Metro name to be largest in Canada with consolidation of five banners in Ontario

[ErickMontreal]

Metro name to be largest in Canada with consolidation of five banners in Ontario

 

48 minutes ago

 

MONTREAL — Venerable grocery banners Dominion and A&P will soon disappear as Canada's third-largest surpermarket chain, Metro Inc. (TSX:MRU.A), plans to consolidate five store names in Ontario under the Metro moniker, born 47 years ago in Quebec.

 

Metro will become the most common supermarket name in Canada, boasting 376 stores in Quebec and Ontario, after 158 stores in Canada's largest province are converted over the next 15 months.

 

Metro will have 376 stores in Quebec and Ontario, after 158 stores in Canada's largest province are converted over the next 15 months.

 

The move supplants IGA as the most common grocery banner, although that chain's stores are owned and operated by different companies across the country.

 

Metro announced Thursday it will spend $200 million to rebrand its stores in Ontario, where the company had been operating under the A&P, Dominion, Loeb, The Barn and Ultra banners.

 

"For Quebecers, it's good news to see a banner that we know well establish itself in Ontario to become the largest banner in Ontario," CEO Eric La Fleche said in an interview.

 

The change will see the disappearance from Canada's retail landscape two venerable grocery names: Dominion and A&P. The conversion will start next month with the rebranding of 49 Dominion stores in Toronto.

 

Hamilton will then lose The Barn, followed by the removal of Ultra in Guelph and Burlington.

 

By the end of 2008, 60 stores will be converted. Loeb will disappear early next year before A&P is converted by the end of 2009.

 

The long-awaited change comes as the Ontario grocery market is in the midst of intense competition, which has driven down profits as chains have been forced to lower their prices to win or keep customers.

 

Besides pressure from the two biggest national grocers, Loblaws (TSX:L) and Sobey's (TSX:EMP.A), Metro faces challenges from U.S.-based department store operator Wal-Mart and Toronto-based Shoppers Drug Mart (TSX:SC), which have both increased their grocery sales.

 

"We think that in Ontario we will be stronger with one banner than with five and we think that the $200 million that we will invest in our stores will help us to better compete in that market," said La Fleche, who recently took over from longtime CEO Pierre Lessard.

 

The only banner not included in the change is Food Basics, which competes in the discount food segment of the grocery market. There are also no immediate plans to open the Metro Plus banner or Brunet in-store pharmacies in larger Ontario stores.

 

No store closures are forecast.

 

The banner consolidation will produce savings by allowing the company to publish one flyer and market one store name.

 

"I think you get more bang for your buck under one name. You can build better equity and more brand awareness across the province and have a more consistent shopping experience across the province," he said.

 

While some stores will only be "refreshed," others will receive major upgrades. Metro's private label brands Selection and Irresistibles will continue to be added to store shelves.

 

Newly stylized Metro signs will be added to Quebec locations over the next two to three years.

 

La Fleche said the name on the store is secondary for consumers than the entire shopping experience.

 

"They want to buy from people they know and trust. They want to buy good product and they want fair price. That's what we're all about and this move is about making that even better."

 

The banner consolidation comes nearly three years after Metro purchased A&P Canada. It recently conducted extensive consumer research and considered maintaining two banner names.

 

The decision was delayed a few months as the company tackled internal IT systems conversions and intense market pressures in Ontario.

 

"We had a lot of work to do to set the foundation and be in a position to do these kinds of moves," La Fleche said.

 

Operating under one banner could make it easier for Metro to eventually expand operations but the company said there are no immediate plans for acquisitions in Western Canada.

 

Metro hopes the changes will improve its financial results, but wouldn't disclose targets.

 

In its financial statement Thursday, the chain reported it earned $92.6 million for the latest quarter, up 3.7 per cent from $89.3 million for the corresponding 2007 period. Sales jumped just under one per cent to $3.37 billion from $3.34 billion for the corresponding quarter last year. Excluding decreased sales of tobacco products, sales were up 1.5 per cent over last year.

