MONTREAL - Grocery giant Metro Inc. (TSX:MRU.A) hopes to gain an advantage in an intensely competitive industry by mining the spending habit of its consumers to boost its sales.

The Montreal-based grocer has created a joint venture with Dunnhumby, a consulting and marketing services agency that has helped supermarket chains in the United States, Britain and France.

Metro chief executive Eric La Fleche said the goal is to become more relevant to customers through better merchandising and marketing.

"Once it gets going it really drives momentum, drives loyalty and can be successful," he said Wednesday during a conference call about fourth-quarter results.

Though specific details of Metro's program haven't been finalized, Dunnhumby uses sophisticated software to examine every purchase made by Metro customers who swipe a loyalty card, such as Air Miles.

The information is then dissected. It can be used to guide the chain to alter offerings and product placements to meet the needs of customers in specific stores. Customers can also be sent coupons or discounts on products they purchase or ones their spending patterns suggest they may like.

"We can actually look at what customers do, as opposed to what they tell you they do," Marc Sischli, chief operating officer of Dunnhumby Canada, said in an interview.

Given the company's track record in helping U.S. giant Kroger and Tesco of Britain to increase their sales, he believes the partnership could be game changer for Metro.

"Definitely it's a competitive edge for both of us."

Metro reported Wednesday a fourth quarter profit of $84.4 million or 77 cents per share for the period ended Sept. 26. That was up from year-ago profit of $72.5 million or 65 cents per share.

Revenues for the quarter totalled $2.53 billion, up from $2.47 billion last year. Metro said its same-store sales increased by two per cent during the quarter, helping to boost overall revenue.

Faced with very low inflation, supermarket retailers are offering low prices in a bid to lure consumers into their stores and increase revenues.

Joseph Agnese, an equity analyst for Standard & Poor's, said Dunnhumby's partnership with Kroger helped the retailer to better understand its customers' behaviour.

The New York-based analyst said data mining doesn't make a huge difference on its own, but gives companies an extra opportunity to increase sales in an intensely competitive business.

"Everybody's looking for any edge which they can get," he said.

La Fleche said there are no plans to switch from Air Miles in Ontario. A different loyalty card is being considered for Quebec, possibly its own brand.

The joint venture was announced as competition is heating up ahead of the Christmas shopping season, but Metro said it doesn't foresee the return of "irrational" pricing.

"We don't see an ugly, war-type environment," La Fleche told analysts.

Irene Nattel of RBC Capital Markets said Metro enjoyed a "strong end to a good year."

The fourth quarter results reflected productivity gains in Ontario, apparent modest market share gains in its core Quebec market and likely the last of the year's inflation benefits, she wrote in a report.

Metro, which has nearly completed the conversion of the A&P, Dominion and Loeb banners to the Metro name, also increased its dividends by 10 per cent to 13.75 cents per share.

Sales for fiscal 2009 came to $11.2 billion, marking a 4.4 per cent increase from last year.

Metro's shares closed at $36.90, up 80 cents, or 2.22 per cent on the Toronto Stock Exchange.

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