which grocers operate.
“Our industry continues to experience higher than normal inflationary pressures and our teams remain focused on delivering quality products at competitive prices to our customers. We reached another milestone this quarter with the successful start-up of our fully automated frozen food distribution center in Toronto. Finally, I am proud to say that for the second time in three years, the Jean Coutu banner was named by consumers as the most admired company in Quebec in the latest Léger Réputation survey. This reflects the strength of the brand, consumer confidence and the quality of the services provided by the owner pharmacists.
Online food sales increased by 6.0% compared to last year (up 240.0% in 2021). The company’s food basket inflation was just under 5.0% (3.5% in the prior quarter). In addition to same-store drugstore sales up 9.4%, Metro reported a 13.3% increase in in-store sales, supported by a stronger cough and cold season, as well as lower sales last year due to the six-week ban. the sale of non-essential products.
Metro says it continues to face challenges and notes that inflationary pressures and higher than normal labor shortages “could put pressure on margins. In the near term, we expect food sales to remain relatively flat compared to last year, while we expect continued growth in our pharmaceuticals business, albeit somewhat subdued compared to the first half of the year. The labor dispute with our full-time employees in the Toronto distribution center, which began on April 2, 2022, was resolved seven days later with the ratification of a new four-and-a-half-year collective agreement. Our third quarter results will be impacted by the direct costs of the strike and the impact of the new collective bargaining agreement, estimated at approximately $10 million before tax.