Profits dipped for the Musgrave Group in 2011 despite an increase in sales for the year. Sales for the group, which has stores in the UK, Republic of Ireland and Spain, increased by 1.6% to €4.5bn for the year to December 31, 2011 while profits dropped by 1% compared to the previous year.

The group’s debt also increased to €187m in 2011 from a net cash position of €21m in 2010 following the acquisition of Superquinn in Ireland.

Chief executive Chris Martin said the group had “made great progress”, especially in Great Britain. “We have been investing heavily in value by cutting the price on thousands of products while improving the quality and depth of range in our 2,000 Budgens and Londis stores,” he said. “Investment in brand development and innovation helped us to deliver on our recruitment targets with the number of Londis retailers increasing by more than 100 bringing the total to 1,879.”

Martin added that despite the bleak forecast for the next 12 months, he expects the Group’s brands to perform solidly, bolstered by the UK roll-out of the SuperValu own brand range.

“The outlook for the Group for 2012 remains challenging especially in Ireland where we expect to see little to no growth in the grocery market,” he said. “Nonetheless our brands are performing well with positive sales growth in both the Irish and British markets.

“For 2012 we are continuing to improve the quality and depth of the offer for shoppers with the introduction of the SuperValu Own Brand range in Ireland and the UK. Initial customer indications are good with a 15% increase in Own Brand sales. We are forecasting to achieve €1 billion in Own Brand sales across the Group by 2014.”