Iceland’s efforts to create ‘premium’ image for frozen food pay off

Iceland’s foray into specialty ranges and efforts to create a more premium image for frozen food appears to have paid off as sales continue to buck industry trend, according to the latest sales data.

The grocer kicked off a campaign earlier this year for its speciality fish and meat selection, which includes ostrich, crocodile and kangaroo meat products. The M&S Food-style adverts lauded the heritage of produce and ran with the tagline ‘you’ll be amazed what you can find at Iceland’.

This was later supported with the ‘Power of Frozen’ marketing push which sought to highlight how freezing preserves the authentic flavours, as demonstrated with wood fired pizza from the Dolomites, Atlantic prawns and Norwegian salmon

In a further push, it recently inked a deal with Great British Bake Off star Holly Bell to launch a cook book for frozen recipes as well as host a cookery series on YouTube.

Meanwhile, its Food Warehouse concept store – which launched earlier this year – has also aided sales. The ‘Food Warehouse’ acts as a large “frozen food outlet” at more than double the size of a standard Iceland store. It houses an extended category ranges and also offers the option to buy in bulk, making it attractive to those in the food trade

The shift in strategy has proved fruitful as sales increased 3.4 per cent for the 12 weeks ending 16 August 2015, according to Kantar Worldpanel. However, despite this rise in sales – it’s greatest in a year – market share remains flat at two per cent.

Fellow discounters Aldi and Lidl saw similar growth with the former’s sales accelerating to 18 per cent and the latter up 12.8 per cent.

As outlined in Kantar’s previous industry report, Waitrose's ‘Pick Your Own Offers’ promotion has continued to entice shoppers and helped to drive growth of 3.7 per cent.

However, the big four continue to battle it out to keep hold of their space in the market. Asda has retaken its position from Sainsbury’s as Britain’s second largest supermarket, despite a fall in sales of 2.5 per cent and a 0.6 percentage point fall in market share.

Despite the upturn, it is expected that Sainsbury’s – which saw its first marginal growth in sales since March of 0.1 per cent – will reclaim the number two spot towards Christmas.

Sales at Tesco fell by 0.9 per cent and the retailer now holds 28.3 per cent of the market.

Overall, there was an increase in sales of 0.9 per cent in the grocery market compared to one year ago leading Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, to say “sluggish growth” is new normal.

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