Tariffs and counter tariffs are adding pressure to Metro Inc. ‘s costs, with 20 per cent of vendor price increase requests being tariff related, but the grocer says it is containing the impact by negotiating with suppliers and sourcing from other countries.

“We negotiate hard to minimize the impact on our consumers in this environment where everybody’s more price sensitive,” chief executive Eric La Flèche said on the company’s third-quarter earnings call, adding that the effect “remains manageable” and in line with the current food consumer price index (CPI) of three per cent.

He said Metro continues to work with vendors to keep costs down and maintain quality, even as some suppliers have begun imposing increases since Canada’s counter tariffs took effect in March.

“We search for other suppliers in other countries just to minimize prices and maintain quality,” he said. “So, we have been able to navigate and to provide value to our customers despite these tariffs.”

La Flèche also said the “ Buy Canadian ” trend is “decelerating,” with consumers still favouring local products but at a reduced pace.

Metro posted higher third-quarter profit than a year ago and steady sales growth, driven by gains in its pharmacy and discount food banners, but its results did not exceed analyst expectations.

Canada’s third-largest grocer had moderate year-over-year improvements across all metrics, including sales, net earnings and gross margin, during its third quarter.

RBC Capital Markets analysts said the results were “consistent with expectations and supportive of (Metro’s) hard-earned premium valuation.” They also said the sentiment around the company was “neutral,” indicating its third-quarter earnings did not surprise industry experts even though it posted better year-over-year results.

The grocer said total third-quarter sales were $6.87 billion, up 3.3 per cent from the same quarter a year ago, while net earnings were up nine per cent to $323 million. Operating income was $655.7 million, or 9.5 per cent of sales, up 5.7 per cent from last year.

Metro posted an increase in performance across both of its main segments: food and pharmacy. Same-store food sales were up 1.9 per cent from 2024, while online food sales jumped by 14.4 per cent.

Pharmacy sales rose 5.5 per cent, with a 6.2 per cent increase in prescription drug sales compared to a year ago. Front-store sales — over-the-counter products such as cosmetics — were up four per cent.

Total depreciation and amortization expenses for the third quarter were $184.9 million versus $174 million a year ago. Metro said the increase was due to investments made into its supply chain.

“The increase in depreciation and amortization expense is mainly due to the timing of retail investments and the commissioning of investments in our supply chain, including some automation technology in the pharmacy division and the final phase of our fresh distribution centre in Toronto last summer,” Metro said.

It also said a significant portion of Metro’s investments into its supply chains was “behind them” and that the company believes these investments will put them in a better position moving forward.

“The significant investments in the modernization of our supply chain are largely behind us, and we are now focused on realizing efficiency gains,” it said. “These investments position us well for growth through the expansion of our retail network in the years ahead.”

The company said it considers itself to be in a strong financial position.

“We do not anticipate any liquidity risk and consider our financial position at the end of the third quarter of 2025 as very solid. We had an unused authorized revolving credit facility of $594.6 million,” it said.

La Flèche said the company was pleased with its performance, pointing out it was marked by solid comparable sales growth in food and pharmacy, and good cost control.

“We successfully opened five new food stores in the quarter, a pace that will continue in the fourth quarter, on track with our plan to accelerate the development of our growing discount banners,” he said in the release.

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La Flèche also expressed confidence in the investments Metro has made into its supply chain, saying it will continue to fuel the company’s growth and “create long-term shareholder value.”