There was precious little talk of economic woes at Iceland’s Store Managers’ Conference last week – apart from how they are benefiting the retailer. Jennifer Creevy went to find out more.
What do you get if you cross pop band Girls Aloud, the Manchester Camerata Orchestra, James Bond-style flame-throwers, violinist group The Sirens and celebrity presenter Kate Thornton? The answer is not the Royal Variety Show but the Iceland Store Managers’ Conference 2008.
Held at the Liverpool Arena and Conference Centre overlooking the Albert Docks last week, more than 700 store and area managers were treated to a medley of surprises throughout the afternoon and evening as they got into the mood for the key trading period of Christmas.

Despite the gloomy mood and uncertainty over major investor Baugur, the event reflected founder Malcolm Walker’s view that businesses need to remain positive and that key staff need to be highly incentivised. Underpinned by a serious message about staying ahead of the competition, the annual extravaganza wowed managers at every step.

Iceland chief executive Malcolm Walker told staff that the grocer is “flying” at the moment and, having worked hard to whip the business into shape since his return four years ago, wasn’t shy about raising the bar again. “I want more for the company and more for my staff, and I can’t have one without the other,” he said.

Iceland managing director Andy Pritchard reassured staff that despite the global financial situation, and the turmoil facing Baugur, the business will not suffer. “We are sure the share structure will change,” he said. “But the business will remain untouched and there will be no change to the management.”

Pritchard pointed out that shopper habits in the credit crunch play to Iceland’s strengths. Trends such as changing to a less expensive supermarket, buying more promotional products or cutting down on transport costs all benefit Iceland, he said, as “we offer real value”.

He explained that the grocer has dealt with food inflation in three ways. For some products, such as milk, it has held prices and absorbed the costs to “be the cheapest in the market”, for some ready meals it has reduced the pack size and for other products it has had to put the price up. “All of us are affected by food inflation, but we are doing all we can to keep giving customers value in all areas,” he said.

The grocer’s commitment to value is reflected in its new Christmas range. Iceland believes that the credit crunch will lead to customers favouring a traditional Christmas, so it has gone back to basics and ditched the likes of a “boozy goose”. Alongside its frozen turkeys and joints, it has£1 entry price products such as jumbo tempura prawns and sticky chicken skewers. Other new products include a 50-piece buffet for£5, scallops in shells for£2 and the star product for this year, two half lobster tails for£5.

In true Iceland style, Pritchard said the retailer would not stop investing in the business despite the global slowdown – with, for example, staff pay rises above average at 6 per cent – as the retailer is “not into big bold statements, but highly motivated teams”.

To keep staff motivated, they were told about the initiatives that would make their lives easier. They include everything from having Christmas stock delivered later so as not to clog up their stock rooms, to more delivery slots for its home delivery service. The grocer also revealed the national launch of its bonus card, which not only gives staff more of a chance to interact with customers, it gives them the added incentive of prizes for signing up new customers and swiping cards.

Before staff donned their black ties for the evening function – Iceland also paid for the suit hire – Walker explained the Christmas bonus schemes. Prizes included a trip to the Seychelles and a BMW convertible up for grabs. Walker promised that if the grocer had another great year, and “performed really, really well”, he would treat them to five days in Florida for the 2009 conference. And he strongly believes staff will hit their targets.

The evening bestowed further awards on staff for outstanding achievement during the year and presented the retailer’s year-long charity efforts to the Alder Hey Hospital, with a massive£1 million cheque.

And despite the excitement of entertainment such as Girls Aloud, the managers were more wowed by the company. One store manager said: “No other retailer treats its staff this way and none of us would be so motivated if it wasn’t for Malcolm’s leadership.” And if Walker continues to keep his staff this happy – which, with Florida up for grabs, no doubt he will – they will all be dancing with Mickey Mouse next year.

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