Ecommerce accelerates at Metro as Canada sees new lockdown restrictions

Date : 22 April 2021

Stewart Samuel

Program Director - Canada

We review Metro’s Q2 performance, including strong ecommerce sales, and the outlook as it starts to cycle the surge in demand at the start of the COVID-19 pandemic last year.

Second quarter key numbers

  • Total sales increased 5.1% to $4.2bn
  • Food same-store sales up 5.5%, and up 10.1% for the first 10 weeks of the quarter
  • Pharmacy same-store sales down 0.8%
  • Ecommerce sales increased 240% in the quarter.
  • Net earnings increased 6.8% to $188.1m
  • COVID-19 related expenses of $29m
”As we are currently cycling the peak sales of the start of the pandemic last year, we are confident that our sales volume will remain elevated compared to pre-pandemic levels and we are well positioned to continue to deliver value to our customers and shareholders.”

Eric La Flèche, president and CEO

Source: IGD Research

Pandemic trading trends

This was another solid quarter from Metro as it starts to annualise against the surge in buying at the start of the pandemic last year. Store traffic remains down significantly versus last year but continues to be more than offset by larger basket sizes as shoppers consolidate their trips. Promotional participation trended up in the quarter but remains below pre-pandemic levels.

Continuing to add ecommerce capacity

Online grocery sales accelerated further in the quarter, up 240%, driven partly by new lockdown restrictions as the country experiences a rise in COVID-19 cases. The company is on-track to have its dark store operational by the summer and 170 stores offering its click and collect service by the end of September. It has recently expanded its partnership with quick commerce company, Cornershop, with its Adonis chain offering home delivery. The company is also planning to ramp-up its pharmacy ecommerce operation.

Pharmacy challenged by lockdown restrictions

While Metro saw a 4.2% increase in prescription drugs, front-store sales in pharmacy fell 10.5%. This decrease was mainly due to restrictions on the sale of non-essential products in Quebec for six weeks during the quarter, the milder cold and flu season, and the business starting to cycle against the pandemic surge of 2020.

Pushing ahead with technology and supply chain investments

Metro plans on extending self-checkouts to a further 90 stores this year, building on the initial roll-out to 250 stores. It also has around 120 stores equipped with electronic shelf labels, which will also grow by an additional 90 stores this year. The business also continues to make progress on its supply chain modernisation programme. It remains on track to complete the transfer of its Brunet pharmacies to the Jean Coutu distribution centre (DC), along with health and beauty products for its Metro and Super C stores, by the end of June. In February, it started the operations in phase one of its new semi-automated produce DC in Toronto and its new fully automated frozen DC is on track to open in January 2022.

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