The share price, which stood at 240p at the beginning of the year, fell 30p to 28p.
'We face an increasingly competitive trading environment,' David Webster, deputy managing director, said.
Shoprite was a stock market darling when its brand of tough discounting won favour with shoppers in the Isle of Man and Scotland. Under the chairmanship of Deryck Nicholson, son of the founder of Kwik Save, the company launched an ambitious expansion programme, opening more than 50 stores since 1990. Fierce price competition this year from superstore chains such as Sainsbury, Tesco and Safeway put formidable pressure on margins.
Analysts complain that the intense pace of growth clouded managerial judgment, with marketing becoming 'sloppy', the distribution 'creaky' and the cost base out of control.
'The company has lost its ability to shock,' said Richard Andrews of Bell Lawrie White.
Mr Webster was unable to hold up much hope for the future, with superstores and large discounters such as Kwik Save and Aldi continuing to target the relatively undeveloped Scottish market.
He denied suggestions that Shoprite might sell its Scottish operations to another retailer.Reuse content