Ontario minimum wage hike will cost Metro $50M next year, grocer says
Montreal-based grocer joins other retailers in saying rising wages will stretch their thin margins
Ontario's recent decision to hike its minimum wage to $15 an hour would cost Metro tens of millions of dollars next year and put pressure on the entire industry, the grocery chain's CEO said Tuesday.
In revealing its quarterly results, the chain said it would be exerting " strong control" over its expenses in the coming year, citing wage increases as a major factor in its outlook.
"The announced minimum wage increase in Ontario will put significant pressure on our industry in 2018," Eric R. La Fleche said.
"We estimate the impact of the increase in the minimum wage recently announced in Ontario to be approximately $45 to $50 million on an annualized basis."
The comments come on the heels of similar ones from other retailers who say rising wages will stretch their thin margins and even put many out of business.
Metro rival Loblaw said last month that it expects rising wage pressures will cost it $190 million next year.
Metro gave the warning on wage costs as it revealed quarterly results for the three-month period ended July 1, during which the chain's net income rose 3.7 per cent, or $4.5 million, compared to the same time last year, at $183 million or 78 cents per share.
Metro's overall sales edged up 1.4 per cent or $58.7 million to $4.07 billion, but same-store sales dropped 0.2 per cent.