Price increases tied to tariffs account for about 20 per cent of the additional cost demands Metro is seeing from vendors. (Richard Lautens/Toronto Star via Getty Images) · Richard Lautens via Getty Images
Metro (MRU.TO) president and CEO Eric La Flèche says tariffs and counter-tariffs are contributing to food inflation as the grocer continues to receive price increase requests from suppliers.
Tariffs account for about 20 per cent of the demands for increased prices Metro is getting from vendors. So far, the grocer has approved price hikes on roughly 3,000 SKUs — individual products or product variations identified by a unique stock keeping unit code.
Still, La Flèche says that its food basket inflation is in line with Statistics Canada’s Consumer Price Index of 3.1 per cent. “We’d like it to be two per cent, but we’re at three per cent these days,” he said.
“We negotiate as best we can to minimize the impact on our customers in this environment where everybody’s searching for value and everybody’s more price sensitive,” La Flèche said. For now, he says, the effects remain manageable.
Price increases related to the counter-tariffs established in March are also beginning to trickle into health and beauty costs.
In response to tariff-related price increases, La Flèche says the company has been searching for other suppliers in other countries to minimize price increases and maintain quality for customers.
Metro posted a third-quarter profit of $323 million, up from $296.2 million in the same period a year earlier. Earnings came in at $1.48 per diluted share for the 16 weeks ended July 5, compared with $1.31 per share last year.
Quarterly sales reached $6.87 billion, up from $6.65 billion a year ago. Food same-store sales rose 1.9 per cent, while same-store sales in the pharmacy division climbed 5.5 per cent.
As at 11:18 a.m. ET Wednesday, Metro shares were trading at $98.80, down 6.82 per cent.