Metro's Laval strike dents Q3 earnings forecast
The 13-week strike at the grocer's fresh-produce hub is costing the company—and shortages remain despite contingency plans.
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Metro Inc. is warning that the ongoing strike at its Laval fresh produce distribution centre will weigh on third-quarter earnings.
The grocer said its adjusted earnings per share is estimated between $1.22 and $1.27 for the quarter ending June, compared with $1.52 in the same period last year. Food same-store sales for the first 14 weeks of its 16-week third quarter were down 1.5 per cent year-over-year.
The strike began on March 30 and shows no sign of ending. Metro implemented a contingency plan immediately to keep fresh produce on store shelves, incurring extra costs. After a ramp-up period, the company says the plan is now enabling "consistent and reliable store replenishment" across about 300 Quebec stores.
Metro said the union rejected its latest offer, presented earlier this month, which included "significant increases, particularly in the first 12 months" for wages and working conditions. Marc Giroux, Metro's chief operating officer, called the union's counteroffer—delivered Thursday—unreflective of the broader labour market. "We are very disappointed that the union came back with an offer that in no way reflects the broader labour market or the competitive reality of our industry, especially after a 13-week strike," Giroux said in a statement.
Union president Matthieu Lafontaine countered that Metro has the means to meet demands and accused CEO Éric LaFlèche of bearing sole responsibility for the prolonged dispute. The Laval distribution centre employs 550 unionized workers. The company will report full third-quarter earnings on August 12.