Musgrave Group has reported sales of €4.8 billion (£4.3bn) for the year ending December 2008, while pre-tax profits fell by 20 per cent.

Sales rose by five per cent at constant exchange rates, which represented a one per cent fall at actual rates. Pre-tax profits fell to €75.5 million as the company invested in new stores and price reductions. Profits after tax fell by eight per cent to €65.1m.

Net debt reduced from €95.6m to €86.2m over the year, while sales by the group’s retail partners were up six per cent.

In 2008, retail sales in independent Budgens stores grew by 44.5 per cent to €630m, benefiting from the increase in the number of independent stores. Londis retailers achieved combined sales of €1.6bn.

Chris Martin, Musgrave Group chief executive, said: “Given the recession across all the markets in which we operate and the fact that the Irish grocery market is contracting, this is a satisfactory performance.

"Behind these sales we have been investing in lower prices for consumers and have been supporting our retail partners during these difficult times. Increased margin and cashflow support is helping them to compete and deliver lower prices, which has led to a 20 per cent reduction in our profit. This ongoing support is our commitment to ensuring that we and our retailers are able to compete in an extremely challenging market.

“In addition to lowering prices, our strategic focus has been on developing our brands to ensure that there is no compromise on the quality of the shopping experience. Consumers have responded well to this combination of exceptional quality and lower prices. We have invested more than €140m in price reductions on thousands of products across our Irish retail brands and we will continue to invest in price reductions this year.”

Martin added that the business is making progress in the UK. "Our UK retail brands SuperValu, Centra and Mace in Northern Ireland and Budgens and Londis in GB performed well in 2008, with more than 2,400 stores owned and operated by independent retailers," he said.

“Clearly, our business model is taking hold in the UK and is responding well to the changing needs of the consumer, who is hunting for choice and value in a local context.”

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