Iceland freezes expansion due to Brexit impact

Frozen food shop Iceland has paused further expansion in the Republic as the business embeds changes brought about by Brexit, according to its latest financial report.

The UK retailer operates 27 shops here. New accounts show that the business benefited from a return to home cooking during the Covid-19 lockdowns as revenues increased by 9 per cent to €66 million.

According to the accounts, filed by Iceland Stores Ireland Ltd for the 12 months to the end of March 26th this year, the company reduced its pretax losses by 27 per cent from €4.47 million to €3.25 million.

Consumer lifestyle

Under the heading of “future developments”, the report said the company was looking to embed the changes required post-Brexit over the coming year before expanding the business further.

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The accounts note that the year was a challenging one for the company, with meeting the  challenges of the Covid-19 pandemic “and seizing the opportunities created by the changes in consumer lifestyle and purchasing behaviour”.  Growth in the grocery market was driven by heightened consumer demand for home cooking rather than food to go or eating out.  “This structural shift reflected the increase in home cooking and reduced commuting, together with the loss of out of home eating opportunities for much of the year due to the series of Covid-19 national lockdowns and tiered restrictions, ” the accounts said.

Supply chain

Underscoring the positive impact on sales brought about by the Covid-19 pandemic, the report said that Iceland’s supply chain dealt successfully with the challenge posed by Covid-19 “during a surge in demand unprecedented outside the well-planned Christmas peak”.

The accounts also said that it incurred substantial Covid-related costs and the business’s exceptional cost of sales last year totalled €455,000.

The company’s adjusted earnings before interest, tax, depreciation and amortisation (ebitda) last year totalled €922,000 compared to a deficit of €1.2 million in the prior year , a positive swing of €2.1 million. Numbers employed remained at 438 as staff costs increased from €7.63 million to €7.84 million. Non-cash depreciation costs totalled €3.72 million.