Title: New Metro CEO will have work cut out
Sub-title: Eric Richer La Fleche, who takes over as the Quebec based grocer’s CEO next April, will have a tough job on his hands growing earnings in an increasingly competitive market environment.
It hardly came as a complete surprise. A day before Metro’s fourth quarter analysts’ conference in November the company quietly put out a press release announcing that Eric Richer La Fleche, its chief operating officer, will take the helm from outgoing CEO Pierre Lessard in April of next year.
That said, in a time when many executives work well into their late 60s, that Metro would let an industry giant like Lessard get away was no sure thing either. “Seventeen years of consecutive earnings growth is a tough act to follow,” admitted La Fleche, who has been groomed for the top spot ever since he was promoted to COO in late 2004.
That’s putting mildly. During Lessard’s time at the helm, Metro has grown from a small Quebec grocer, to a national player. Its revenues have shot up five-fold, both through same store sales growth and through the acquisition of 48 Steinberg stores, 41 Leob stores and 236 A&P outlets.
La Flèche could not be taking over at a tougher time. The week his promotion was announced, the company announced that that its sales and profits for the most recent quarter were down and its stock was trading at a 52 week low. Furthermore Metro is just now bouncing back from host off challenges that it faced during the massive and rapid conversion of its IT system in the wake of its acquisition of A&P’s Canadian operations.
In a sign of how tough the industry is right now, despite a $300 million capital budget for next year, overall square increases in square footage of the company’s retail outlets are only slated to rise at the lower end of the 1% to 2% range that it normally targets.
There is some good news however said La Fleche. “Our financial position remains solid, we continue to generate good cash flow and to invest in our retail network.” Sounds good. But these days CEOs are judged more on how fast they can get a ship to sail rather than on whether can enable it to stay afloat.
Peter Diekmeyer (peter@peterdiekmeyer) is Canadian Grocer’s Quebec correspondent.
|© 2007 Peter Diekmeyer Communications Inc.|