Metro Plans Ontario Promotions

Metro said last week it expects to launch an integrated promotional campaign late this fall after it completes the conversion of its Ontario stores to the Metro banner. The company is also hoping to become a sponsor of the Toronto Maple Leafs hockey team as a way of promoting the name on the stores, Eric R. La Fleche, president and chief executive officer, said. Metro had completed 128

MONTREAL — Metro here said last week it expects to launch an integrated promotional campaign late this fall after it completes the conversion of its Ontario stores to the Metro banner.

The company is also hoping to become a sponsor of the Toronto Maple Leafs hockey team as a way of promoting the name on the stores, Eric R. La Fleche, president and chief executive officer, said.

Metro had completed 128 of 159 planned conversions as of July 24, with expectations of completing the re-bannering program in November, La Fleche said.

Converted stores formerly operated primarily under the Dominion and Loeb banners, “and results continue to be encouraging,” he pointed out.

“When we finish, we will be in a better position to have an integrated campaign that will incorporate various marketing and merchandising initiatives,” La Fleche told analysts during a conference call to discuss financial results for the third quarter, which ended July 4.

Net income for the quarter rose 22.5% to $104.6 million (U.S.), with sales climbing 4.2% to $12.6 billion. Same-store sales increased 4.2%. For the year-to-date, net income was up 22.9% to $250.9 million, sales rose 5% to $8 billion, and same-store sales increased 4.2%.

According to La Fleche, the financial results “prove that our strategies are effective in the current economic environment.”

He attributed the earnings growth to “strong sales, higher margins, lower shrink at store level, especially in Ontario, and good cost controls.”

Asked whether competition has increased in Ontario in the last month, La Fleche replied, “Ontario remains a competitive market that is aggressive, but rational.”

Retail food inflation fell a bit during the quarter to 3%, he added, and that's where he said he expects it to stay through the fourth quarter and the beginning of the next fiscal year.

“Though we're seeing growth at our conventional stores, the recession is having an impact and causing a shift toward discount banners,” La Fleche added.

Separately, workers at a Metro grocery warehouse in Quebec City returned to work last week after approving a new contract with the retailer. The 164 employees went on strike July 2. The eight-year deal provides employees with a 20% wage increase over eight years, according to published reports.