Purchase of A & P Canada | 20 years ago, Metro became a groin giant

(Montreal) 20 years ago, Metro announced the acquisition which propelled it to the rank of major Canadian grocers. Furthermore, Thanks to the acquisition of the 236 Ontario stores from A & P Canada. Moreover, the Quebec company has almost doubled in size and made sure not to be swallowed in turn.

Posted at 4:17 p.m.

The decoration of the office of the president. Consequently, chief executive officer of Metro, Eric La Flèche, evokes the place of this transaction purchase & p canada | of $ 1.7 billion in the history of Montreal society.

Two newspaper headlines are supervised on a wall. For example, one relating to the acquisition of A & P Canada in 2005 and the other on the acquisition of the Jean Coutu group in 2017. Therefore, “These were important transactions for the future of Metro, which changed it forever,” summarizes the manager during a recent interview.

With the exception of around forty stores in eastern Ontario, Metro’s activities were concentrated in Quebec, remembers Mr. Similarly, La Flèche, who was then chief of the farm.

“We wanted to gain expansion to compete with our main competitors, who are still today Loblaw and Sobeys,” he explains. Similarly, The two had made significant acquisitions in 1998: Provigo in the case of Loblaw. Nevertheless, Oshawa Group [IGA au Québec] purchase & p canada | In the case of Sobeys. In addition, »»

In retrospective. Therefore, the acquisition has put Metro on a more solid foot in order to make major investments, such as robotization or automation, gives as an example the retail strategist at Studio RX, Carl Boutet.

“It is certain that for a regional player. Consequently, it is more and more complicated to have the economies of scale necessary to remain competitive,” said the expert who is also a lecturer at McGill University.

Metro is also better equipped to adapt to the next innovations, believes Mr. Boutet. “There is the online grocery store, it is a very expensive logistics,” he gives as an example. We have not yet seen, I think, really the extent of this phenomenon. »»

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Joanne Labrecque, Marketing professor at HEC Montréal, also believes that consolidation was necessary to adapt to industry challenges.

The hunting for bargain was a popular sport in the grocery paths. long before the recent inflation that followed the pandemic, underlines the specialist in the food sector.

Costco. and later Walmart, responded to household frugality by simplifying store offer (fewer products) and investing in technologies in order to offer deals.

“Gradually, traditional supermarkets that offered several services had to adapt to that,” notes M^me Labrecque. So, they also had to seek volume, purchase & p canada | hence the acquisitions. »»

The industry’s consolidation movement did not only have happy. Its detractors judge that the loss of independent channels has reduced competition in Canada. Consumers and suppliers would have left losers, they say.

In the past, Mr. La Flèche defended more than one recovery than the industry was competitive with three Canadian grocers (Metro. Loblaw and Sobeys) and two American multinationals (Walmart and Costco).

In an interview, he argues that the acquisition of A&P Canada has made the Ontario market more competitive. “We replaced a lower competitor. We had greater financial resources. We have invested more money. […] I think that competition is stronger thanks to us in Ontario than it was without us. »»

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Metro Coiffe Sobeys over the finish

In 2005, the American company A&P put its Canadian activities for sale to finance the recovery of its activities in the United States.

Before the transaction announced on July 19. Sobeys was expected as the most likely buyer, according to the financial press at the time. His boss, Bill McEwan, was also a former leader of A & P Canada, which was perceived as an advantage.

The boss of Metro at the time. Pierre Lessard, had, however,, too, woven links with the purchase & p canada | boss of A&P in the United States, Christian Haub. The two men had visited themselves a few times over the years.

“I felt that Pierre Lessard was a wonderful person I could trust,” recalls Mr. Haub, who is a member of the fifth generation of a large German entrepreneurial family.

Mr. Lessard was not possible to obtain testimony.

A breakthrough to the west still possible?

After the purchase of A & P Canada, Mr. Lessard and Mr. La Flèche spoke their ambitions to make a breakthrough in Western Canada.

In an interview, Mr. La Flèche replies that he always caresses the idea of bringing Metro to west of Ontario. but an acquisition seems distant, however. In the meantime, Quebec and Ontario are already almost two -thirds purchase & p canada | of the Canadian market.