Profits at grocery chain Metro increased by more than 10 per cent in the second quarter, as higher sales in the company food division and pharmacy unit boosted the bottom line.
Company says margins on food have declined this year
Profits at grocery chain Metro increased by more than 10 per cent in the second quarter, as higher sales in the company’s food division and pharmacy unit boosted the bottom line.
The Montreal-based chain posted a net income of $218.8 million in its recently completed quarter, on total sales of just over $4.5 billion. Those figures were up from $4.27 billion and $198 million, respectively, last year.
Sales at the food division — which includes supermarket chains Metro, Food Basics and others — increased by 5.8 per cent compared to the same period a year ago. While grocery bills increased during the quarter, the chain said its pharmacy chain, Jean Coutu, did even better, as sales grew by 7.3 per cent in the quarter.
That was partly because of a five per cent uptick in the sale of prescription drugs, but the biggest reason was a surge in what the chain calls “front-store sales,” which includes things like cosmetics and other health and beauty products.
“We are pleased with our results in the second quarter as our teams continued to deliver value to our customers in the current high food inflation environment with competitive everyday prices, growing private label sales and effective promotional strategies,” CEO Eric La Fleche said.
Metro and other grocery chains have come under fire in recent months for seeming to profit from skyrocketing food inflation. The chain has pushed back on those insinuations by noting that its margins — the amount of profit it takes in once it covers its costs — are about the same as they always were, in the low single digits.
“For the year to date, food margins have declined, mainly due to higher cost of sales, partly offset by higher margins in pharmacy,” the chain said.