Canada’s grocery industry is facing an increase inflationary The head of one of the country’s largest grocery chains said more increases in food costs are expected to hit supermarkets in the coming months.
Metro CEO Eric La Fleche said food manufacturers are experiencing inflationary pressure and have begun to pass those cost increases to grocery stores.
“There will be an increase in costs due to cargo issues, weather and labor costs on the supplier side,” he told analysts during a conference call.
“We’re working hard to limit those costs and make sure we’re competitive in the market.”
The Montreal-based grocer and pharmacy retailer on Wednesday reported increased profits for its fourth quarter, even as grocery sales tumbled due to public health measures being taken. easing and consumers return to restaurants during the summer.
Still, La Fleche said rising inflation is spurring value-seeking shoppers, with some restaurants likely to skip over to cook at home more.
“Restaurants have opened up this summer, we certainly feel that, but our perception is that consumers are now consuming more at home than in the summer,” he said.
However, customers may start to notice higher prices at grocery stores, as well as potentially missing some products.
Metro said food basket inflation was around 2% in the fourth quarter – double the 1% recorded in the previous quarter.
La Fleche says meat and dairy products are the main drivers of higher costs at Metro grocery stores.
Statistics Canada said on Wednesday, October’s annual inflation rate accelerated to 4.7% as the consumer price index posted its biggest year-over-year increase since February 2003. following a 4.4% year-on-year increase in September.
Supply chain issues are also causing some shortages on grocery store shelves.
“There are[stockholders]that continue to be difficult to supply and get the quantities we want,” says La Fleche. “There are a few key commodities that we’re allocating, the whole industry is like that.”
How rising inflation can be an item in your wallet during the holidays
Metro reported fourth-quarter profit of $194 million or 79 cents per diluted share, up from a profit of $186.5 million or 74 cents per share in the same quarter a year earlier.
Total revenue for the quarter came in at $4.09 billion, down from $4.14 billion in the same quarter a year ago when the company said it posted particularly strong revenue due to the pandemic.
La Fleche said the company recorded fourth-quarter net income growth “despite a drop in sales as we had an exceptional sales cycle last year.”
“As government restrictions ease over the summer, a portion of food consumption is shifted back to restaurants,” he said in a note to shareholders. “However, our food sales continue to compare favorably to pre-pandemic levels.”
The company, which operates under several banners including Metro, Metro Plus, Super C and Food Basics grocery stores, as well as pharmacies under the Jean Coutu, Brunet, Metro Pharmacy and Drug Basics banners, said Same-store food sales fell 2.9%. from a year ago, while sales at drugstores increased 4.1%.
On an adjusted basis, Metro said it earned 81 cents per diluted share, up from adjusted earnings of 77 cents per diluted share a year ago.
Analysts had expected adjusted profit of 80 cents per share and $4.14 billion in revenue, according to estimates by financial market data firm Refinitiv.
“Our industry is experiencing cost inflation pressures, mainly related to COGS,” the company said in a discussion and analysis with management.
“While it is difficult to predict how our customer habits, labor market and food basket inflation will develop in the short term, the fundamentals of our business remains solid and our sales continue to compare favorably with pre-pandemic levels.”
On Wednesday, Metro reported fourth-quarter profit of $194 million or 79 cents per diluted share, up from a profit of $186.5 million or 74 cents per share in the same quarter a year. before.
© 2021 Canadian Press
https://globalnews.ca/news/8379984/metro-sales-q4-food-inflation/ | Metro warns of higher food costs as grocery industry grapples with rising inflation