Iceland looks to c-store market
Sales dip across fourth quarter
Iceland is targeting the convenience market as its best opportunity for growth as it faces increasingly strong competition.
Iceland’s like-for-like sales are down by 0.2 per cent across the 14 weeks to April 2, which parent company Big Food Group said was due to increased competition, with some of the major supermarkets having launched aggressive price cuts across the period, as well as temporary disruption as stores are reorganised to improve customer service.
Big Food, which also owns the Booker cash-and-carry and wholesale business and is a potential bidder for the Londis business, has been vocal in its opposition to the growing presence of players such as Tesco and Sainsbury’s in the c-store market through a series of acquisitions. Big Food chief executive Bill Grimsey is calling on the regulatory authorities to view the UK grocery market as a single entity rather than consider supermarkets and c-stores separately.
Big Food said that “having correctly identified the changing habits of consumers within this single market the company continues to develop its strategy of establishing a strong position in the growing convenience store segment through its own operations and those of its independent retail customers.”
Across the year to April 2, Iceland like-for-likes are up 0.7 per cent. Iceland stores which have been refitted to reflect this convenience retailing stance are still showing stronger sales, with 142 stores now trading in the new format. The refit programme is being accelerated from three stores a week to six.
Like-for-like sales at Booker grew by 1.2 per cent across both the year and the fourth quarter.
The business continued to expand its Premier fascia, a badged grocery offer for independent retailers, with 1455 Premier retailers now operating and like-for-like sales to this market up by 8.5 per cent.
[img r]londisexpress.jpg[/img]Big Food said it “continues to believe that its strategic expansion into convenience store retailing would be greatly enhanced by the opportunity which Londis represents” and is awaiting developments from the sale process initiated by the Londis board.
The company said it expects competition in the grocery market to ‘increase in intensity’ during the year ahead. Grimsey said: “Faced with an increasingly competitive and fast-consolidating UK food retailing market, we are confident that we have put in place the right development strategies for the company.
“With the acceleration of the Iceland refit programme next year and the maintenance of a tight control over margins and costs, we can compete in tomorrow’s world.”
