Budgens and Londis owner Musgrave Group has posted a 3% drop in full-year sales to €4.4bn (£3.92bn).

Sales were down due to the economic crisis in Ireland and a “very tough trading environment” in all of its markets, said Musgrave, which operates franchise stores in the UK, Ireland and Spain.

However, pre-tax profits rose 3% to €72m in the year to 31 December, while the group turned around net debt of €59m at the start of the year to net cash of €21m.

Musgrave did not provide separate sales figures for Budgens and Londis. But it said 200 retailers had joined Londis during the year, while it had also opened a new Budgens store every month.

“The rest of this year will be tough for the grocery market,” said group chief executive Chris Martin.

“However, we are confident that our brands are adapting well to the budget-conscious consumer, that our retail partners who own their stores are bringing a different and better offer to their local communities and that our brands continue to attract new retailers.”

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