Record sales and profits help Iceland freeze recession

Jun 13 2009 by Iain Laing, The Journal

THE boss of retailer Iceland has hailed the chain’s “massively improved” staff morale as a key factor in record sales and profits figures.

Malcolm Walker told Retail Week magazine that the frozen food specialist had sidestepped the recession with a 16% rise in annual sales to £2.08bn and net profits of £113.7m, an increase of 84% on a year earlier.

He said: “Recession, what recession? We are not taking part. You can talk about our marketing, product and pricing strategy, but do not underestimate staff morale.”

Mr Walker has turned the business around after performance nose-dived under the stewardship of previous owner the Big Food Group. Iceland was co-founded by Mr Walker in Oswestry, Shropshire, in November 1970.

He said Iceland’s recent success was due to “great management” and the “massively increased morale” of its 20,000 staff in the four years since he returned.

Like-for-like sales jumped 16% in the year to March 27 and is up by double digits in the current financial year.

Mr Walker said Iceland was taking share “a little bit from everyone“ in a growing market, in which it commands just under 3%. He believed that customers were beginning to understand the benefits of frozen food, including the advantages of creating less waste.

The retailer has 723 stores and expects to open 20 shops this year on top of 51 former Woolworths outlets that will be reopened as Iceland.

It has emerged unscathed from the collapse in February of Icelandic investor Baugur, which had a 14% stake in the business.

Mr Walker told the magazine that Landsbanki – the nationalised Icelandic bank that now holds Baugur’s stake -– has no current plans to sell its holding.