Metro plans to cut store hours over minimum-wage hit

TORONTO Metro Inc.’s customers have shown a clear preference for home delivery of online goods, the grocery company’s chief executive said Wednesday, confirming plans to extend its e-commerce service into Ontario at the end of this fiscal year or in early fiscal 2019.

The news comes as industry players grapple with increased costs due to a minimum wage hike in Ontario passed in the legislature Wednesday, and stiff competition in the market thanks to expansion from Costco, and Amazon’s push into stores with its August purchase of Whole Foods.

Metro has said it expects to incur $45-$50 million in extra costs in 2018 from the minimum wage hike in Ontario, and in response La Fleche said the company hopes to improve productivity and will scale back hours at some stores.

“Some 24-hour stores will no longer be 24-hour stores,” he said. “We have to manage the hours the best we can without reducing customer service.”

The minimum wage is set to rise to $14 an hour on Jan. 1 from its current level of $11.60, with the increase to $15 coming in 2019.

Metro, with stores in Quebec and Ontario, now offers click and collect at seven of its stores in Quebec, as well as home grocery delivery covering 60 per cent of the province’s population.

In the meantime, Metro has felt the pain of Costco’s expansion. The popular warehouse club is on course to open seven stores in Canada in 2017.

“There is a big club format that has added a lot of square feet in the last 18 months,” La Fleche said.