Iceland (supermarket)
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Iceland is a supermarket chain in the United Kingdom, owned by the Icelandic company Baugur. Iceland's primary product lines include frozen foods such as frozen prepared meals and frozen vegetables.
Origins
Iceland's beginnings date to November 1970. Malcolm Walker opened the first store in Oswestry, Shropshire with his business partner Peter Hinchliffe, investing £30 each. They were both still employees of Woolworths at the time, and were sacked once their employer discovered their job on the side. Iceland initially specialised in loose frozen food.By 1975, there were 15+ Iceland outlets in North Wales, with the first supermarket-style outlet opening in Manchester a couple of years later. The firm's head office moved to Deeside, Flintshire in 1979. Iceland was floated on the London Stock Exchange in 1984, by which stage it had 81 outlets.
By 8 January 2004, the chain had 760 stores throughout the British Isles.
Diversification
Finding the retail market more hostile in the late 90's, Iceland pursued avenues for differentiation. In 1998, the firm began to focus on providing organic food and Genetically modified-free food. This policy saw the company convert its entire frozen vegetable range to organic in 2000. Organic food sales did not perform well among Iceland's traditional customers.In 1999, Iceland launched what it claimed to be the first nationwide, free, online grocery shopping service. This tied in with the rebranding of all outlets under the Iceland.co.uk. [link] However, it appears that the rebranding exercise was quietly abandoned at some stage in the early 2000s, as the unadorned Iceland name is once more used for this purpose.
Iceland's product range includes consumer durables such as fridges that are sold only in the larger branches.
Takeovers
The company had already completed two medium-sized takeovers before attempting to buy rival firm Bejam in 1989. Bejam was a larger company and the hostile takeover took three months to conclude before Iceland achieved the backing of enough shareholders by a narrow margin.The next major acquisition was to be Booker, in 2000, after withdrawing from a bid for Bhs. As part of this deal, Booker's chief, Stuart Rose, was to take over the day-to-day running of Iceland, with Walker becoming a non-executive chairman. However, Rose ended up leaving Booker a few months later, and the integration of the two firms was to be a difficult process.
A steep slide in sales followed, with Walker receiving intense criticism for selling shares in the company five weeks prior to the announcement of a profit warning. He resigned in January 2001, along with other senior executives to follow.
The company was renamed to The Big Food Group in 2002. Sales continued to drop, and market share was lost to other supermarkets.
Recent developments
Following several more years of declining sales, The Big Food Group was bought by Icelandic firm Baugur in February 2005. Malcolm Walker was installed as chief executive again, having been cleared of insider dealing in 2004, following an investigation by the Serious Fraud Office.The seven stores in the Republic of Ireland were closed in 2005, with the loss of 160 jobs.
Marketing
The supermarket historically advertised with the slogan That's why mum's gone to Iceland, which was changed to Because mums are heroes for a time. It has returned to using its famous original slogan in its current series of adverts featuring former Atomic Kitten and reality television personality Kerry Katona. The company spent nearly £5 million on advertising at Christmas 2005 to help bring the company back into profit.When the chain bough rival Bejam in 1989, they launched the TV-advertising campaign "Use Our Imagination," which included a powerful song. The campaign was launched so quickly after the takeover that they hadn't time to convert all Bejam stores to the "Iceland" fascia. Because of this in the song for the commercial the singer proclaims "We're at Bejam's too..".
External links
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