- Metro, a Leader in the Quebec Food Industry (1988-1997)
- Meeting New Challenges
- Implementation of a Turnaround Plan
- Banner Repositioning and New Breakthrough
- Ever Onward
- Modern Management Adapting to Change
- Metro... in Touch with Consumers
- Metro-Richelieu Inc.: A Dynamic Company!
- Poised for a Bright Future
Quebecers' spending patterns evolve very quickly over the ensuing decade. The recession, fluctuating interest rates and the implementation of the GST in 1991 lead to progressive cuts in consumer spending. Directly affected by this trend, the food industry also has to overcome problems inherent to its own sector. Weak demographic growth, an aging population, urban sprawl, cocooning and lifestyles that leave little time for meal preparation are just a few of the many factors that have segmented the customer base. As a result, stores have to intensify efforts to secure and maintain customer loyalty.
In an increasingly complex market, Metro-Richelieu Inc.'s excellent reputation and extensive reach are powerful assets around which the Company develops imaginative marketing programs showcasing the diversity and distinct positioning of its banners.
In the wake of its acquisitions and listing on the
Montreal Exchange, Metro-Richelieu Inc. increasingly projects a
dynamic corporate image, raising its profile in the financial
community. Its presence in the pharmaceutical distribution sector,
which offers excellent development potential, opens up promising
new opportunities. Between 1988 and 1991, most of the Company's
efforts focus on consolidating its operations as a whole, making
whatever adjustments are needed. Metro-Richelieu Inc. thus opts to
divest itself of operations considered less profitable, focusing
instead on its core business - the food industry - while seeking to
improve its position in the pharmaceutical sector.
With the proliferation of superstores, specialty shops and public markets, more and more grocers realize that they have to remodel their stores to retain or increase their clientele. They know they can rely on the Company's support. Launched in the mid-1980s, the "Corvée-Rénovation" program quickly becomes a cornerstone of the strong cooperation between Metro-Richelieu Inc. and its member-grocers. Retailers who join the program receive a grant, in addition to professional advice from a team of experts specially trained to help them plan and finance their project, adapting their stores to new consumer expectations. Year after year, an ever-increasing number of grocers have participated in the program.
Another bold project launched in 1987 attracts grocers' interest. Intent on fostering the development of more modern stores, Metro-Richelieu Inc. introduces "Metro 5 étoiles", a new concept adapted to customers' changing tastes and featuring several specialty counters (bakery, fish, delicatessen, cheese, etc.).
After several years of rapid growth, Metro-Richelieu Inc.
posts disappointing results in 1989 and 1990. A dismal economy,
fierce competition and losses from the weak return on some
acquisitions place the Company in a difficult financial position.
The Board of Directors reacts quickly, beginning with a review of
its priorities. In 1990, Metro-Richelieu Inc. hires a new President
and Chief Executive Officer and appoints a Vice-Chairman of the
Board: Pierre H. Lessard and Paul Gobeil, two men who know each
other well and who bring with them a total of 30 years' experience
in the food industry.
Under their direction, a major turnaround plan is mapped out. The
goal is to decrease operating costs and increase the Company's
efficiency. To this end, Metro-Richelieu Inc. restructures its
operations and concentrates on the food and pharmaceutical sectors.
This approach allows a rapid return to profitability. As early as
1991, the Company posts a net profit of $9.4 million.
Management also decides to create new marketing programs. Metro-Richelieu Inc. seeks to revamp its banner's positioning in an effort to better meet most customers' expectations. This requires the development of distinctive strategies to challenge the competition and clearly position the various banners.
As leaders in the supermarket sector, Metro stores have already distinguished themselves by the quality of their service and the professionalism of their retailers. In 1992, Metro coins a catchy new slogan: Grocers by Profession. What makes this slogan so powerful is that it reflects both the mission of Metro supermarkets as well as the public's perception of them.
The Marché Richelieu banner is already firmly entrenched in the neighbourhood store sector. Additional efforts are made to increase the quality of service and enhance the welcome which customers have come to value. Finally, the Super Carnaval formula is entirely re-engineered, from the price structure, advertising and marketing program to the interior design. By the end of the year, these outlets reflect their mission as discount food stores and display the Super C banner.
In 1992, Metro-Richelieu Inc. concludes a major
transaction that further strengthens its presence in the Greater
Montreal area: it acquires the leases and rights to 48 Steinberg
grocery stores. This purchase expands the Company's retail floor
space by 1,265,000 square feet and results in an additional $600
million in annual sales. Of these 48 outlets, 40 are converted to
the Metro banner, six become discount food stores (four Super C and
two Sanpri), while the remaining two retain their 5 Saisons
specialty formula.
All of these efforts are productive, and the Company reports rapid growth, despite the difficult economic climate. In 1992, sales rise 4% to $2.3 billion, while profits reach $13.1 million, up 39% over the previous year. Metro-Richelieu Inc. is now supplying 1,200 grocery stores and a growing number of drugstores. The turnaround plan is indeed a resounding success.
In January 1993, Metro-Richelieu Inc. is listed on the Toronto Stock Exchange and, with the previous year's acquisitions, its sales rise nearly 20%.
The Company welcomes this opportunity to redefine its banner positioning while developing new concepts to revitalize its network to better meet customers' changing needs.
This leads to the implementation of a major store renovation, modernization and expansion program.
In 1993, all 282 Metro supermarkets adopt the 5-P concept - price, product, presentation, cleanliness ("propreté" in French) and personnel -, offering consumers a greater variety of fresh products and groceries, including several regional, seasonal, ethnic and exclusive products of superior quality.
