‘Intense’ competition from rivals slows Iceland sales

Malcolm Walker, who was born in Grange Moor, West Yorkshire, posted a 1.1 per cent rise in annual like-for-like sales in a marked slowdown on the six per cent hike seen the previous year.

The group, which has 790 stores across the UK, saw underlying earnings edge up 0.6 per cent to £226.3m in the year to March 29.

Mr Walker also confirmed plans to roll out the launch of Iceland’s online delivery service within the next year following trials announced last month across 25 stores.

The move will see it return to online grocery sales, having been the first UK retailer to pioneer the concept as long ago as 1999 before pulling out amid trading woes eight years ago.

Iceland is stepping up its fightback against major rivals as it comes up against stiff competition from supermarket chains launching money-off coupons and promotional campaigns.

Last year it opened 33 new stores including five in Yorkshire and plans to launch another 40 over the following 12 months, including seven in Yorkshire. The new stores will add 2,000 jobs to its 25,000-strong workforce.

It saw sales fall in the first six months after losing out to the big players and as bosses were distracted by a £1.5bn management buyout last year.

Founder and chief executive Mr Walker regained control of Iceland from liquidators of failed Icelandic banks Landsbanki and Glitnir in a deal backed by a consortium of investors.

Sales picked up in the second half, but Iceland admitted demand for frozen beef products was impacted by the horse meat crisis.

The Food Safety Authority of Ireland (FSAI) said it found small traces of horse DNA in some Iceland quarter-pounders, which were withdrawn as a result, although the group’s own tests found no contamination in its own-brand products.

Iceland launched money-off coupons earlier this year to fend off supermarket competition and also attracted record numbers of customers to its loyalty card.

Mr Walker said: “The major multiples’ short-term promotional activity, through coupons, has continued to dominate the UK market place.

“Despite this intense competition, Iceland performed strongly by remaining committed to a round sum pricing policy which delivers great value everyday on all our own-label products, supported by unbeatable deals on brands.”