Metro Inc. is bracing investors for more subdued sales growth after panic-buying in the early days of the pandemic allowed the supermarket operator to deliver a stretch of blowout gains.
In an interview Thursday, Metro President and Chief Executive Officer Eric La Flèche said his company is running into the reality of tough COVID-era in-store sales comparisons. Indeed, same-store food sales were up 5.5 per cent in the last quarter, compared to double-digit gains in the three prior quarters.
“We told the market that we expected [the third quarter] or next quarter sales to be down a bit over the previous year,” La Flèche explained, adding that last year’s performance was driven by a flurry of shopping as consumers stocked up. “But over two years ago, they’re going to be up very nicely. So, I think the way to look at it is on a three-year basis…”
While traditional sales slow, activity is booming online as the pandemic fast-tracks an evolution in shopping habits.
“Nobody expected that much demand online overnight,” La Flèche said about the digital stampede that swamped his company a year ago. “It was a tsunami of sorts and we had to adjust really quickly.”
Now, the digital push is paying off for Metro, which on Wednesday reported a 240 per cent year-over-year surge in second-quarter online food sales.
The adjustments involved boosting store capacity to meet demand with a “click and collect” model that allows shoppers to choose products online before dropping by for pick-up. Delivery was another option that became a fast favourite among customers, according to La Flèche.
Before the pandemic, the company’s investments in e-commerce steadily grew amid gradually rising demand. Last year, that investment kicked into full gear.
“We were forced to accelerate and I think we’ve been able to do that in a very flexible, agile way…” he said, adding that the next step is to build a “dark store” in Montreal and eventually in Toronto to warehouse products for the pick-up model.
La Flèche noted that product volumes are high and more customers are still eating at home, a trend that is expected to persist in large part even after restaurants re-open.
“We’re confident we’re going to be doing pretty well,” he said.
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