Hovis makes more than a quarter of the country's bread
Premier Foods has said that its Hovis brand's dominant 26% share of the UK bread market is under attack from competitors.
It said rival bread makers, including the brands Kingsmill and Warburtons, had stepped up promotional activity.
Premier said trading conditions were difficult, because of these "elevated" levels of competition.
The company's performance disappointed investors and its shares closed down 11.7%.
Premier is the UK's biggest food maker and its brands include some of the best-known in the country, including Mr Kipling, Branston, Oxo, Sharwoods and Quorn.
The firm said group sales overall had fallen by 5.1% in the first quarter.
But Premier said it would fight back hard and that it expected Hovis sales to start growing again in late 2010.