Retail Insight Network

Daily Newsletter

11 August 2023

Daily Newsletter

Metro’s Q3 FY23 sales increased 9.6% to $4.7bn

Performance was driven by strong same-store sales and good operating leverage.

Grocery store chain Metro has reported sales of C$6.4bn ($4.7bn) in the third quarter (Q3) of fiscal year (FY) 2023, up 9.6% compared to the same period in FY22.

During the period ending 1 July 2023, the retailer’s food same-store sales grew 9.4%. Online food sales also rose by 99.0% against the prior fiscal. Pharmacy same-store sales were up 5.9% in Q3 FY23.

Metro’s operating income before depreciation and amortisation for Q3 FY23 was C$612.3m, representing 8.4% growth from the corresponding quarter in FY22.

Its gross margin for the third quarter was 19.6%, down from 19.8% in the prior year's quarter.

The retailer posted net earnings growth of 26.1% to C$346.7m in Q3 FY23 while its adjusted net earnings for the period increased 10.9% to C$314.8m.

Its diluted net earnings per share increased 30.7% to C$1.49 over the FY.

Metro president and chief executive officer Eric La Flèche said: "With persistent food inflation, our teams did an excellent job to offer good value to our customers, resulting in market share gains and tonnage growth, driven by our discount food stores.

“Our loyalty programme MOİ was successfully launched this quarter and we are pleased with the strong customer response so far. This enhanced programme provides even more value to customers by offering multiple ways to earn and redeem points on food and pharmacy purchases in Québec.

“We are clearly disappointed with the current labour dispute in 27 of our Metro stores in the Greater Toronto Area, given that we had reached a very good agreement that was unanimously recommended by union representatives. We look forward to a resolution and the re-opening of our stores as soon as possible while ensuring the long-term competitiveness of our company."

APAC duty-free market expected to grow fastest, fueled by rising income levels and international travelers

Per latest GlobalData estimates, the global duty-free market retailing market was valued at $49 billion in 2022, its highest level ever as it bounced back from the pandemic impact, and is expected to grow at a CAGR of more than 28% during the period 2020-2026, driven by government initiatives, rising passenger numbers, major global events (for instance global sporting tournaments) and the renewed popularity of cruise trips. Infrastructure investments will also play an important role, particularly airport expansion and space refurbishment, and investments in arrivals duty-free formats. That said, growth will be held in check in the years ahead by the permanent erosion of disposable income from the heightened cost of living impacting demand for air travel. The duty-free market in the APAC region showed strong growth in 2022, as traveler numbers surged in response to the lifting of travel restrictions. To cater for rising demand in the region, many airports in the APAC area are expanding and modernizing, giving duty-free stores greater space that will allow them to attract more customers. The future of APAC duty-free retail is also being shaped by the adoption of technology. The rise in online shopping, mobile payments, and digital marketing are giving businesses new ways to connect with customers and improve the shopping experience.