Iceland looks to new format for recovery
Like-for-likes hit by impact of promotions
July 10 2002
Iceland is blaming a 5.8 per cent fall in its quarterly profits on the impact of heavy price promotions last year.
The frozen food retailer is determined to move away from a discount-led offer.
Owner Big Food Group said sales at its four new format stores were up by 17.8 per cent. The new stores refocus the Iceland offer on a more sustainable mix of qualty and value rather than deep discounts. The format is being extended across the group through refurbishment and new openings, as part of a three year recovery plan.
In common with other food retailers, Iceland found that this year’s early Easter also had a negative impact on like-for-likes, with the sales drop down to 3.5 per cent when this is taken into account.
Big Food chief executive Bill Grimsey said the current store format was still holding back performance.
“Until we get to implement our strategic plan, we are going to continue to see short-term sales volatility of this nature because the majority of Iceland’s stores are not suited to our customers.”
