Closure of depot expected to affect 350 staff
Iceland chief executive Malcolm Walker was battling to avert a strike at the retailer's Deeside distribution depot as Retail Week went to press.

Members of the TGWU threatened a 24-hour stoppage from midnight last night after the food retailer revealed it would shut the depot from September.

The closure is expected to affect 350 staff, but a similar number of jobs will be created at nearby Warrington.

The decision was taken on Monday after a 90-day consultation, when the union refused to accept changes to wages and conditions Walker believes essential to make Deeside viable.

Walker said he had offered a 'highly competitive' new basic wage rate and a one-off payment of£4,000 per employee in return for the abandonment of 'restrictive practices'.

He said: 'We have taken the decision with considerable reluctance. Deeside is one of four Iceland depots and by far the least efficient and most expensive to operate.'

Walker, Iceland's founder, returned to the business as part of a Baugur-backed takeover last year. Since then, he has returned the chain to its roots and claimed a 14.8 per cent sales uplift in the final quarter of last year.

Walker said: 'We have achieved a dramatic turnaround in financial performance and taken radical action where necessary to cut costs. This action in our distribution arm completes the process of equipping Iceland to compete in 21st century food retailing.'

Icleand is the latest grocer to contend with trade union militancy. Asda and Morrisons have both faced strike threats over the past year.

A TGWU spokeswoman said that negotiations with Iceland continued.