(MONTREAL, CANADA) – Metro’s third quarter profit fell 35% as a strike at its only produce distribution centre in Quebec entered its fifth month, costing the grocery and pharmacy retailer an estimated C$90 million in lost profit and direct costs.
Metro reported net profit of C$211.3 million, about US$151.1 million or £111.9 million, for the 16 week period ended July 4, down from C$323 million, or about US$230.9 million or £170.9 million, a year earlier.
Chief executive Eric La Flèche said the quarter was difficult as the strike continued to disrupt operations. La Flèche is due to retire as chief executive next month.
The strike at Metro’s Laval, Quebec, produce distribution centre began on March 30. About 550 unionised workers are seeking higher pay and improved working conditions.
The Laval facility is Metro’s only produce distribution centre in Quebec and supplies more than 350 stores across the province, including Metro and Super C locations.
La Flèche told analysts on Wednesday that there had been no formal negotiations for several weeks. He said Metro was ready to resume talks but argued that the union needed to return to negotiations within what he described as a realistic framework reflecting competition in the grocery market.
Metro made an offer in June that it said included significant increases in wages and improvements to working conditions. The company said the proposal was comparable with terms for similar jobs in the market.
The union subsequently submitted a counter offer, which Metro said it could not accept.
The dispute cost Metro an estimated C$90 million in lost profit and direct costs during the third quarter. That is about US$64.4 million or £47.7 million at indicative exchange rates for August 12, 2026, adding to pressure on the retailer’s financial performance.
Metro warned that the strike is also expected to have a significant effect on fourth quarter results because there is no clear timetable for resolving the dispute.
The company said same store sales had already fallen 1.5% during the first four weeks of the fourth quarter, suggesting that the disruption was continuing to affect trading after the third quarter ended.
While Metro faces labour pressure in Quebec, it is changing its retail strategy in Ontario as competition for price conscious shoppers increases.
The company plans to convert 10 conventional Metro stores to its Food Basics discount format. The changes will include stores in the Toronto area and Ottawa.
Metro chief operating officer Marc Giroux said the move should help the company gain market share, improve its position in important markets and generate returns above its normal investment targets.
Giroux is due to become Metro’s chief executive on September 27, succeeding La Flèche.
The planned store conversions come as major Canadian grocery companies expand their discount operations. Loblaw and Empire have increased their presence in discount retail as consumers facing higher household costs continue to seek lower prices.
Metro’s total third quarter sales rose to C$6.97 billion, about US$4.99 billion or £3.70 billion, from C$6.87 billion, or about US$4.91 billion or £3.62 billion, a year earlier.
The increase came despite a 1.5% fall in food same store sales during the quarter, showing that higher sales in other parts of the business helped offset weaker food retail performance.
Metro’s pharmacy business performed better. Pharmacy same store sales increased 4.8%, supported by a 6.4% rise in prescription drug sales and a 1.4% increase in front store sales.
Reported profit was C$1.00 per diluted share for the quarter, compared with C$1.48 per diluted share a year earlier.
On an adjusted basis, Metro earned C$1.24 per diluted share, down from C$1.52 a year earlier.
The results leave Metro facing two separate pressures in its Canadian retail business. In Quebec, the company must resolve a prolonged labour dispute affecting its produce supply network, while in Ontario it is seeking stronger growth through a greater focus on discount stores.
The Quebec strike remains the more immediate financial issue. Metro has not provided a timetable for a settlement and has warned that the effects will continue into the fourth quarter.
The company will therefore enter the next reporting period with sales, profit and operating costs still exposed to the outcome of the labour dispute, while its planned Food Basics conversions point to a broader effort to compete more effectively for Canadian consumers seeking lower grocery prices.
Currency conversions are approximate and based on indicative exchange rates around August 12, 2026. Exchange rates fluctuate. Figures originally reported in Canadian dollars are also shown in US dollars and pounds sterling for reference.