Metro faces supplier pressure, CEO says higher grocery prices could be coming

Canadian grocery giant Metro Inc. is already facing pressure from suppliers to accept higher prices in light of a recent tariff war with the United States and consumers should expect slightly higher food bills in the future, its CEO said Wednesday.

“We’re starting to get demands from some suppliers who are, whose products will be, affected by the new tariffs,” Eric La Fleche said during a conference call with analysts Wednesday after the company released its third-quarter earnings report.

The Canadian government implemented tariffs on Canada Day on a number of Americanmade goods, including yogurt, orange juice and maple syrup, in retaliation for U.S.-government imposed tariffs on Canadian steel and aluminum products, which are also putting pressure on some Canadian food manufacturers.

The company is currently reviewing suppliers demands and negotiating prices, La Fleche said.

“If it’s legitimate and if it’s industry-wide, sometimes we won’t have a choice and we will have to accept,” he said, adding the company has already agreed to some minor cost increases.

Metro will continue to ensure its retail prices are competitive, he said, but expects the company, as well as the market as a whole, will have to accept some cost increases.

Ontario’s new minimum wage, which rose to $14 at the start of the year, is adding extra pressure on prices.

“We expect that the cumulative effect of all these cost pressures should start to be reflected at retail,” he said. “We’re just starting to see some minor price increases — nothing major.”

La Fleche’s comments came as Metro reported lower-than-expected earnings in its latest quarter.