Metro Inc. said it will rebrand ten of its Metro supermarkets in Ontario as Food Basics discount stores. The move, outlined in the company's latest earnings release, also includes the permanent shutdown of a Montreal satellite warehouse, an e‑commerce fulfilment centre and the closure of one Metro outlet.
Restructuring costs and profit dip
The conversion will trigger restructuring expenses tied to employee termination benefits, site‑closure costs and lease liabilities. Metro reported net profit of $211.3 million for the quarter ending 4 July, a drop of almost 35 percent from the $323 million recorded a year earlier. The decline was partly blamed on a labour dispute at a distribution centre in Laval, Quebec, which the company said continues to suppress same‑store sales.
Eric La Flèche, president and chief executive officer, told analysts that the strike's impact will linger as long as the work stoppage persists. He added that the company will notify affected stores and staff gradually, noting that locations in the Greater Toronto Area, Ottawa and other parts of Ontario are slated for conversion before the end of the fiscal year.
Consumer pressure fuels discount shift
Metro's strategy mirrors a broader trend among Canadian grocers. A recent Equifax survey found that nearly a quarter of respondents are dipping into savings for everyday expenses, while one‑fifth rely more on credit lines than a year ago. Discount‑focused retailers such as Dollarama have reported strong sales growth, and Walmart has observed an uptick in private‑label purchases and promotional activity at its grocery aisles.
Chief operating officer Marc Giroux said the value‑driven shift is expected to continue, prompting further investment in the right store formats for each market. He stressed that the company is assessing each community on factors such as local market conditions and store performance to decide whether a Food Basics model better serves shoppers.
Metro has not disclosed the exact number of employees affected by the conversions, but it affirmed that workers will have options under their collective agreements and that union representatives are being consulted throughout the process.
Based on reporting by Global News.