The retailer's parent Big Food Group Recorded a loss before tax of£9 million. Iceland and BFG-owned food service business Woodward both reported operating losses. However, the group's wholesale business Booker improved its operating profit, albeit on lower sales than the equivalent period last year.
Iceland's operating losses were£400,000, compared with a profit of£3.4 million last year. Sales fell 2.7 per cent compared with the same period last year, even though the retailer underwent an accelerated store format conversion programme and opened four new stores.
Iceland said sales of frozen goods were weaker than last year because of promotional activity by rivals. Seasonal products were also affected by the wet summer, with year-on-year sales of ice cream down 15 per cent and sales of barbecue products down 15 per cent. The combined impact of these two categories alone accounted for half of the retailer's sales decline.
Big Food Group chief executive Bill Grimsey said: 'The UK food retailing market has undergone significant changes over the past two years, with the large supermarkets entering the convenience and neighbourhood markets, and consolidation driving prices down. The group has responded robustly to these challenges with the accelerated roll out of its strategic initiatives, as well as further cost efficiency measures.'
The retailer reported that talks with potential bidder Baugur were still on track and both parties had agreed in principle with BFG's pension trustees that the ongoing funding of its deficit will continue, should the retailer change hands.
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