CORRECTED (OFFICIAL)-WRAPUP 1-Loblaw, Metro profits fall as competition intensifies
(Deletes paragraph that quoted analyst Peter Sklar saying dividend increase traditionally took place in the fourth quarter after Sklar corrected his note on the issue)
By Solarina Ho
TORONTO Nov 13 (Reuters) - Two big Canadian grocers reported steep declines in quarterly profit on Wednesday in the face of escalating competition from the likes of Wal-Mart Stores Inc and Target Corp, a new entrant to the Canadian market.
Loblaw Cos Ltd, Canada's largest grocer, reported a 29 percent decline in profit for the September quarter and lowered its earnings outlook, while smaller rival Metro Inc reported a larger-than-expected 40 percent drop in profit.
"The outlook is still very competitive. People are chasing sales at considerable expense. And we have to be careful between chasing those sales, spending too much money and not getting any returns," Metro's chief executive, Eric La Fleche, said.
Stock of both grocers fell as much as 6 percent. Shares of rival Empire Co Ltd, which operates Sobeys stores, also fell, shedding more than 2.5 percent.
Sobeys cemented its position as Loblaw's closest rival earlier this year with a $5.7 billion deal for Safeway Inc's Canadian assets. Shortly after, Loblaw announced a C$12.4 billion ($11.82 billion) deal to buy Canada's largest pharmacy chain, Shoppers Drug Mart.
Shoppers reported slightly lower quarterly net income on Tuesday, due in part to charges from the pending acquisition.