Iceland shifts marketing focus to emphasize 'excellent value' and private label products
Iceland supermarket prioritizes customer support over Christmas ads, cutting marketing spend to focus on promoting own label products and offering great value through aggressive pricing
In a move to emphasize value and own label offerings, Iceland is scaling back its marketing spend. The company recently released its financial accounts, stating that it has significantly cut down on marketing expenses. The focus now lies squarely on promoting the excellent value it provides, as well as its frozen food options and innovative products. This includes both products under the Iceland label and an expanding assortment of exclusive brands.
The full-year accounts for the 12 months ending in March 2023 were released shortly after Iceland's chairman, Richard Walker, stated on social media that it made perfect sense not to run a Christmas ad in 2023. Instead, Walker proposed that Iceland would allocate the funds intended for advertising towards supporting its customers in light of the current cost of living crisis.
Despite experiencing a 7.2% increase in sales, amounting to £3.8bn, the budget supermarket's losses grew to £17.1m, compared to £3.6m in 2022. This was partially due to a £93.3m rise in energy costs resulting from global price fluctuations.
Iceland celebrates its distinct position as a discount retailer, referring to itself as the 'different discounter,' which has given it a competitive edge amidst the current economic conditions and challenges faced by consumers.
In the 2023 fiscal year, Iceland's private label products represented 60% of sales in the frozen and chilled food categories. The company emphasized the added appeal of their offerings, which feature a significant portion of Iceland own label and exclusive brand lines that are not available elsewhere, as stated in their financial statement.
Aggressive pricing
Yesterday (16 November) the grocer doubled its £1 price lock scheme, adding an additional 500 products to the promotion.
In August of this year, our Website columnist and Passionbrand director, Helen Edwards, commended Iceland for their pricing strategy. She stated that the brand is highly competitive in pricing, as they have fixed the price of numerous products at £1. This bold move by the team reflects their awareness of the local food bank being a natural competitor. Iceland anticipates a significant increase in EBITDA for the current financial year due to the decrease in global energy prices.
We firmly believe that our sustainable and profitable long-term growth is built upon our strategic focus, family ownership and culture, resilient capital structure, strong cash generation, renowned brand, convenient accessibility, value heritage, emphasis on frozen food, and continuous leadership in product innovation.
