Iceland offers home delivery from all stores

Iceland, the struggling frozen food retailer, yesterday announced the nationwide roll-out of its home delivery service in a move that will create 1,000 jobs. The service, which has been tested for a year, will be available in all Iceland's 770 outlets by the end of this month.

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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas