We look at the latest developments from Iceland. This includes a preview of its Christmas results and the latest initiatives it is launching in plastic and wholesale.
Disappointing Christmas sales
A report prepared for bondholders has been leaked to the Financial Times revealing Iceland saw its like-for-like sales fall by 1% in the six weeks leading up to January 4th. Total sales were +3.5% due to new store openings.
Discounters led the field over the Christmas trading period with Aldi at +10% growth (w/c 17th December) and Lidl at +8% (6 weeks to 30 December). This was driven by new store openings. Other retailers struggled with M&S at -1.2% and Sainsbury's at -0.4%. All retailers were challenged by the downturn in high street footfall. We consider this in more detail with our Christmas trading and new year outlook presentation for subscribers.
One of the key challenges we have identified for 2019 is meeting shoppers rising expectations. How retailers are impacting the environment is becoming increasingly important to shoppers. As Iceland has made huge head-way in this area managing director Richard Walker has said the results are not only disappointing, but also surprising.
Particularly given the interest the retailer generated by its controversial Christmas advert. The advert which promoted Iceland removing palm oil from its private label products failed to secure advertising regulatory approval and launched on YouTube instead. Since then it has had nearly six million views and generated huge publicity for the retailer. These messages may resonate further after the Christmas period as the green agenda is generally more important to shoppers at times of the year other than Christmas.
Packaging-free fruit and vegetables
We have seen Iceland continue its drive to be a responsible retailer through various initiatives, with 'healthier' layouts being tested and rewarding shoppers for recycling. As part of its commitment to becoming entirely plastic free by 2023 its latest initiative is launching packaging-free fruit and vegetables.
The retailer is trialling the concept in The Food Warehouse in Liverpool first. 35 items will be sold loosely and 27 in plastic-free packaging. This will include compostable punnets, paper bags and cellulose nets. These products will be sold at lower prices than those in plastic packaging.
Subscribers can find out more about what retailers are doing to reduce plastic usage in our UK action on plastic report.
Launching a new wholesale service
A trial of 'Iceland Trade', a new wholesale service for independent retailers and caterers has launched, according to trade publication RN.
The trial is UK-wide. Customers can order anything from Iceland's range, with free delivery for orders over £35. There is a maximum order of 12 cases of a product. Deliveries will come from Iceland stores or warehouses depending on volume.
Anthony Howard, Iceland's Business Development Manager has said;
"We are trying to bridge the gap between wholesaler and retailer."
The retailer has not stated its plans for how it sees the service developing in the future. Wholesale is a growing area of interest for retailers to tap into growth markets. We have recently seen Tesco's acquisition of Booker has given it access to the food service market and franchise convenience.
The Range nationwide roll-out
After its initial trial of three shop-in-shop concessions within The Range Iceland looks like it will be rolling this out nationwide, according to The Grocer. Its success so far has led to it having the potential to be rolled out to The Ranges 160 stores.
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