Metro reaches deal with workers on strike since March

Metro Inc. has reached an agreement in principle with its employees who have been on strike since March 20.

Unionized employees at the produce distribution centre in Laval, Que., transportation and head office, will vote on Sept. 24 whether to ratify the renewal of the collective agreement.

Over 550 of the workers are represented by Syndicat des travailleurs et travailleuses des épiceries Unis Metro-Richelieu or STTEUMR (La Confédération des syndicats nationaux or CSN), which will present the details of the agreement to members on the ratification vote.

“In the meantime, our stores continue to be well stocked to meet our customers’ needs,” Metro said in a press release on Thursday.

During its third quarter earnings release on Aug. 12, the grocery retailer said the then ongoing strike at the produce distribution centre in Laval was expected to significantly impact the company’s fourth quarter results.

It said that after four weeks in the fourth quarter, its food same-store sales are down 1.5 per cent. It is set to present its fourth quarter results sometime in November.

Despite a positive impact from new store openings, the company’s sales in the third quarter were unfavourably impacted by the labour conflict and its consequences on Metro’s food retail network in Quebec.

At the time, chief executive Eric La Flèche, who will retire at the end of the fiscal year, said the company was committed to reaching a negotiated agreement.

“As much as the strike is having a significant temporary impact, we must preserve the long-term competitiveness of our operations and our ability to continue serving our customers effectively in a competitive market. We will not compromise on this objective,” said La Flèche.

In a note to clients, Royal Bank of Canada retail analyst Irene Nattel said the agreement in principle between Metro and the union leadership is “a constructive step” toward resolving the nearly six-month labour dispute.

Nattel said normalization of operations will likely extend into early next fiscal year as Metro unwinds contingency measures and restores the normal flow of operations.

She said the impact on the fourth quarter should be more modest than what was announced in the third quarter, which bore the brunt of contingency plan ramp-up costs amplified by the timing of Easter at the beginning of the conflict.

The analyst added that, assuming ratification, she expects the strike’s impact to span the entirety of the fourth quarter and carry into early first quarter as the company transitions off third-party logistics providers, restores full assortment in Quebec stores and works to recapture traffic with investments in merchandising and selling, general and administrative.

• Email: dpaglinawan@postmedia.com