MONTREAL — Better store operations leading to improved margins helped Metro Inc. increase sales and earnings despite deflation and heavy price competition during its fiscal first quarter, the retailer here said Tuesday.

Officials said customer counts were up but basket sizes decreased during the quarter that ended Dec. 13, due mainly to deflation of around 1% overall. Same-store sales were flat, while EBITDA increased by 7%.

“We didn’t increase pricing, we’re as competitive as ever,” Eric LaFleche, chief executive officer, said during a conference call discussing results. “The improvement comes from better store operations — lower shrink, more private label penetration.”

Net earnings totaled $92.2 million (U.S.), an increase of 21% (or 5.5% when adjusted for one-time expenses). Sales of $2.5 billion were up by 1.7% overall.

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