TORONTO
Workers seen on strike outside a Metro grocery store in Toronto.
Profits at Metro Inc. surged past analysts’ expectations in the third quarter, prompting criticism from the union that represents thousands of workers on strike at more than two dozen of its Toronto-area supermarkets.
In response to Metro’s earnings update on Aug. 9, Unifor , Canada’s largest private sector union, said grocery clerks deserve “their fair share” of the company’s double-digit profit gains.
“Frontline grocery workers need Metro to come back to the table with an improved wage offer,” Unifor spokesperson Paul Whyte said in a statement.
But Metro chief executive Eric La Flèche said he wants a deal with the union that ensures the company can stay competitive in the grocery industry amid stubborn food inflation that has forced customers to become more and more price sensitive.
The comments from both sides suggest the stalemate, which has shut down 27 Metro stores for more than 10 days, is likely to drag on.
Negotiators with Metro and Unifor Local 414, which represents roughly 3,700 Metro workers at 27 stores in and around Toronto, have not returned to the bargaining table since union members rejected a tentative deal and walked off the job on July 29.
“We’re clearly disappointed,” La Flèche told analysts during a quarterly conference call on Aug. 9.
The union says its members want more money in the first year of any contract to replace the $2 hourly wage bonus grocery workers received during the pandemic. But one of the union’s negotiators also said Metro has made it clear “there’s no more money.”
La Flèche said Metro wants a deal to re-open the stores “as soon as possible, while ensuring the long-term competitiveness of our company.”
“We had reached a very good agreement that was unanimously recommended by union representatives,” he said in the company’s earnings update.
On Aug. 9, Metro reported a boost in profits during the third quarter that outperformed analysts’ expectations. Sales increased nearly 10 per cent year over year to $6.4 billion in the quarter, resulting in profits of $346.7 million, up 26 per cent — helped in part by a favourable tax ruling. On an adjusted basis, Metro profits were $314.8 million in the quarter, up 10.9 per cent. Adjusted earnings per share of $1.35 surpassed forecasts of $1.29.
“Metro workers are fighting for decent work and pay. It is the minimum every worker should expect,” Unifor national president Lana Payne wrote on Twitter , in response to Metro’s earnings update. “And there are no excuses. Take a look at those profits.”
Unifor also represents employees at the Financial Post’s Toronto newsroom.
Metro reported a 20-basis-point decline in its gross profit margin, which La Flèche told analysts on the call was proof the grocer has been absorbing a portion of inflationary cost increases from suppliers because “there are limits to what we can charge to our customers.”
RBC Capital Markets analyst Irene Nattel said the quarter was a “very strong” showing for Metro, a Montreal-based retailer with more than 1,600 supermarkets and pharmacies in Ontario and Quebec, including Food Basics, Super C and Jean Coutu.
Metro declined to comment on how much the strike-related store closures are costing the business. Last week, spokesperson Marie-Claude Bacon said all perishable items at the shuttered stores that could be sold were moved to Metro’s other locations in the area, while products that were deemed unsellable but “still good for consumption” were donated to food banks.
On Aug. 9, Bacon said negotiations haven’t restarted since union members rejected a tentative deal last month.
“We’re still committed to the bargaining process,” she said.
In mid-July, Metro and the union bargaining team agreed on a tentative deal that would have boosted full-time wages by $3.75 an hour for the most senior full-time employees over four years — with a $1.05 per hour bump in the first year, followed by 90 cents in each of the three following years, according to Local 414 president Gord Currie. Part-time employees, who make up more than 70 per cent of the roughly 3,700 workers on strike, would have seen a maximum increase of $2.75 over four years, Currie said, adding the proposed increases were “the best we’ve had in 25 years.”
But Local 414 members voted to reject the deal and go on strike. Currie said his members weren’t satisfied with the wage increase and want at least $2 extra per hour in the first year of the deal. The demand has to do with a $2 hourly wage bonus that Metro and its rivals paid during the early months of the pandemic in 2020.
“They want the two dollars back ,” he said last week.
Canada’s top three grocers — Loblaw Cos. Ltd., Sobeys’ parent Empire Co. Ltd., and Metro — cut their so-called “hero pay” bonuses for front-line workers on the same day in June 2020, a controversy that pushed the federal government to strengthen its laws against wage-fixing.
“They made no bones about that. They want $2 in the first year,” Currie said. “(Metro) told us there’s no more money there. So we’re going to go back and look for more money obviously and try to get a deal.”
• Email: jedmiston@postmedia.com | Twitter: jakeedmiston
