MONTREAL — Metro Inc. here said Wednesday that it would close or convert 15 stores in Ontario in the coming months after reporting soft sales for its fiscal third quarter.
Metro also on Wednesday said that an affiliate would operate pharmacies in Target stores throughout Quebec.
The restructuring in Ontario will result in a $40 million (Canadian) charge and will affect 15 stores in Ontario that will either close or convert to the discount Food Basics banner, Metro said. An unspecified number of employees will be affected.
“We are confident that these investments in our network, combined with our merchandising programs, will allow us to continue to grow despite increased competition,” Eric R. La Flèche, president and chief executive officer of Metro, said in a statement.
In financial results for the quarter ended July 6, Metro said sales of $3.46 billion (U.S.) decreased by 0.7% from the same period last year, while comparable-store sales decreased by 0.9%. Metro said “very low inflation” and increased competition affected sales.
Top 75: Metro Inc. Ranks 18th Among U.S., Canadian Food Retailers
Net earnings were up 3.7% to $145 million (U.S.).
The partnership with Target allows Metro’s McMahon Distributeur Pharmaceutique division to operate pharmacies under its Brunet banner in the majority of Target’s stores in Quebec. The Minneapolis-based retailer is opening its first 25 stores in Quebec this fall.
“The agreement with Target provides an excellent growth opportunity for Metro’s pharmaceutical division, particularly for the Brunet banner, as it enables us to significantly increase our presence, our purchasing power and our sales potential in Quebec. In all, 18 new pharmacies, including 12 in the Greater Montreal area, will be set up by the summer of 2014, bringing the total of Brunet to 168,” La Flèche said.
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