Frozen food grocer Iceland became one of the many supermarkets heavily impacted by food deflation and reported a 25.7% fall in profit over the year ended 27 March 2015.
Iceland said its adjusted core earnings were down to £150.2m ($233m, €206.2m) after a "challenging year", in which food deflation played a key role for many UK supermarkets.
The supermarket's chairman and CEO Malcolm Walker said: "This has been an exceptionally challenging year for the Group, and for the UK food retailing industry as a whole. In the face of food price deflation, intense competition and significant change in consumers' shopping habits, Iceland has continued its long tradition of successful reinvention."
Iceland has invested £53.8m in refinancing the business and has spent the year launching new product ranges and updating its marketing strategy.
These investments influenced the reported profit hugely. The privately owned company reported a revenue decline of only 0.5%.
Iceland, the 10th biggest Supermarket in the UK, currently has 850 shops in the UK and was listed as one of the top 10 best big companies to work for.
The company announced that it had opened six new 'Food Warehouse' stores, which are double the size of normal Iceland shops. The Warehouse stores offer an extended range of frozen Iceland products.
All the stores are operating successfully and the concept is also providing a valuable test-bed for initiatives in ranging and store operation that can then be applied across our core estate.