 

Earnings per share rose to 82 cents compared with 77 cents last year, an increase of 6.5 per cent.

 

"We resolved the issues associated with our new information systems in Ontario and achieved good performance in our Quebec operations," said La Fleche.

 

With annual sales of nearly $11 billion and a workforce exceeding 65,000, Metro is Quebec's second biggest grocer and a growing food retailer in Ontario.

 

On the Toronto Stock Exchange, Metro shares rose $1.33 to $26.77, a gain of 5.23 per cent.

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METRO deviendra la plus importante bannière alimentaire en Ontario

 

Un investissement de 200 millions $ pour regrouper les supermarchés de la compagnie sous la bannière Metro

 

Toronto, le 7 août 2008 : METRO Inc. (TSX :MRU.A) a annoncé aujourd’hui qu’à partir de septembre 2008, elle regrouperait ses cinq bannières de supermarchés conventionnels en Ontario sous la bannière Metro. Le lancement de la bannière Metro en Ontario sera soutenu par un investissement de 200 millions $, dédié à la rénovation des magasins, à l’amélioration de l’offre alimentaire, ainsi qu’à la réalisation d’une campagne de marketing pour créer, avec ses 158 épiceries, la bannière alimentaire la plus importante de la province. La conversion des bannières Dominion, A&P, Loeb, The Barn et Ultra sous la bannière Metro sera effectuée d’ici les quinze prochains mois. Les magasins Food Basics ne sont pas touchés par ce changement, puisqu’ils œuvrent dans le secteur des magasins d’escompte.

 

« La décision de lancer la marque Metro en Ontario fait partie d’une stratégie à long terme visant à capitaliser sur l’efficacité des activités d’exploitation et de marketing en unissant les forces individuelles des bannières existantes en Ontario et en mettant en commun les meilleures pratiques de nos magasins du Québec et de l’Ontario », a expliqué Eric La Flèche, Président et chef de la direction de METRO Inc.

 

La transition vers Metro débutera en septembre à Toronto avec la conversion des magasins Dominion, de sorte que les magasins Dominion, Ultra et The Barn seront convertis avant la fin de 2008. La conversion des magasins Loeb suivra au cours des six premiers mois de 2009 et celle des magasins A&P avant la fin de 2009. Lorsque le programme de consolidation de la bannière sera complété, le réseau de magasins Metro sera constitué de 376 supermarchés conventionnels au Québec et en Ontario, dont 218 au Québec.

 

METRO investira 200 millions $ pour moderniser ses magasins et accroître l’offre de produits afin de mieux répondre aux préférences des consommateurs ontariens tout en continuant à offrir des prix très compétitifs. La compagnie a commencé à planifier la conversion des bannières ontariennes après l’acquisition d’A&P Canada en 2005. En prévision du projet annoncé aujourd’hui, elle a intégré ses systèmes de gestion de l’information et renforcé sa chaîne d’approvisionnement. La compagnie en profite également pour dévoiler un nouveau logo Metro qui devient le logo de la bannière ainsi que celui de la Société.

 

« Nous sommes très heureux d’entreprendre cette nouvelle étape dans la croissance de METRO », a déclaré M. La Flèche. « Nous bâtissons sur des fondations solides, grâce à notre stratégie ciblée sur l’alimentation, à nos excellents emplacements et à une équipe d’employés soucieux d’offrir à nos clients un service exceptionnel. Nous sommes emballés par les nouveautés qui seront offertes en magasin à partir de septembre. »

 

METRO INC.

Avec un chiffre d’affaires annuel de près de 11 milliards $ et plus de 65 000 employés, METRO Inc. est un chef de file dans les secteurs alimentaire et pharmaceutique au Québec et en Ontario, où elle exploite un réseau de près de 600 marchés d’alimentation sous plusieurs bannières dont Metro, Metro Plus, Super C, A&P, Dominion, Loeb et Food Basics de même que plus de 250 pharmacies sous les bannières Brunet, Clini Plus, The Pharmacy et Drug Basics.