Profits freeze at Iceland amid tough retail environment

Food retailer Iceland has seen its annual profits remain frozen but said it is still operating in an 'extremely challenging UK marketplace'.

Iceland flagged tough conditions in the grocery market. Picture: Contributed

The firm achieved core profits of £150.5 million in the year to 26 March, compared with £150.2m for the prior 12-month period.

Sales dipped to £2.68 billion, from £2.7bn a year earlier, with like-for-like sales down 2.7 per cent – although this marked an improvement on the 4.4 per cent decline in the previous year as the industry continues its fierce price war sparked by competition from discounters Aldi and Lidl.

Chairman and chief executive Malcolm Walker said: “We have achieved good progress with a range of strategic initiatives designed to differentiate our business, and stabilise our financial performance, in what remains an extremely challenging UK marketplace.”

The firm also said it has been affected by decline in high street footfall, and a fall in smaller basket sales due to a wide range of outlets selling top-up groceries at discounted prices.

Iceland runs 864 stores, and according to research group Kantar Worldpanel has a 2.1 per cent share of the UK grocery market.