Iceland offers home delivery from all stores
Wednesday 03 September 1997
Malcolm Walker, chairman, said home delivery would attract new shoppers, expand its demographic target market and increase the average spend in its shops: "We'll see no benefit from this for a year and it will be a long haul. But we are doing something unique. There are massive costs but it is getting massive take-up. The customers love it."
The comments came as Iceland announced an 18 per cent fall in pre-exceptional half-year profits to pounds 24.5m. The company could not explain how its results came to appear in one national newspaper a day ahead of schedule. The Stock Exchange expressed some concern but said there had been no breach of its rules.
Iceland's home delivery service is free to customers though they must hold the company's Privilege loyalty card and spend a minimum of pounds 25. The drawback is that customers must visit the store to make their purchases and must live within a 10-mile radius (or three miles within the M25).
Deliveries are made during normal trading hours within two-hour time slots.
Mr Walker said the service would be attractive to its core market which is the 60 per cent of British housewives who do not have access to a car from Monday to Friday. Half its stores do not have car parks.
Iceland has spent pounds 12m developing the system. It has bought 850 refrigerated vans and will employ an extra 1,000 staff. It is testing a telephone ordering system in one area using a call centre at its head office in Deeside in north Wales.
Though Mr Walker claimed the launch was a unique system that was ahead of rivals, it was criticised by analysts. David McCarthy, food retail analyst at BZW, said: "I don't think it will work. It is too expensive to run and too easily copied."
Somerfield is testing a similar home delivery system with telephone ordering. Others such as Tesco and Sainsbury's are well advanced with Internet ordering and call-and-collect systems, where customers order by phone or fax then visit the store to collect their shopping.
Another analyst said: "They had to come up with a new idea but you still wonder where the growth is going to come from. I don't believe it will win new shoppers to the chain."
In the six months to 28 June Iceland improved its sales by 4.4 per cent to pounds 711m. Like-for-like sales rose by 1.1 per cent during the period and are up by 2 per cent in current trading.
The company said it expected home delivery to increase sales by a level sufficient to cover its costs. This would mean a like-for-like uplift of around 3 to 4 per cent.
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Renee Zellweger on plastic surgery rumours: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Eleven members of same family hospitalised after eating deadly pufferfish
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Phone-hacking: The Piers Morgan connection - Mirror admits some stories during Morgan's tenure may have been obtained by illegal means
Russell Brand says he will 'probably' give up acting to focus on his revolution
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
Poppy Appeal 2014: This is why I won't be wearing a red poppy this year
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...