Financial results from Canada鈥檚 three largest grocers offered a clearer picture of how the COVID-19 crisis has shaped shopping habits 鈥� and how consumers respond when public health restrictions are eased.
Metro Inc.鈥檚 third-quarter earnings, reported Wednesday, largely mirrored results posted earlier this summer by competitors Empire Co. Ltd. and Loblaw Companies Ltd.
At the onset of the pandemic, all three saw sales soar as shoppers stockpiled everything prompting shortages of things like flour and toilet paper. Many Canadians also opted for conventional full-service grocery stores rather than discount supermarkets and bought more items per visit as part of a one-stop-shop effort to reduce their grocery trips.
But the opposite trend is now emerging as the vaccine rollout continues and COVID-19 infections drop.
Metro, Loblaw and Empire all noted an increase in traffic in their stores in recent quarters, but smaller basket sizes and more muted sales, an indication that people are shopping around more and potentially spending more at restaurants.
They also noted a gradual return to discount grocery stores as an increasing number of shoppers sought out promotions over simply convenience.
鈥淐onsumers are shopping around a little more with the easing of restrictions,鈥� Metro president and CEO Eric La Fl猫che said during a conference call.
鈥淲e鈥檙e seeing a gradual shift to more normal pre-pandemic behaviour,鈥� he said. 鈥淭he discount channel in general is benefiting from that versus conventional (stores), which had a big uplift during the pandemic.
The Montreal-based grocery and drugstore retailer, which operates under numerous banners including Metro, Super C and Food Basics, said Wednesday its food same-store sales were down 3.6 per cent in its third quarter compared with last year.
Empire, which owns Sobeys, Safeway and FreshCo, reported similar results in June, noting its same-store sales slid 4.5 per cent while Loblaw, behind store chains like Zehrs, Provigo and No Frills, said its food same-store sales declined 0.1 per cent.
La Fl猫che with Metro said he expects food sales will remain soft this fall.
鈥淲hile we can鈥檛 predict exactly how the pandemic will evolve, we expect our food sales to decline in (the fourth quarter) versus last year鈥檚 high levels, but to compare favourably to fiscal 2019,鈥� he said.
But Metro hopes to make up some ground through its drugstore division, which includes Jean Coutu and Brunet.
鈥淲e expect continued growth from prescriptions,鈥� La Fl猫che said. 鈥淭he easing of restrictions will have a positive impact on certain categories that were negatively affected by the pandemic such as beauty, cosmetics, and cold and flu products.鈥�
Meanwhile, the grocer is also expecting to see some inflationary pressure from the higher cost of goods, transportation and labour.
鈥淚 would expect some inflation to be reflected at retail in a more pronounced way this fall,鈥� La Fl猫che said. 鈥淏ut we will have to wait and see. We fully intend to remain competitive.鈥�
Metro said it earned $252.4 million in its latest quarter, down from $263.5 million the year before.
The company said its profit amounted to $1.03 per diluted share for the 16-week period ended July 3, down from $1.04 per diluted share a year ago.
Sales in what was the company鈥檚 third quarter were $5.72 billion, down from $5.84 billion last year.
COVID-19 related expenses for the quarter totalled $38 million compared with $107 million in the same quarter last year.
鈥擝rett Bundale, The Canadian Press
