Walker claims victory in festive trading

Walker, who returned to the helm at Iceland last February after a three-year absence, has focused on "taking out all unnecessary costs from the business", by axeing the chain's loss-making internet and telephone home shopping service, closing 46 stores, making a third of its head office staff redundant and slashing the product range by 30%.

Christmas trading figures suggest his strategy has paid off, with a 16.1% surge in like-for-like sales in December, said Walker. "The recovery, which completely eluded the previous management ... is so well on track that we have become the fastest growing food retailer in the UK in terms of like-for-like sales," he added. "Our performance is based on a strategy of simplifying the business and refocusing on our traditional strengths as the UK's leading specialist retailer of innovative, value for money frozen food."

One Iceland supplier said: "There is a lot of goodwill towards Nigel Broadhurst [Iceland's buying director] and I think his common sense approach is going down well with suppliers, or at least the ones that he hasn't de-listed since the range was cut last year.

"I don't know what Iceland's bottom line is like, but even a small increase in turnover can deliver a significant increase in profits, and they certainly seem to be going great guns at the moment."

However, the new approach was very deal-driven, said one former supplier: "We don't supply Iceland anymore because they want stock for nothing. They want it permanently on deal and that's not sustainable for us."

The recent move to sell 28 high street stores to M&S was a sensible one, he added: "Businesses like Farmfoods have proved that a more downmarket freezer format can still work, it just has to be in the right locations.

"However, it's a bit disingenuous of Malcolm to say he's brought Iceland back from the brink. While the previous management was probably wrong to go down the convenience route, Malcolm's foray into organics before he left almost brought the company to its knees."

TNS Worldpanel director of research Edward Garner, said Iceland had a big resurgence, although it was not clear how profitable the growth was. He said: "Half of its turnover was generated by promotions in 2005. That's a lot of discounting."

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