Is it a commercial or custom made dress? Sounds like either it is older and the fabric is deteriorating or, if it is new, then there may be a flaw in the fabric. If it was custom made, you may be able to contact the dressmaker and see if a repair can be done. If it was a commercial maker, then I would definitely see about returning and exchanging it. It will probably continue to get worse as you continue to wear it.
I know if I had something like this happen to one of my clients, I would say wear the dress for the upcoming competition and then I would fix or replace it. No harm in asking for a solution such as that so you don't have to be without a dress. Hopefully you can get the issue resolved.