VIEW FROM THE TOP: Life in the Freezer - Iceland’s amazing turnaround has been fuelled by one man’s commitment and visionary zeal Maja Pawinska catches up with Malcolm Walker.

Iceland’s chairman has a twinkle in his eye. He’s explaining that the company he set up while moonlighting from his Woolworths traineeship 30 years ago really does believe in its environmentally-responsible initiatives.

Iceland’s chairman has a twinkle in his eye. He’s explaining that

the company he set up while moonlighting from his Woolworths traineeship

30 years ago really does believe in its environmentally-responsible


But he also believes in making a profit. The twinkle challenges you to

doubt either his convictions or his business sense.

In Malcolm Walker’s book, there’s no contradiction in being a caring

company - and shouting loudly about it - but only implementing policies

that also have a business benefit. ’We believe in what we do - but then

we exploit it. The senior management team has become evangelistic, but

ethics and commerciality are not incompatible,’ he says.

Take the latest headline-hitter from the retailer best known for its

frozen foods. ’Iceland makes Big Switch to Organic Veg’, screamed the

Guardian in June, when Iceland announced plans to make all its own-brand

frozen vegetable range organic at no extra cost to the consumer. At the

same time, it pledged pounds 1 million to the National Trust to invest

in environmentally-responsible farming.

The move managed to combine a human angle - Walker’s belief that people

shouldn’t have to compromise the quality of the food they eat because of

their pay packets - with a hard business edge.

The market for organics is growing exponentially, and Iceland’s own

research shows 77 per cent of consumers would buy more organic food if

it was the same price as non-organic food. For Iceland, committing to

organics makes sense for the balance sheet as well as its


The media was certainly impressed. The Express even devoted part of its

leader to the announcement; ’This company ... is showing it is possible

to invest in environmentally friendly options which give customers what

they want, while making a healthy profit to boot. We have to be thankful

there is one company with the foresight to take a gamble that will

benefit everyone.’

Iceland’s commitment to organics and GM-free foods also shows its

appreciation of the public’s shifting agenda when it comes to what it

eats. The issue has shifted from nutrition to food safety to the impact

on the environment and society of food production methods.

The launch of the organic initiative was also notable because it

underlined how seriously public relations is taken by Walker and his

team. The public relations function of Iceland was put on a serious

footing relatively recently, when Hilary Berg joined in May 1999 from

Liverpool PR consultancy Williams, Barber and Bird.

Walker says PR is a crucial tool for Iceland: ’The primary focus of the

business is to build a brand that customers trust, and a key element of

brand positioning is genuinely fighting for better food standards in

this country. An inherent weakness is trying to make this claim through

advertising. PR is much more appropriate for building trust.’

Berg’s appointment was the culmination of a long period of serious

reassessment of the business after its shares tumbled in October 1996 to

77p. This valued the company at only pounds 312 million and the City and

the media had written Iceland off as an idea that had had its day.

At that time, Iceland had around 700 small high street shops while other

food retailers were concentrating on massive out-of-town developments

selling thousands of food products and had also branched out into other

areas such as banking.

This was compounded with the cultural problem that frozen food -the

wonder format of the 1980s - had acquired an image of being for lazy


Iceland was an unloved brand, and in a harsh twist to the 1980s

advertising slogan, mum no longer wanted to go to Iceland.

Walker and his team fought back and tried to revitalise the business

during 1997 but there were no convincing answers to the main problems

facing the retailer. He had to look at the whole ethos of Iceland.

The first step was to go back to three questions: what business was

Iceland in, who were its customers, and who was the competition?

He says the conclusions were that Iceland was about meal provision, and

providing for normal family meals, not for dinner parties or


Its customers were still mums, but what it calls ’modern mums’ - anyone

responsible for providing their family with meals, regardless of gender,

class, age or race.

The competition was the superstores. Iceland never intended to attack

the big four head on but wanted to create an equally valid shopping


The perceived weakness in not being a chain of enormous out-of-town

warehouses could be turned into an advantage - Iceland was actually

showing commitment to the high street.

Walker embarked on a repositioning that was underpinned by three

corporate messages: that Iceland sells food you can trust, that it

offers more ways to shop (high street, home delivery from store and

telephone and internet shopping) and sells more than just frozen


The Food you can Trust strand is the one that has really led Iceland’s

PR activity over the past two years, with its bold banning of GM

ingredients and artificial colours and flavours in its own-brand food,

and in the commitment to organics.

The home delivery and shopping service has also been a central element

of its communications strategy, particularly over the past year or


Iceland was the first supermarket to set up a nation-wide home delivery

service and has embraced the possibilities of the internet by offering

the only nation-wide food home shopping service.

And it’s not all terribly serious stuff: Iceland likes to pervade

everything it does with a sense of fun which seems to uncannily match

the cheeky sense of humour of its chairman. The ’personality’ comes

across in signs on broken in-store cabinets which say ’this cabinet is

taking a breather - the one next door is looking after its food for it’

and exit signs say ’that was fantastic - same time next week!’.

