Chief executive Chris Martin said the fall in profit was due to the group investing in better prices for consumers and supporting its retail partners. "Increased margin and cashflow support is helping retailers compete and deliver lower prices, which has led to a 20% reduction in our profit," he said.
He described the group's performance as "satisfactory given the recession across all the markets in which we operate".
Sales in Musgrave's UK retail arm Budgens grew by 44.5% to £566.5m. This rise was attributed to the increase in the number of stores under the banner.
"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 both choice and value in a local context," added Martin. "We see further growth in this market."