"We are negotiating as best we can and delaying as much as we can some of the increases requested by our suppliers," La Flèche told a virtual news conference.
"Unfortunately, there will be some prices starting to go up."
La Flèche said one product that Metro shoppers will pay more for is orange juice, because of problems with orange crops.
"That one's going to be substantial," he said. "We're clearly going to be selling a lot less orange juice."
However, La Flèche offered some hope for future stability, saying the number of requests for price increases by suppliers is down substantially from the highs of last year and the year before.
"So that's good news," he said. "And the size of the demands is coming back to more normal levels."
The comments came as the grocery and drugstore retailer reported a first-quarter profit of
Metro said its profit amounted to
Sales totalled
Same-store sales for food were up 6.1 per cent, helped in part by the timing of the end of the quarter relative to Christmas. Adjusting for the Christmas week shift, Metro said same-store sales for food were up 3.4 per cent. Same-store sales for pharmacy goods were up 3.9 per cent.
La Flèche said Metro's discount store banners continued to fuel growth, while the company's private-label brands are reaching record penetration levels.
The company opened nine new discount stores in
Grocery inflation in
Metro's internal measure of inflation at its stores was below that in its latest quarter at four per cent, said La Flèche, and down from the previous quarter.
Metro isn't the only grocer facing price increase requests from suppliers. Loblaw and Empire have said that some of the biggest suppliers are coming to them with unjustifiable price increases.
Some of the demands Metro is receiving are "too high and hard to justify," said La Flèche, causing tension in negotiations. The grocer hasn't reached a point where it will stop selling these products, he added, but it sometimes makes other adjustments instead, such as reducing how much it sells of a certain product.
The grocers have been under political pressure to stabilize food prices, with Industry Minister
This week, Champagne said in a letter to the competition commissioner that the large grocers haven't been transparent enough about the causes of food inflation, "and they have failed, for the most part, to provide regular updates on initiatives aimed at stabilizing food prices in the country."
He suggested that a follow-up be done to the
La Flèche said Metro "collaborated fully and transparently" with the
In its outlook, Metro continued to say it expected significant headwinds in 2024 with the launch of its automated distribution centre in
It says it expects some temporary duplication of costs and learning curve inefficiencies, as well as higher depreciation and lower capitalized interest.
The company maintained its guidance for operating income before depreciation and amortization to grow by less than two per cent and adjusted net earnings per share to be flat to down
"We expect to return to historical earnings growth after fiscal 2024," said La Flèche at the company's Annual General Meeting earlier that same day.
On an adjusted basis, Metro says it earned
Metro said Tuesday it will pay a quarterly dividend of
Metro shares closed down 1.56 per cent at
— With files from Nojoud Al Mallees in
This report by The Canadian Press was first published
Companies in this story: (TSX:MRU)
© 2024 The Canadian Press. All rights reserved., source