Metro Inc. says the affected distribution centre, which opened in 2022, is one of its new fully-automated facilities.Christinne Muschi/The Canadian Press
Grocery retailer Metro Inc. MRU-T says a mechanical issue in the refrigeration system that shut down its Toronto frozen food distribution centre will result in a $22-million impact on its earnings this quarter.
The distribution centre has been shut down for nearly a month. The closing required Metro to implement contingency plans to keep food stocked at its Metro and Food Basics stores in Ontario.
“The mechanical issue affected several components of the refrigeration system, but the repairs, which are complex, are progressing normally and should be completed in the coming weeks, after which operations will gradually resume,” a company press release stated on Friday.
The distribution centre affected by the incident opened in 2022 – one of the new fully-automated facilities that Metro transitioned to as part of an overall $1-billion investment in modernizing its supply chain in recent years.
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These new facilities were designed to improve service to stores and reduce handling time, leading to more efficient supply chains and better in-stock positions in stores because orders would be more precise.
Metro is scheduled to report its fourth-quarter earnings on Nov. 19. The net $22-million impact, after taxes, includes the cost of lost food products and other direct costs, such as repairs, but does not include amounts that Metro may recoup from insurers at a later date.
The company signalled that some one-time costs related to the incident would also be incurred in the following quarter.