Iceland Verdict Company Briefing

In 2011, Iceland's founder and CEO led a management buyout of the retailer after Landsbanki put its 67% stake up for sale. Now the buyout is complete, management time can be dedicated to expansion of the business over the coming years. But expansion should not be the retailer's number one priority, it must work to retain the shoppers it gained since the downturn in order to post future growth.

• Benchmark your performance in food & grocery with detailed key performance indicators across sales and space data for Iceland
• Plan your expansion strategy by understanding how and where Iceland has increased its store portfolio, and the impact this has had on densities
• Discover how Iceland has increased its visitor share with detailed consumer data, and assess the impact this has had on market share and sector sales

Malcolm Walker, the founder and CEO of Iceland regained control of the retailer in March 2012 following months of speculation over the retailer's future and a lengthily bidding process. Mr Walker led a buyout by his management team – who already owned 23.0% of the retailer and who together now hold 43.0% of the shares.

In a turbulent year, Iceland recorded its seventh consecutive year of sales growth in 2011/12, with revenues increasing 9.4% to £2,552.8m. Since Malcolm Walker returned to the retailer in 2005, sales have increased 77.4%, and the retailer has turned around from a £63.4m loss for 2004/05, to an operating profit of £170.2m.

While Iceland has only seen a slight rise in main user share between 2007 and 2011 – just one percentage point – its visitor share increased 6.4 percentage points in 2008 at the beginning of the downturn, and has remained at its elevated level for four consecutive years.

• How will Iceland's food & grocery sales grow in 2013, and what impact will this have on market share
• What are Iceland's plans for expansion over the coming years, and how will this contribute to sales growth
• What does Iceland need to do in order to retain the customers it has stolen from rivals since 2008

Table of contents

OVERVIEW
•Introduction
•Summary
Market share remains steady as Iceland battles against rivals;
Frozen food focus reaps rewards;
Seventh consecutive year of growth as profits reach record level;
Space expansion continues as high street failures aid openings;
Management needs to focus on customer retention after ownership resolution;
Must not lose momentum as it returns online.
ICELAND
•Management needs to focus on customer retention as ownership battle is resolved
•Recent key events
Another year of growth as buyout is completed
•Proposition & customer penetration
Penetration deepest among DEs
•Financials
Seventh consecutive year of growth as profits reach record level
•Space
Space expansion continues as high street failures aid openings
•Sector performance – food & grocery
Frozen food focus reaps rewards
Space allocation
Market shares
Market share steady as Iceland battles rivals
•Outlook
Must not lose momentum after another impressive year
METHODOLOGY
•Verdict company briefing
•Financial information
Market size calculation
Sales density calculation
•Further reading
•Ask the analyst
•Disclaimer
TABLES
•Table: Iceland company information 2012
•Table: Iceland retail proposition 2012
•Table: Iceland key operating statistics 2008–13e
•Table: Iceland trading record 2003–13e
•Table: Iceland UK store profile 2003–13e
•Table: Iceland space allocation 2010-12
•Table: Iceland space allocation 2010-12 continued
FIGURES
•Figure: Iceland fascia 2012
•Figure: Visitor share by demographic group 2012
•Figure: Iceland main user and visitor share 2007–11
•Figure: Iceland UK sales and y-o-y change to March 2008–13e
•Figure: Iceland UK operating profit to March 2007–12
•Figure: Iceland l-f-l, total sales and space growth 2007–12
•Figure: Iceland food & grocery sales for calendar years incl VAT 2008e–13e
•Figure: Iceland food & grocery sales per sq ft for calendar years incl VAT 2008e–13e
•Figure: Iceland space allocation changes 2010–12
•Figure: Iceland space allocation percentage point change 2010-12
•Figure: Iceland share of market held by food & grocery retailers 2008–13e
•Figure: Iceland share of market for food & grocery products 2008–13e

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By market: Iceland (in Europe)