But sales at the frozen food specialist were up 0.7% for the year according to BFG, as the chain shifted its focus to convenience.
BFG said it remains committed to takeover Londis as it concentrates on convenience and is awaiting further developments from the Londis board.
Overall growth at Iceland was put down to the effects of the refit programme driving the chain towards convenience retailing. Iceland announced an acceleration in the programme to six refits a week from April. BFG added that Andrew Clarke would join Iceland as managing director on April 28.
Tobacco sales rose 4.2% at BFG’s cash and carry unit Booker as a result of its Spend and Save scheme in January. Non-tobacco sales fell 1.2%.
The expansion of the Premier fascia continued with 91 new stores added during the quarter and 454 during the year bringing the total to 1455.
Chief executive Bill Grimsey said: “Faced with an increasingly competitive and fast-consolidating UK food retailing market, we are confident that we have put in place the right development strategies for the company.”
Net debt at the group rose to £251m from £238m in January.