In 1996, the Cardinal concept is developed specifically for Marché Richelieu. Its goal is to provide these neighbourhood stores with an image highlighting the food's freshness and quality and the renovated store's warm and welcoming ambience.
Metro-Richelieu Inc. also includes its Super C discount food stores in its comprehensive revitalization program, developing a new presentation in response to consumers' expectations and needs.
Between 1995 and 1997, the Company invests a total
of more than $150 million in its retail network.
In a sector as competitive as the food industry, players must constantly improve and innovate. This fact is not lost on Metro-Richelieu's management which, in the early 1990s, heightens efforts to remodel its stores and develop new programs.
From a marketing standpoint, the early 1990s are marked by a number of initiatives.
In 1993, Metro-Richelieu Inc. launches a new program: Metro Budget Prices Everyday Savings. Prices on some 4,500 staple goods are reduced, providing regular Metro customers with substantial savings.
Metro-Richelieu Inc. traditionally offers an extensive list of highly popular house-brand products. In 1993, no fewer than 1,700 items feature a Metro, Marché Richelieu or Super C label, and the Company is determined to improve their quality, variety and presentation. It therefore decides to alter all of its labels to project a more modern image.
Metro-Richelieu Inc. has always strived to offer
its customers products at the cutting edge. In 1994, the Company
becomes the first in Quebec to launch its own private beer label.
The introduction of Norois beer is followed a year later by Norois
Dry. In 1996, its banners offer a total of 1,850 house-brand
products, including Sélection Mérite, its new line of
gourmet products launched during the Holiday Season.
In subsequent years, a number of management tools are developed at the request of Metro-Richelieu Inc.'s executives, to help grocers better manage their stores or facilitate the work of employees. In 1994, the Company conducts an in-depth review of all its office information systems and the equipment used for data control and transmission. For instance, the marketing department develops a management system providing better information on the consumer habits of various ethnic communities.
Making the most of the latest information technologies, new electronic data interchange procedures allow Metro-Richelieu Inc. to rapidly interact with its many partners.
Metro-Richelieu Inc. continues to offer a variety of training programs designed to help its staff adjust to rapid technological advances. In 1995, some 3,000 employees attend one of the many training sessions organized by the Company.
In addition, the Company develops a number of programs promoting better in-house relations. These include the publication of Mericom, a corporate newsletter to all employees. It also organizes special events to recognize the outstanding performance, commitment and contribution of its retailers, employees and retirees.
The Company also makes it a point, as well, to participate in many cultural, social and sports events and support a variety of humanitarian causes. Metro-Richelieu Inc. is a partner in the Matins Symphoniques Metro of the Montreal Symphony Orchestra, the Grands Ballets Canadiens' annual presentation of The Nutcracker, the Quebec City Summer Festival, etc. Its employees and members are also closely involved in the Centraide and Moisson Québec campaigns, Opération Nez Rouge and so many more.
Metro Richelieu Inc. constantly strives to stay in touch with consumers, remaining attuned to their expectations and needs, as this allows it to provide increasingly better service.
The Company's research department conducts many surveys, studies and discussion groups. In 1996-1997, some 45,000 people are interviewed on topics such as consumer trends, customer satisfaction, advertising, promotions and other issues. The various studies confirm, among other things, that Metro is perceived as the chain offering the best savings.
Metro also publishes the most widely read circular in Quebec. With a weekly circulation of 2,850,000, it reaches 83% of Quebec households and is referred to by 55% of those responsible for shopping.
The Metro: Grocers by Profession advertising campaign, which enters its sixth year in 1997, enjoys the highest level of visibility. This campaign has earned Metro no fewer than 26 awards of excellence in both Canada and the United States. The strength of the Grocers by Profession slogan lies in the fact that it clearly defines Metro's position where its growing customer base is concerned.
In response to the needs of consumers concerned with savings, Metro launches the EconoMetro Plan, an information campaign highlighting seven ways to save at Metro.
In 1996, the Company acquires Gestion J.L. Duval Ltée, a wholesaler in Eastern Quebec. Posting excellent financial results once again, Metro-Richelieu Inc. sets new sales and profit records for the sixth straight year. Sales rise from $2.2 to $3.3 billion between 1990 and 1996, while net earnings reach $61 million in 1996, compared to a loss of $9 million in 1990.
During this period, the Company's executives successfully reduce the long-term debt, while increasing shareholders' equity to over $240 million by 1996. They also buy back 25.3 million shares, at a cost of $123.4 million. On its 50th anniversary, Metro-Richelieu Inc. can look to the future with confidence and optimism.
Over its 50-year history, Metro-Richelieu Inc. has become a leader in the Quebec food industry. By 1997, its steadily growing sales have made it the 11th largest company in Quebec, and the 45th largest in Canada.
From the outset, the Company grows relentlessly thanks to the quality of its partnership with its retailers, which is unique in the food industry. It also relies on the skills and commitment of its 6,500 employees.
Winner of the prestigious Mercure as Company of the Year of the Quebec Chamber of Commerce in 1994, and receiving the same distinction from Les Affaires in 1996, Metro-Richelieu Inc. is rightfully proud of its retail sales network: its state-of-the-art Metro supermarkets, No. 1 in Quebec; its Super C discount- food outlets in full development; its Marché Richelieu stores and its welcoming convenience stores serving customers in the neighbourhoods where they live.
Modernization, renovation, expansion and the construction of new stores remain a key priority at Metro-Richelieu Inc. in the coming years. Between 1997 and the year 2000, the Company and its retailers invest some $200 million to expand their network's retail sales space by 800,000 square feet to further increase the 34.22% share of the Quebec food market they currently hold.
