Iceland profits flat in 'challenging' UK grocery market
Supermarket Iceland has turned in flat annual profits and labelled the UK grocery market as "extremely challenging".
The frozen food chain saw full-year earnings inch up 0.2% to £150.5 million in the 12 months to March 26 compared to a year ago, lifted by stronger margins and tighter cost control.
The business saw its like-for-like sales fall 2.7% over the year, an improvement on the 4.4% decline in the prior year as the industry continues its fierce price war sparked by competition from discounters Aldi and Lidl.
Iceland said: "The UK food retail market remained exceptionally challenging throughout the year, due to the combination of intense competition, food price deflation and changing consumer shopping patterns."
It also said it has been affected by decline in high street footfall, and a fall in smaller basket sales due to a wide range of outlets selling top-up groceries at discounted prices.
Iceland runs 864 stores, and according to respected research group Kantar Worldpanel has a 2.1% share of the UK grocery market.
The group said last year it opened 16 shops in the UK, including six larger new Food Warehouse format stores - which combine a cash-and-carry format and the traditional Iceland style. The group also closed 11 stores in the period.
Over the coming year, the group said it has already opened four new Food Warehouse stores, and plans to open a total of 25 new stores in this financial year.
It added that it plans to refurbish its traditional Iceland stores, but "will only open additional new Iceland stores in exceptionally strong trading locations".
Chairman and chief executive Malcolm Walker said the group had made "good progress", adding that its Power of Frozen marketing campaign has helped "improve public perceptions of frozen food".
The retailer said over the last year it had expanded its frozen fish and seafood ranges beyond the traditional British staples of cod and haddock to include lines such as sea bass, scallops, lobsters, Dover sole, red mullet, monkfish and red snapper.