Metro boss Eric La Flèche has “a bit” the impression that he is playing the role of scapegoat in the hot inflation issue, which he finds unfair.
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“We are the last link in a long chain. There are price increases throughout the chain and we are the last in front of the customer, so it is a bit normal that we switch to cash,” Mr. La Flèche said in an interview with the Journal this week.
Months of intense criticism are finally taking their toll, admits the 61-year-old leader.
“It’s not easy. We do our best, we work hard, we try to serve our customers well. As retailers, we don’t benefit from inflation. […] We do what we have to do as a responsible company, but that includes good management and generating a certain level of profit that we consider appropriate.”
He gave nothing to Champagne
Eric La Flèche therefore promised Federal Innovation Minister François-Philippe Champagne nothing new when he summoned the “barons” of supermarket chains to Ottawa in September.
“We didn’t need any additional effort from the minister,” says Mr La Flèche. We try hard every day. […] We are committed to continuing to do everything we can to deliver value to our customers.”
Eric La Flèche in Ottawa, in September. Photo Anne-Caroline Desplanques
For months, especially at the start of the pandemic, it was virtually impossible for food retailers to refuse price increases from suppliers, argues Eric La Flèche, who themselves were facing a cost explosion.
“There is still pressure [inflationniste] in the system, says Mr. La Flèche. It is less and we try to convince our suppliers as best we can that our customers are up to this point [pour ce qui est de] the ability to absorb [de nouvelles hausses des] End consumer price. We are at the end. The price increases that suppliers ask us must be reasonable because we cannot pass them on.”
Higher margins at Jean Coutu
If Metro’s profit margins have increased in recent months, it is mainly due to “higher margin cosmetic products” sold at Jean Coutu, owned by the Montreal company since 2018, argues the CEO.
“Our grocery gross margin percentages are flat or declining,” he repeats to anyone who will listen.
Metro CEO Eric La Flèche at the company’s new automated distribution center in Terrebonne. Photo agency QMI, JOEL LEMAY
In response to the price rise, consumers flocked to low-cost brands. Metro followed the wave and opened three new Super C branches last year, while Metro only opened one. However, imitating Loblaws, which has converted a large number of Provigo facilities into Maxi, is out of the question.
“Over time, could some metros be converted to Super C? We’ll see, but there is no mass movement. Metro is a healthy brand,” says Eric La Flèche.
In Quebec, the company currently has 197 Metro supermarkets, 103 Super C stores and 386 Jean Coutu pharmacies.
Metro CEO about…
Automated checkouts
“I have compassion, it’s not easy. It is a learning experience for customers and employees. It’s quite a challenge, but we’re getting better at it. The customer gets used to it over time and gets better. […] If we want to provide a service… There is a shortage of workers, it is very difficult to recruit staff due to the shortage of workers. It helped us a lot to keep the customer happy – with some frustrations. But the customer likes that better than a long wait.”
Executive compensation
“We could do without it, I tell you [de la controverse sur les bonis versés aux cadres de Metro]. But we are not at all embarrassed by our compensation at Metro. We are a big company, we have $20 billion in sales and $1 billion in profits. We are the largest private employer in Quebec [avec plus de 65 000 salariés]. You have to have a talented team. We pay people competitive salaries.”
New acquisitions
“The switch is on. […] When they come up, we try to figure out if it’s right for us. We have a good balance sheet [financier]a good team and if acquisitions arise, we hope to be able to make them.
The headquarters in Quebec
“We are a listed company without a majority shareholder and are therefore always subject to an offer [d’achat] unprompted. It could happen, but as we have been saying for years, good results are the best defense. The price of our actions […] is not a discount for anyone […] We are not for sale at all. We want to continue to grow.”
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Originally posted 2023-11-18 08:44:31.