Iceland profits hit by Christmas supply chain snags

15 June 2018

Profits at frozen food retailer Iceland were affected by supply chain issues over the Christmas period.

In its end-of-year report the firm said its earnings in the 53 weeks to 30 March 2018 were down 1.8% to £157.7m, from £160m the year before. This is despite seeing sales increase 8% to £3.016bn.

Commenting on the results, Tarsem Dhaliwal, Iceland group managing director, said the drop was in part due to “problems in our supply chain infrastructure” in December. This created “poor overall availability in our key Christmas weeks, and inadequate supplies of some of our best-selling seasonal lines”.

Dhaliwal also attributed some of the drop to investments the firm had made in central costs, prices and marketing.

He said: “We took immediate action in January to change the management of our supply chain, in response to the infrastructure failure we experienced over Christmas, and this has since operated satisfactorily.”

Dhaliwal added that Iceland reopened its Deeside depot, which warehoused and distributed chilled food to stores in northwest England, Northern Ireland and the firm’s international business. “The depot is operating smoothly, providing additional capacity to support our established multi-temperature regional distribution centres,” he said.

He added the company was “developing our supply chain to support the growth of our retail estate”. The firm opened 30 additional stores last year, and plans to open another 21 in the coming year.

The report also highlighted previous commitments by Iceland to remove plastic packaging and palm oil from its own-brand lines.

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