Iceland’s sales hit by triple whammy
Iceland’s like-for-like sales declined by 4.4% to £2.69bn for the 52 weeks to March 27.
Adjusted earnings before interest, taxes, depreciation, and amortization fell from £202.2M to £150.2M during an “exceptionally challenging” year, the retailer’s boss Malcolm Walker said.
Walker blamed the “cannibalisation” effect of opening 30 new stores over the past 12 months for the fall in profits.
New warehouse concept
Iceland also launched a new food warehouse store concept, with six larger stores opened under this portfolio. These are double the size of the retailer’s other stores and include its full food range as well as luxury and specialty food.
Iceland closed five stores and ended the year with 859 stores – 833 of which were in the UK. It plans to open a further 20 new stores in the year ahead.
Results in numbers
- £2.69bn sales
- £150.2M adjusted EBITDA
- 28 net new stores opened
- £1.3M raised for charitable causes
- Cash balances increased to £163.6M
Walker said: “This has been an exceptionally challenging year for the group, and for the UK food retailing industry as a whole. In the face of food price deflation, intense competition and significant change in consumers’ shopping habits, Iceland has continued its long tradition of successful reinvention.”
Iceland launched new product ranges, upgraded packaging and marketing and initiated a major productivity programme, Walker claimed.
Benefits
“The benefits began to become evident in a more encouraging underlying sales and profit performance towards the end of the year, which has put us in a stronger position to face the continuing competitive challenges in the year ahead,” he added.
Iceland also launched a free home delivery service for in-store purchases – subject to a minimum purchase of £25 – and an online free delivery service – subject to a minimum purchase of £35 – in the first half of the current financial year.
Concentrating on price no longer created an effective point of difference, Walker claimed.
“We have therefore changed our approach to re-emphasise the quality of our products, the uniqueness of Iceland’s innovation and the special advantages of frozen food,” he added.
