METRO-RICHELIEU SETS NEW STORES, EXPANSIONS

MONTREAL -- An $80 million project that includes store openings and expansions heads the 1999 agenda for Metro-Richelieu here, Pierre H. Lessard, president and chief executive officer, said in the company's annual report.

work and the opening of new stores. This program . . . will expand retail floor space by almost 4%," he said.

The company's Metro supermarkets average 17,189 square feet while its SuperC discount stores and Marche Richelieu neighborhood markets average 47,420 and 4,621 square feet, respectively.

The annual report did not specify which stores are being remodeled and how many new openings are planned -- or where they are slated.

Lessard said the company in fiscal 1998 invested in the SAP R/3 management software system "with the objective of gaining a competitive edge through better information management and greater efficiency." Lessard also said the new system was put in place last year to get a jump on conversions necessitated by the year-2000 bug. The conversions will be complete "by early 1999" according to the report.

In addition, he said, "In 1999, we will put more emphasis on the merchandising and promotion of our new Merit Selection controlled-brand products, which will gradually replace our Metro -- The Obvious Choice and Marche Richelieu private-label products."

The report explained that, prior to the last fiscal year, Metro-Richelieu sold the transportation segment of its Montreal Grocery division, a move contested in court by the labor union representing the segment's employees. During fiscal 1998, the company, after losing a court decision, resumed transportation activities and inked a new six-year contract with the union employees.

That activity resulted in a $24.1 million unusual charge for the fiscal year, which translated into net earnings of $65.4 million, a 1.2% decrease from the previous fiscal year. Still, the company achieved record sales for an eighth consecutive year, Lessard said. Sales rose 6.4% to $3.7 billion.