METRO'S SUPER C GETS BIGGER, CLEANER, BETTER

DAVID KOSUB

MONTREAL, QUEBEC -- Few Canadian companies are as keen to expand or are as sold on the discount food retailing format as Metro here.

With 27,000 employees and annual revenues topping $5 billion Canadian, Metro will boast more than 50 Super C discount stores in Quebec when it opens yet another outlet in the eastern Montreal district of Hochelaga-Maisonneuve later this year.

According to one company official who preferred to remain anonymous, Canadian consumers have taken to discount in a bigger way than Americans for one reason: They have less take-home pay.

"The Canadian population, on average, has lower disposable income than the American population. That has an influence on chains starting discount formats because there's a market for it," the official said.

All the essential components for a classic discount store are there at Super C, said the official: a limited assortment of products, with no special cuts of meat or deli; low prices; and customers willing to bag their own orders. "It's based on a low-price, low-cost economic model and on volume."

Yet the discount format, particularly at Super C, has also changed over the years. Not content to recycle older traditional supermarkets into bare-bones price formats, Canadian discount supermarkets are evolving into price formats that "are bigger and cleaner and better," the Metro official said.

"You can't be low price if you're not low cost, so you can't veer too much. But the quality of the store and the products and the layouts tend to improve."

Metro's enthusiasm for the discount format is echoed by other retailers across Canada, including Sobeys, Stellarton, Nova Scotia, which operates the Price Chopper discount banner. Discount represents "an important part of our format offering," said Andrew Walker, a spokesman for Sobeys. "[It] continues to be a major part of how we do business and how we serve our customers." Walker added that Sobeys "certainly continues to open more Price Chopper stores."

The remark could be something of an understatement if Bill McEwan, Sobeys chief executive officer, gets his way.

Sobeys remains "a very willing, motivated and capable purchaser of any strategic acquisition that comes along. Big or small, if it can suit our growth objectives, we're ready," McEwan said in a recent interview with the Toronto Globe and Mail.

Both Sobeys and Metro are reportedly interested in major acquisitions in the coming years, including possible takeovers of A&P in Ontario, which runs Dominion stores and discounter Food Basics, as well as Safeway in western Canada.

Underpinning it all, McEwan told the Toronto Globe and Mail, is price competition, which he described as "a condition for the long term."