No-Moat Grocer Metro Has Catching Up To Do for Its Private Label, Loyalty Program

As the smallest of the three pure-play food retailers in Canada, Metro has done a commendable job fending off competition in its core Ontario and Quebec markets with prudent merchandising strategies and strong execution. However, similar to larger rival no-moat Loblaw, we think ferocious price competition in the commoditized grocery market has prevented Metro from amassing any intangible assets or cost advantage to warrant an economic moat rating.