Metro will begin testing a “scan and pay” service while accelerating the roll-out of self-service checkouts in its supermarkets, while the grocer needs to adjust to minimum wage increases in Quebec and Ontario.
A pilot project will soon be in effect in Quebec, at a place that has not been specified, to test this system allowing customers to scan items before depositing them in their shopping cart and paying on their way out.
This service is currently available at select Walmart stores in Canada and Amazon’s web giant is relying on its own system.
“It’s something that exists but was not yet ready,” Metro President and CEO Eric La Flèche said Tuesday in Montreal during a press briefing atthe annual meeting of shareholders. “There were some problems with the machines and it did not always work for the customer. ”
As for self-service checkouts, their number is expected to grow more rapidly in Ontario, where the minimum wage of $ 14 per hour will reach $15 starting next January.
Unlike Quebec, where many supermarkets are operated by franchisees or affiliated merchants, Metro grocery stores in Ontario are corporate stores. The variation in the minimum wage has a greater impact on the company’s labor costs in Ontario.
Technologies (self-service checkouts) are more affordable and easier to use for our customers.
Eric La Flèche, President and CEO of Metro
On an annualized basis, the bill resulting from the increase in the minimum wage in Ontario is $45 to $50 million. In Quebec, the increase from $ 11.25 to $ 12 an hour, which will come into effect on May 1, is better absorbed.
Self-serve checkouts are found in 24 Ontario supermarkets in Metro. They are expected to appear in seven other stores by the summer and at six Food Basics in the coming months. In Quebec, this service is offered in four Metro grocery stores and five Super C stores.
The grocer is also continuing to automate its Ontario distribution network by injecting $ 400 million over six years.
Nothing to blame
In his message to the shareholders, Metro’s boss said that the grocer had nothing to be ashamed of in the Competition Bureau’s investigation, which prompted Loblaw to admit that it had participated in a ploy to fixing the price of bread for 14 years.
Mr. La Flèche criticized his competitor, without naming it, suggesting that confessions in the food chain suggested that all retailers were at fault.
“We refute and condemn the allegations of collusion throughout the sector,” La Flèche said in his speech, recalling that Metro’s internal investigation did not find any irregularities.
He also questioned Loblaw’s decision to offer $25 cards as compensation, but did not go so far as to describe it as a publicity stunt.
Mr. La Flèche also refrained from speculating on his strategy once the acquisition of the $ 4.5 billion Jean Coutu Group, which should receive the approval of the Competition Bureau in the spring, has been completed.
In terms of its first quarter performance, Metro exceeded expectations with net income of approximately $ 1.3 billion, or $ 5.67 per share. This result was boosted by the sale of its investment in Alimentation Couche-Tard to finance the acquisition of Jean Coutu.
At the same time last year, the grocer had net profits of $ 138.1 million, or 58 cents per share.
Revenues were 3.11 billion, up 4.7%. Excluding non-recurring items, Metro’s adjusted earnings were $153.5 million, or 67 cents per share, up 11% year-over-year.
Analysts polled by Thomson Reuters expected an adjusted profit per share of 59 cents and revenue of 3.02 billion.
Sales at facilities that have been open for at least a year, a key indicator in the retail trade sector, rose 3.4%, up from 0.7% in the first quarter last year.