Canadian grocery retailer Metro has reported a 6.5% increase in quarterly net earnings.

The company posted net earnings of C$37.6m (US$28.7m) for the first quarter to 20 December, compared to $35.3m a year earlier.

Sales increased 3% in the first quarter to $1.35bn, compared to $1.31bn in the same quarter last year. The food sector accounted for 2.6% of the overall increase in sales.

Metro said the sales increase was attributable to its ongoing retail network investment programme, merchandising strategies and to the acquisition, at the end of third quarter of last fiscal year, of grocery distributor Alexandre Gaudet.

Same-store sales slid 0.5% due in part to strong sales in the first quarter of 2003 resulting from special promotions that were not repeated in the first quarter of 2004, the company said.