As part of its image revamp, Iceland is changing its product offering in an effort to win back market share from Lidl and Aldi, retailing woodfired pizza, a selection of soups, Dover sole, sea bass, ostrich and kangaroo steaks, scallops, lobster, and cheese soufflés.
While its online service is popular in the UK, Iceland suffered a decrease in customer spending during the 12 weeks to the end of February (Kantar). Over the 40 weeks to 1 January, its sales dropped by 2.7 per cent, resulting in a pre-tax-profit dip of 1 per cent to £107 million.
The Observer has described Iceland as "a discounter that is not riding the discounter trend."
Its CEO, Malcolm Walker, told the newspaper, "We have been fighting on price for many years. Everybody knows we are cheap. Now we are trying to convince you that our food is better than you think it is."
"Aldi and Lidl are having a big impact but the growth in their market share is not that big at all," he added, "but they have forced prices down because [rivals] want to be seen as comparable as much as they can.
"There’s food commodity deflation, the oil price is down and dairy prices are on the floor."
"In the past four years, 3,000 convenience stores have opened in Britain and then there’re the pound shops, Home Bargains and B&M. Five years ago, none of them sold food; now they all do. Everybody is eating away at market share. It is an oversupplied industry – and we have to compete with everybody on price."
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here
