Nearly a year after it launched its Metro & Moi loyalty card program in Quebec, Metro Inc. is starting to see results that are leading to sales at its stores, says the retailer’s president Eric La Flèche.
Speaking to analysts at the CIBC Retail and Consumer Conference in Toronto Wednesday, La Flèche outlined how the loyalty card program has 900,000 members in Quebec and how the company is starting to use that data.
La Flèche said Metro is sending out personalized letters to cardholders to thank them for their business and give rebates and coupons for products they these individual customers have bought. “So [the offer] is relevant to them,” he said. He added that his wife had recently received $65 in incentives in the mail. “She’s a very loyal customer.”
La Flèche said that the loyalty card is driving basket growth and that Metro & Moi cardholders are bigger spenders at Metro stores than average shoppers.
Dunnhumby, the global customer loyalty firm that Metro hired to develop the Metro & Moi program, is starting to work through the data with the goal to increase sales from existing shoppers. Dunnhumby is doing the same with data Metro collects from Air Miles cardholders in Ontario.
La Flèche also provided some numbers from a recent customer satisfaction survey of Metro & Moi cardholders. Over 90% “like or really like” the program and 70% think it’s generous. Metro & Moi’s program is set up so that each point collected by a customer is worth a dollar, and it advertises that simplicity to potential new cardholders.
In his presentation, La Flèche also commented on various challenges faced by the grocery trade, as well as other aspects of Metro’s business. He cited rising energy costs, particularly in Ontario, as a burden that grocery retailers have had to absorb.
On the ongoing issue of food-price deflation, and the prospect for higher prices this year, La Flèche said “inflation will come” but that “it will likely be in the back half of this year rather than the first half.”
La Flèche said his company has raised some prices already and that he expects regular priced items will cost more but that retailers will remain sharp on the pricing of items on promotion. He added there is a danger in too much price promotion because eventually it doesn’t pay off.
Referring back to data collected through the Metro & Moi program, La Flèche said that Metro is looking at which customers are price sensitive and which are not. In some cases, Metro’s most loyal shoppers aren’t as price sensitive on certain items as not-so-loyal shoppers. “The data is telling us the behaviour of our best customers,” he said.
On the merchandise side, the company is trying to boost its produce sales at Metro-bannered stores in Ontario. It’s playing with new department layouts, presentation and pricing, and La Flèche said the results so far are good.
Despite the introduction of the FreshCo discount banner into Ontario by Sobeys, La Flèche said his company’s discount banner, Food Basics, is performing well, and it is reaching ethnic Canadians, especially new immigrants. He said the Metro-bannered stores are catering more to second generation Canadians.
In Quebec, the Super C discount banner now has 74 stores, up from about 60 two years ago. Most of the additions were converted older Metro stores that weren’t performing well. La Flèche said he expects to open more Super C stores in the next few years.
In terms of growth opportunities, La Flèche said he believes the company can see organic sales growth utilizing the loyalty card data, by tweaking its store formats, and continuing to focus on food and adding some more discount stores. He also sees an opportunity to sell food and other front-store items at the company’s Brunet drug store chain in Quebec.
La Flèche also didn’t rule out an acquisition down the road. “We’re patient. It took us seven years to buy A&P. We’ll see if something else comes up.”