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“(Home) delivery economics are challenging, but we are making progress,” Metro chief executive Eric Le Fleche told analysts on a Wednesday conference call to discuss fourth-quarter results, which saw higher earnings and a slight rise in same-store sales.

Metro, with stores in Quebec and Ontario, now offers click and collect at seven of its stores in Quebec, as well as home grocery delivery in Montreal, Gatineau and Quebec City, covering 60 per cent of the province’s population. There is “clearly a customer preference for home delivery,” said the CEO.

Metro has said it expects to incur $45-$50 million in extra costs in 2018 from the minimum wage hike in Ontario, and in response La Fleche said the company hopes to improve productivity and will scale back hours at some stores.

“Some 24-hour stores will no longer be 24-hour stores,” he said. “We have to manage the hours the best we can without reducing customer service.”

The minimum wage is set to rise to $14 an hour on Jan. 1 from its current level of $11.60, with the increase to $15 coming in 2019.

In the meantime, Metro has felt the pain of Costco’s expansion. The popular warehouse club is on course to open seven stores in Canada in 2017.

“There is a big club format that has added a lot of square feet in the last 18 months,” La Fleche said. “That has an impact on the whole market.”