Iceland upbeat as sales surge, despite sterling price pressure
It employs more than 20,200 people and is Wales’ biggest company. And now Iceland Foods, has just got even bigger – but warns that the depreciated pound was putting upward pressure on some food prices.
The business, which has its head office in Flintshire with stores across the UK as well as in the Republic of Ireland and the Czech Republic, said that total sales in its last financial year to the end of March, 2017, were £2.79bn, up 4.4% on the previous year.
And like-for-like sales, which don’t account for things like new store openings, rose 2% on the year.
Its net pre-tax profit was up from £66.7m to £72.8m.
Factors that boosted the firm’s performance on sales included:
It opened 28 new stores, including 24 larger stores under its Food Warehouse brand;
Net stores, after taking account of openings and closures, was 21, giving a total of 902;
It achieved further growth in online sales and was again voted the UK’s best online store;
It enjoyed particular success in frozen fish and seafood sales; and
Had a record Christmas trading period.
Chief executive Malcolm Walker said: “The set of strategic initiatives we began in 2015, with the aim of differentiating Iceland, changing consumer perceptions and so restoring growth to our business, bore fruit in the year under review.
“Like-for-like sales performance improved throughout the year to make us one of the UK’s fastest-growing food retailers by the year-end. We increased the pace and enhanced the quality of our new product development and opened a new £2m development kitchen at our head office in Deeside to drive further improvement.
“After a record Christmas, Iceland ended the financial year with its bestever product offer, strengthened management, high morale and growing confidence in our ability to achieve continued growth by simply being ourselves – a unique British business focused on innovative and exciting food, with a commitment to contributing to the communities in which we operate.”
During the year the business donated £3.3m to good causes through the Iceland Foods Charitable Trust.
Iceland said it has made a “solid start” to trading in its current financial year, with the first quarter to date benefiting from a late Easter.
It said it has also refitted five Iceland stores in its new format, in Greater London, north Wales and Northern Ireland. And it will roll the new concept out across the country as part of an ongoing programme of store refurbishment.
However, it said that fall in the value of pound since the Brexit vote last summer, has created inflationary pressures.
Mr Walker said: “The fall in the international value of sterling since the EU referendum last June has created upward pressure on some food prices, and on packaging and distribution costs, for us as for all other UK food retailers.
“Nevertheless, we are confident of our ability to meet our internal targets for EBITDA (earnings before interest, tax, depreciation and amortisation) and cash generation in the current year.
“Iceland continues to plan and invest for the long term.”