Crawshaw's pre-tax losses rose to £1.2m in the 26 weeks to 30 July - up from £0.4m a year ago and including £0.4m of exceptional costs.
Group revenue rose by 2.3% to £22.1m but gross margins fell to 42.9% from 45.2%.
The group posted an underlying operating loss of £0.8m (2016: loss of £0.4m).
Chief executive Noel Collett said: 'These results demonstrate progress in ensuring we have high quality products at the lowest possible prices.
'The improvements to the breadth, depth and price of our ranges are driving the significantly improving trend in customer numbers, which is a key metric of loyalty and success in preparation for the important winter and festive season ahead.
'As part of our focus on achieving unbeatable value, we are prioritising and accelerating the rollout of our proven factory shop format.
'The economics of these sites are hugely attractive, and they allow us to offer a wider range of fresh meat and associated products at a price not possible in our high street shops.
'We remain excited by our 2Sisters supply agreement and believe this partnership will be transformational for the long-term growth of the Group.
'Market conditions remain challenging, but we are confident that our focus on value leaves us well placed for the long-term.'
At 8:10am: (LON:CRAW) Crawshaw Group PLC share price was -1p at 19.5p