Iceland returns to profit after cost-cutting drive

Iceland Foods, the Deeside-based supermarket group, has returned to profit, following a year of cost-cutting.

Turnover for the year to March 29, 2024, rose from £3.720bn last year to £4.118bn.

A pre-tax profit of £15.6m showed a turnround from the previous year’s pre-tax loss of £16.2m.

The group’s headcount, during the reporting period, fell, from 27,447 to 26,352 due to the closure of non-profitable stores and the consolidation of stores providing van delivery services.

Directors’ emoluments rose from £7.3m to £7.6m, although the highest paid director’s level remained at £3.8m.

No shareholders’ dividend was recommended. 

The directors’ report said: “Investments in our customer proposition during Q3 delivered industry-leading volume sales growth in Q4, establishing a momentum which continues into with strong like-for-like sales progress in FY25 to date.

“We were able to offset the substantial inflationary pressures on the business through extensive cost-saving initiatives across our stores, digital operation and end to end supply chain.”

The business was affected by rising energy costs in the wake of Russia’s invasion of Ukraine, leading to it slashing its marketing budget, and cancelling its Christmas advert.

Executive director, Richard Walker, pledged that funds would be reinvested into lowering prices for customers exposed to the cost of living crisis.

Iceland’s total portfolio of stores was reduced by 29 stores, to 968.

The retailer added more than 1,000 new own-label products during the year, most into its £1 or Less value range, which was the key driver of sales growth.

In April, Iceland opened its 500,000 sq ft distribution centre in Warrington in a bid to improve its supply chain.

When fully operational next year it will service 350 Iceland and Food Warehouse stores.