January 26, 2016
Metro sees opportunity for Canadian suppliers
Weak dollar providing local producers with an increasing competitive advantage.
Metro’s plans to source goods locally are creating new opportunities for Canadian suppliers, particularly of produce and meat products, which have been subject to rising prices stemming from the weak loony. So said Eric La Flèche, the company’s CEO, in a wide ranging interview with journalists, following the company’s annual general meeting this morning.
La Flèche cited suppliers of “root” products, such as carrots and potatoes, as examples of companies that have seen a significant improvement in their competitive positions, as a result of the nearly 35% drop in the loony, from its multi-year high.
Quebec’s “CEO of the Year” does a victory lap
Metro officials were all smiles, as they basked in a slew of growing recognition of the company’s positive financial results, which have boosted its share price, - and managers’ variable compensation packages, - to new highs. Last week the web-site Seeking Alpha called Metro the best run grocer in Canada, and second best in North America.
This came of the heels of Les Affaire magazine’s naming La Flèche as “CEO of the Year,” late last year. “Customer satisfaction is up, the number of transactions is up and we gained market share,” said La Flèche. “We are very happy with our results.”
New stores, $300 million in new investments, online test
La Flèche also outlined a strategic plan that he hopes will continue the company’s positive performance, in an admittedly tough economic environment. These include plans to reinvest $300 million into its infrastructure this year. Ten new stores will be opened and as many as 30 will be renovated. Metro will also test an online offering soon, likely later this year in a region in Quebec, where the retailer’s head office is located.
Metro also got an indirect double boost yesterday, when Couche Tard, in which the company has a large stake, announced that Claude Tessier, formerly president of Sobey’s IGA business operations unit, will join Couche Tard as its chief financial officer. The move will not only benefit the convenience store operator, whose shares have accounted for nearly 20% of the Metro’s market capitalization, it will also deprive an arch-competitor of key talent.
Women in management targets “not in shareholders’ interest”
La Flèche also confirmed that Metro has set a 25% target for the number of women that it will have on its board of directors, a target which it is presently exceeding. This morning, Metro shareholders elected Christine Magee, a seasoned retail industry veteran, to its board. She will replace Paule Gauthier, who is retiring, keeping the percentage of women on the board at 36%.
However La Flèche ruled out setting specific targets for women in the company’s internal management as “not in shareholder’s interest.” La Flèche also gave his traditional “no comment,” to questions as to whether the company would address challenges in building tonnage volumes on a same store basis, by making new acquisitions. La Flèche also labelled questions as to whether Metro’s strong stock performance and recognition south of the border, would make it a takeover target as “speculative.”
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Peter Diekmeyer Communications Inc.