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Technically speaking, it would be incorrect to call Old Montreal a food desert. Residents of the historic quarter tend to be better off than average, with the means to frequent the neighbourhood's countless restaurants. Yet the absence of a single supermarket makes buying groceries a chore here.

For the car-less, like me, it means trekking uphill on foot for a kilometre or two to the IGA, Provigo or Metro outlets on the eastern fringes of the downtown core. The ordeal has made me a comparison shopper despite myself, with Metro usually winning most of my food dollar.

Luckily for investors, picking a winner in Canada's supermarket wars does not require lugging groceries in reusable bags along Montreal's treacherously icy or potholed streets. For a quarter of a century now, Metro's stock has been making mincemeat out of shares in Loblaw or Sobeys parent Empire Co.

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Related: Why Canadians are paying more and more for groceries

Quite simply, Montreal-based Metro is Canada's best-run grocery chain. An analysis this year by the U.S. investment website Seeking Alpha ranked it second-best in North America after Kroger, which is a big deal considering the cutthroat competition in the U.S. grocery market.

How does Metro do it? Running a distant third in sales in the Canadian market, it doesn't have the buying power of Loblaw (which owns Provigo in Quebec) or Sobeys (which operates under the IGA banner here). What it does have are aisles and aisles of discipline.

For 17 years under former chief executive officer Pierre Lessard, and for eight years under current CEO Eric Richer La Flèche, Metro has racked up far higher operating margins than its peers, despite wielding less bargaining power with suppliers. It has also avoided the costly experiments that led Loblaw astray a decade ago and, unlike Sobeys, always refused to overpay for an acquisition.

A few years ago, Metro's legendary aversion to risk made it look stodgy. In 2013, when Sobeys outbid Metro for Canada Safeway and Loblaw bought Shoppers Drug Mart, many industry watchers thought that Metro risked becoming an also-ran because of its much smaller size and the concentration of its business in slow-growing Quebec and Ontario.

The pressure was on Mr. La Flèche to make an acquisition – any acquisition – just to show that Metro intended to stay in the game. A merger with B.C.'s Overwaitea Foods, similar to the $1.7-billion cash-and-stock deal for A&P Canada in 2005 that enabled Metro to become a contender in the Greater Toronto market? A takeover of Quebec-based Jean Coutu Group to increase Metro's drugstore count (it already owned the Brunet chain in Quebec) and beef up its food offerings to compete with Shoppers?

Acquisition speculation was stoked in early 2013, when Metro sold half of its shares in convenience store chain Alimentation Couche-Tard for almost $500-million. But besides taking a majority stake in Quebec bakery chain Première Moisson, Mr. La Flèche stayed on the sidelines.

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Losing out on Safeway turned out to be a blessing. Sobeys ran into big problems integrating the two chains, and entering the Alberta market on the eve of an oil crash will go down as one of the bigger blunders in Canadian retailing history. Sobeys has so far written off half of the $5.8-billion it paid for Safeway and parent company Empire just said adios to its CEO.

Still, Mr. La Flèche can't risk becoming complacent. Loblaw has its groove back under Galen Weston Jr. and, despite Target's disastrous foray north, foreign retailers continue to stake out the Canadian market. Analysts expect German discount chain Aldi to move in sooner or later.

Wal-Mart and Costco, meanwhile, may still account for a small share of grocery sales in Canada, but their ability to drive down prices squeezes margins across the sector. Ethnic supermarkets are also taking a bigger bite out of the big chains' business – a development Metro recognized in 2011 with its purchase of a majority stake in Marché Adonis, a nine-store Montreal chain specializing in Greek and Middle Eastern foodstuffs.

To stay on top, however, Metro may need to do more than tinker at the margins, especially as the grocery wars move increasingly online, where it has been slower than its competitors to boot up. Loblaw and Wal-Mart offer so-called click-and-collect grocery options in the Toronto market, where privately owned Longo's runs a full-service online grocer under the Grocery Gateway banner.

Mr. La Flèche may provide a hint on Metro's next move when the company releases its third-quarter results next week. Just don't expect him to bite off more than he, or Metro, can chew.

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