Shadow competition occurs in a group of sit‐and‐wait predators when those closer to a source of mobile prey reduce the feeding success of those further from the prey source. It was examined in territorial juvenile sea troutSalmo truttain a small stream. The fry formed groups of two to six fish with adjacent territories and a social hierarchy within each group. It was hypothesized that: (i) as group size increased, the mean number of prey eaten per fish within a group decreased and the variability in prey consumption between fish increased; (ii) prey consumption by individual fish decreased with increasing distance from the food source; (iii) group size increased as the mean water velocity immediately upstream from a group, and hence potential drifting food, increased. Five groups of fry were fed on small shrimps released upstream from each group at a rate of one every 15 s over a 10 min period, this procedure being repeated over 5 days to provide five replicates per group. Experiments were performed three times in 1967, 1969 and 1974 to provide information on 45 groups of fry. The first and third hypotheses were supported, but the second was only partially supported. In 1967 and 1969, territory size and shrimp consumption by individual fry decreased with increasing distance from the food source. This also occurred in 1974, except during a critical period for survival when fry density was exceptionally high with large numbers of sea trout lacking territories. This resulted in sea trout fry with the largest territories eating fewer shrimps than those with medium‐sized territories because they spent more time defending their territories against sea trout lacking territories. This study is the first to demonstrate shadow competition in a vertebrate species, but has also shown that territorial defence may modify the consequences of shadow competition when densities are high and there is strong competition for the acquisition of a territory.