Metro to Grow Loyalty Program

JON SPRINGER

MONTREAL — Declaring an initial test a success, Metro Inc. said last week that it would roll out its “Metro & Me” loyalty card program throughout Quebec this fall.

Metro launched the loyalty card program in April at 25 stores in the Quebec City region.

“The response has been very positive, and enrollment for the card is above expectations,” Eric LaFleche, president and chief executive officer, told analysts in a conference call, adding that the percentage of sales scanned on the card also came in above the company’s estimates and that card users are spending more as a group than those without the card. “I think it’s very promising.”

Metro separately operates a rewards card program in Ontario through Air Miles. That program is getting a lift from a newly crafted partnership with the data analysis firm Dunnhumby, LaFleche said.

Metro officials discussed the new card program while reviewing sales and earnings gains during the fiscal third quarter ended July 3.

Net earnings improved 6.6% to $116 million (U.S.), and EBITDA improved 6.3% compared with the same period last year. Sales of $3.44 billion improved by 1.4%, while same-store sales declined 0.6%, due mainly to deflation in certain categories.

Metro noted that it achieved sales increases despite having the benefit of food price inflation and a competitor’s strike in the year-ago period. LaFleche estimated deflation was about 2% during the quarter — about the same as it was in the second quarter when Metro officials said deflation “peaked.”

“We see the trend continuing at least until the fall,” LaFleche said last week, “and it would be imprudent to make any predictions beyond that.”

LaFleche characterized the Canada grocery market as “competitive,” particularly among discount stores in Ontario, which have been especially active with promotions. This was a likely reference to competitor Sobeys, which in Ontario has been in the process of promoting its new discount concept, FreshCo.

Overall, he described consumers in Canada as “cautious.”

“I think the recession of last year has had a carryover in people’s behavior,” he said. “I think they are more careful in how they spend, how they look for specials, just more careful in general. There is a value consciousness that’s more prevalent than before.”