This injection of personality is one of the aims of the PR team, led by

Berg. Up until her recruitment last spring, Iceland had relied on its

media-friendly chairman for positive press coverage, but Walker and the

board had by that time realised the need for a strategic approach to PR

to build the brand effectively.

Berg’s brief was to quickly build a professional and proactive team to

help construct a brand that consumers trust. Her job is to reinforce the

brand values; to reflect the position taken by the company on food; to

correct misconceptions; and promote Iceland’s ethical and environmental

approach to business. She now leads a team of eight, and the PR function

is extended to Iceland’s buying and technical specialists.

Like Walker, Berg has a personal interest in food, a strong commitment

to care for the environment and a belief in the responsibility of

supermarkets for the health of the public. As a result they both find it

easy to get excited about the things Iceland is doing.

In Berg’s first year milestones have included the development of a

product support plan for the Christmas range, which had to be completed

six weeks after her arrival. This was followed by the launch of internet

shopping and the annual report and results in September, and the new

’Wake Up Call’ advertising campaign in October.

This was the campaign where cartoons voiced by Richard Briers became

quite agitated in their efforts to get across the message that Iceland

sells more than frozen foods. The ads were refreshing in that they

treated the consumer as a dimwit who needed educating, rather than a


The main strength of the business in PR terms is its innovation and

dynamism: ’There’s simply no need to resort to puffery to gain coverage

- the hardest thing is keeping up such a hectic schedule.’

She believes the accessibility of the directors is another huge plus,

and even says: ’Most of my colleagues in retail PR would gladly swap

their chairman for Malcolm Walker. It’s good to work with someone so

down-to-earth and committed to what they believe in.’

As head of PR, Berg has a direct line to Walker and the managing

director, Russell Ford, and both are actively involved in the PR


But Walker fully admits that the way Iceland does business can present

PR challenges: ’By being seen as the consumers’ champion through our

actions on GM and additives, we are constantly targeted by pressure

groups which think that we will be willing and able to react to their

cause more quickly than the big four supermarkets.’

The company has a good relationship with many of the NGOs it deals with,

however, and Walker is a paid-up member of Greenpeace.

The results have been impressive - Iceland is a tired brand no more.

The chain has had year-on-year growth in like-for-like sales of ten per

cent for the past three years. The store had the best Christmas in its

history in 1999 with sales up 34 per cent on the previous year in the

week before Christmas. The company achieved pre-tax profits of pounds 65

million on turnover of pounds 1.9 billion, giving it operating margins

of four per cent - not bad for such a cut-throat industry.

Iceland has also carried out research which shows that 87 per cent of

its customers - and 48 per cent of non-customers - think the company is

taking a firm stand on food issues.

The media has also become more Iceland-friendly over the past two


From largely ignoring the company, the message that Iceland is cool and

consumer-friendly has slowly been getting across. ’The media can

identify with us more now,’ says Walker.

He admits that the chain still has a way to go in terms of its image,

however. ’We’re still perceived by some people as being downmarket, but

many of our customers are ABs and we are attracting a broader spread of


The share price has recovered, and at the end of July it stood at around

the 315p mark. Analysts have been confounded, and Warburgs recently

stated that: ’Iceland’s new found double digit sales growth and its

gearing into fashionable investment areas such as home shopping, the

internet and its stance against GM foods mean it deserves top billing

against Tesco and Asda.’

But Iceland’s latest business expansion plan - the acquisition of the

Booker cash and carry group in May - did dent the share price


’The Booker deal was not received well by the City, which felt there was

no obvious fit between the two businesses,’ says Walker.

The concern was mainly down to the fact that Iceland had entered a

period of steady growth, while Booker, which is known for the literary

prize, had been struggling for years. The Sunday Telegraph commented:

’Malcolm Walker has come up with a few crackpot schemes in his time. But

his proposal to marry his beloved Iceland supermarket chain to

Booker ... sent shock waves through the City.’

New Booker chief executive Stuart Rose is felt to be a safe pair of

hands, however, and Walker’s immediate priority is managing the change

as smoothly as possible - and he maintains that the move will prove to

be a good one for the company.

’We’re not trying to change Iceland into Booker, so there have been no

internal communications problems or worried staff. Customers won’t even

know we’ve done the deal, but behind the scenes it will be


’There are massive buying and cost savings on things like sharing

lorries. It gives Iceland strength and I can’t see any disadvantages. If

we hadn’t done the deal we would be trying to convince people that the

Iceland range was enough for home shopping. Booker has expanded our

product range.’

A more visible corporate shake-up is also under way - the rebranding of

all Iceland’s high street stores as This is an attempt to

get across the increasing importance of the internet to the business,

which now has 100,000 on-line customers.

