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
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
A more visible corporate shake-up is also under way - the rebranding of
all Iceland’s high street stores as iceland.co.uk. 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 dot.com and .co.uk 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 .co.uk 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.
ICELAND’S RECIPE FOR PR SUCCESS
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.
A CHILLING TALE: THE HISTORY OF ICELAND
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.