Musgrave, the group whose brands include Budgens, Londis and SuperValu, suffered a profits fall as the recession bit – particularly in its Republic of Ireland domestic market.

The company, which works in partnership with independent retailers that use its symbol fascias, said “increased margin and cash flow support” to its partners resulted in a 20 per cent fall in annual pre-tax profits to €75.5m (£67.9m).

Musgrave’s sales rose 5 per cent at constant exchange rate to €4.8bn (£4.32bn) in the year to December 31, 2008, but were down 1 per cent at actual rates. Sales by retail partners rose 6 per cent at constant rate and fell 0.6 per cent at actual rates.

Group chief executive Chris Martin described the performance as “satisfactory” in the light of recessionary conditions and the contraction of the Irish grocery market.

He said development investment had enabled Musgrave’s Irish brands to outperform the market and promised more price reductions on top of the €140m (£125.9m) cuts already delivered.

Martin said that “real progress” was being made in the UK. Sales by independent Budgens stores rose 44.5 per cent over the year to €630m (£566.5m).

He maintained: “I am confident that through developing different and better brands, driving efficiencies in our business and delivering value to  a price-focused consumer, Musgrave and our retail partners will continue to successfully adapt to the difficult market conditions.”