Iceland bosses have issued a rallying cry to staff to improve trading after a first-half slowdown.
The call to action comes ahead of a Christmas period more critical than ever.
On present trends, annual earnings look likely to fall, which would be the first time this has happened under Malcolm Walker’s stewardship since 1996.
Like-for-like sales at the frozen food specialist slipped by 0.2% in the six months to the end of September. In the 53 weeks to the end of March like-for-likes were up 6%.
Its full-year target is now flat like-for-likes – behind an originally anticipated 3% rise. EBITDA is likely to fall from £230.2m last year to between £215m and £220m in 2012/13.
Iceland executive director Nick Canning said that money-off coupons, round-pound pricing by rivals including Asda and “extremely strong” comparatives were to blame for the first-half like-for-like fall.
However, Walker, who in March led the purchase of the 77% of the retailer he didn’t already own for £1.55bn, told staff and investors at a conference in Dublin this week that a short-term profit fall would not derail Iceland’s growth strategy.
Walker said: “I care about this business as a business. I care about our customers, staff and products.
I care about giving value for money, market share and being the best employer in Britain.
“My theory is do not worry about profit today. Do the right thing by the customers and you will be rewarded with profit tomorrow.”
Chief financial officer Tarsem Dhaliwal also rallied store managers. He said: “We have been riding a rocket ship. Every year we have increased our profits without fail.
“We had our arse kicked by the other food retailers [in the past six months]. They stole our customers’ food spend. We cannot take the credit and then hide in the shadows when things go wrong.”
But Dhaliwal added: “Iceland is still a highly profitable and highly cash-generative business.”
The retailer is to ramp up international expansion, including opening four stores in the Czech Republic, and return to online grocery next April. Supply chain director John Mackie has been promoted to lead ecommerce.
As Iceland gears up for the Christmas period, it has ended its relationship with The X Factor star Stacey Solomon and opted for a series of nine festive adverts that will showcase its party food.
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