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Iceland says it’s well placed for online growth in the decade to come

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Iceland says it has a solid foundation for online growth over the next five to 10 years following the launch of its new ecommerce website. 

The website was launched in March and, says Iceland, it has already seen average order values and mobile sales rise following the introduction of new features including the ability to add to a basket without booking a delivery slot, to shop directly from search, and to pay using a range of options. In addition, it says, the mobile experience has been “significantly improved”, helping to retain the title of the UK’s fastest-growing online grocer.

This summer it will launch live order updates, with a 30 minute delivery window, via text. In a trial, it said, customer response had been “overwhelmingly positive” and had reduced customer enquiries to its contact centre. The retailer already picks from its Iceland stores to deliver online orders to the home. Now it has expanded that approach to its The Food Warehouse stores.

The update came as Iceland today reported a 4.5% rise in full-year sales to £3.1bn, and said that its online business was achieving “market-leading growth”.

Over the year to March 29, the supermarket said that earnings before interest, tax and asset writ downs had fallen by £13m to £140.1m. It said that fall was entirely seen in the first half of the year, while the second had proved more stable. 

Sales growth was driven by store openings – the retailer, ranked Top100 in IRUK Top500 research, opened a net 43 stores during the year. Its The Food Warehouse chain had 90 stores by the end of the year, up from 57 a year earlier. So far this year it has opened 14, seven each for Iceland and The Food Warehouse, and plans to open 50 in total over the full-year, while also refitting existing stores. In addition, it is now selling its food from nine stores owned by The Range. 

Over the last year the supermarket has become known for its commitment to sustainability. It has removed palm oil from its own-label food, and addressed the issue head on in its Rang-Tan animation that became, says Iceland, the most viewed Christmas commercial of all time. The supermarket was banned from using the advert on television over Christmas because it was deemed too political, but it gained high levels of attention online and went viral on social media, with more than 80m views. 

Iceland has also pledged to remove plastic from its own brand ranges by 2023. During 2018 alone, it said, it had removed 1,500 tonnes. 

Iceland chief executive Tarsem Dhaliwal said: “Within an intensely competitive UK marketplace, adversely affected by consumer uncertainty and the well-known pressures of changing shopping habits on the high street, we have continued to focus on investing for the future: expanding our store footprint, enhancing the appeal of our existing stores, growing our award-winning online business, continuing to roll out new and exciting food lines that are unique to Iceland, developing our supply chain to support the growth of our retail estate, and finding new channels to sell our food through The Range in the UK and a growing global franchise and export business.

“Our sustainability initiatives over the last year have substantially raised public awareness of Iceland and enhanced respect for our brand and its values, and we are confident that this can only enhance our prospects in the longer-term.”

The retailer has also built its business through an international and export-based approach. It now has 26 stores in Ireland, and seven in the Czech Republic. It exports Iceland own-label products to more than 40 countries, including to its own franchise stores in Europe, and has partnered with to sell them in China. 

It said that prolonged Brexit uncertainty had dampened consumer confidence but that it will confident it would trade successfully through any likes future scenario. 

Image courtesy of Iceland

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