Iceland posts rising profits after successful revamp
Supermarket Iceland has posted rising full year profits after reaping the rewards of revamped product ranges and a new store format.
The retailer saw earnings rise 6.3% to £160 million in the year to March 24, with sales rising 4.4% to £2.8 billion and like for like sales increasing 2%.
Founder and executive chairman Malcolm Walker said the figures show that Iceland is now one of the country's fastest growing food retailers.
He 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."
The chain has embarked on a marketing campaign aiming to "change perceptions of Iceland and frozen food by underlining the many advantages freezing can offer", which appears to have paid off.
It opened a £2 million development kitchen at its Deeside head office last year, which has helped in the development of more luxury and speciality ranges.
The supermarket has also devised a new store format for its stores and expanded its Food Warehouse outlets, which combine a cash-and-carry format and the more traditional Iceland style.
The group opened 28 new stores last year, including 24 larger stores under the Food Warehouse fascia, leaving it with a total of 884 UK outlets.
Mr Walker said that trading in the new financial year is "solid", with like for like sales growth remaining positive.
However, Iceland also flagged the collapse in the value of the pound since the Brexit vote, which has ramped up the cost of imports and in turn shop prices.
"We continue to work with our suppliers to mitigate these pressures as far as we can, so as to minimise the impact on consumers, but the economic environment will clearly remain uncertain until we achieve clarity on the timing and nature of Brexit," the firm said.
The figures come during a period of flux in the supermarket sector, with Britain's so-called Big Four - Tesco, Asda, Sainsbury's and Morrisons - still losing ground to German duo Aldi and Lidl.
In addition, Tesco's proposed merger with Booker and Sainsbury's acquisition of Argos promise to shake up the sector further.