The new fascias will be put in place over the next few months, and the

familiar logo designed by Terence Conran in the 1980s will be no


’It’s about showing we’re a ’clicks and mortar’ business,’ says


’It was suggested that we change the logo in 1996 but I refused. It may

be old fashioned but at the time we hadn’t changed the business


Over the past three years, with everything we’ve done, Iceland is good

news again and everyone loves us. Now it’s the right time to change the


It’s an interesting move, particularly as there appears to be something

of a backlash against the new media tags of and in

business in general, but Walker says the idea was thoroughly tested in

advance of being unveiled to the press.

’We put the new logo up as a trial on the staff shop at Deeside and we

wondered what would happen if we put after it. We did research to

justify this and the customers in all age groups liked it.’

He says the name of the holding company may one day change to spell out

to the City that only about half of what Iceland sells is frozen food,

but says: ’We will always be Iceland in the high street.’

Iceland has led the way in a number of areas, and this hasn’t won it too

many friends in the industry. ’I’ve never said anything bad about our

competitors but some of them are aggressive. This shows how seriously

they are taking us, but we’re not into tit-for-tat price battles.’

Berg adds that it is important to keep customers aware that Iceland is

competitive on price, but says there’s a danger that if all promotions

are centred on price, other elements of the message can be lost. ’PR is

about two-way communication, so we are concerned with quality, food

integrity and service, too.’

Walker says he has tried to turn his passion for natural food into

industry initiatives but these have not been a success so far.

’Before we launched the GM campaign I wrote to the CEOs of every food

retailer and asked them to join us. Half didn’t reply and the others


Berg adds: ’We run our business for our customers and not for the

benefit of the retail industry. Where retailers collude in the interest

of the industry is where we fall out with them. In that particular case,

competitors, industry bodies and government were unimpressed. But

customers and the media loved us.’

Despite this, there is little doubt that Iceland will continue to roll

out its ideas for making shopping easier and food better, and will

continue to surprise the City and the media.

One of the most recent shocks received by the City was when Walker

announced that he would be taking a step back in the day to day running

of the company next year. His new role will be non-executive director of

the Iceland group, and Booker’s Rose will take over as chief executive.

The share price dipped 13 per cent as soon as the move was


Whether 54-year old Walker will actually be able to keep his fingers out

of the frozen pie is another matter. He’s been referred to as another

Richard Branson because he is so publicity-aware, and one suspects that

he will find it as difficult as Branson to not be involved with every

detail of shaping Iceland in the future.

He has every confidence in his successor. Nevertheless the vague mumbles

about spending more time with family pale in comparison to his animated

passion for the business he created and has personally shaped for 30


Those predicted three days in the office may turn out to be something of

a red herring. A GM-free and organic herring, of course.


Hilary Berg’s 10-point plan for PR the Iceland way:

1. Base everything on substance, not hype.

2. Listen to consumers carefully. Capture public feeling.

3. Be controversial, radical and outspoken. And in doing so be prepared

be shot at.

4. Employ a team that takes it personally - people who are committed to

environmental and ethical issues and believe in what they’re doing.

5. Employ the best people, work hard and have enormous amounts of


6. Use PR as a strategic planning tool for the business.

7. Plan, plan, plan with military precision to capitalise on every


8. Be open and honest with the media, and always available.

9. Include other specialists in the PR team who appreciate the value of

PR, are media-friendly, and 100 per cent committed.

10. Don’t be complacent. Evaluate, interrogate and keep improving.


1946: Malcolm Walker born in Yorkshire

1963: Walker leaves school at 17 to join Woolworths as a trainee


1969: Walker becomes deputy manager of Woolworths in Wrexham

1970: Walker rents premises in Oswestry with partner Peter Hinchcliffe

and opens the first Iceland shop, selling loose frozen foods. Fired by

Woolworths three months later when sideline is discovered

1975: Iceland has a chain of 18 shops in North Wales

1977: Iceland opens store in Manchester where loose foods are replaced

by pre-packed frozen food.

1979: Company HQ moved from Rhyl to purpose-built site in Deeside

1981: Iceland sells a 16 per cent stake to the British Rail pension

Fund, providing pounds 1.6 million for investment. Range in its 42

stores expands to include chilled and grocery goods

1981: Own-label range launched

1983: Iceland acquires the St Catherine’s chain of freezer centres

1984: Iceland floats on the stock exchange and is oversubscribed by 113


1986: Takes over Orchard Frozen Foods

1989: Iceland takes over Bejam freezer food centre chain and trebles in


1998: Lunch of telephone home shopping service; Iceland first retail

food chain to ban GM ingredients from own-brand products

1999: First supermarket to offer nationwide internet shopping; all

artificial colours and flavours removed from own-brand products

2000: Iceland has 770 stores throughout UK and Republic of Ireland;

pledges pounds 1 million to National Trust’s environmentally-friendly

farming programme and announces it is to sell organic food at same price

as own-brand produce.

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