Iceland supermarket boss warns cost of living threat is 'like a speeding train'

Iceland boss Richard Walker has written an open letter in which he spoke of his determination to help families make ends meet.

He spoke as inflation soars to its highest point in a generation amid soaring grocery and fuel bills.

The store, which was formed in Oswestry, Shropshire, in 1970, markets itself on value and has grown significantly in recent years.

Mr Walker warned that the cost of living crisis will get worse before it gets better.

He said: "Food price inflation is already in double digits and is only going to get worse in the short term – the respected Institute for Grocery Distribution reckons it will hit 15 per cent by the end of the year. I don’t disagree.

"This surge in prices is a global phenomenon produced by a range of adverse factors; not least the continuing impact of Covid on supply chains, the war in Ukraine driving up the cost of fuel and many basic foodstuffs, and the poor harvests forecast across the northern hemisphere.

"It’s not the fault of the UK Government, or of British retailers, but all of us have a responsibility to do what we can to alleviate the pressures, particularly as they fall on those least able to cope."

Mr Walker, writing in the i newspaper, said he is seeing real hardship among those who normally shop at Iceland.

He said: "While some retailers talk about seeing consumers trade down from premium brands to cheaper own labels, we at Iceland are seeing customers trading down to food banks, or to hunger.

"These are people who were struggling even before the pandemic and the surge in inflation, often trying to feed a family on as little as £25 a week. They do not have any spare notches on their belts they can tighten.

"Faced with massive increases in our energy bills, and in the costs of most key ingredients, we simply can’t absorb all the pain to help our customers. But we are doing everything we can.

"Iceland’s promotions, discounts and deals for everyone enable customers to get the nutritious food they need to see them through hard times. Other food retailers are helping in their own ways too – every business must do whatever they possibly can to help their customers get through this.

"Although we don’t sell fuel ourselves, Iceland – as a private, family-owned company – has more capacity to bear additional costs than those competitors who are answerable to shareholders on the public markets, or to private equity owners, both relentlessly focused on driving up short-term returns."

Mr Walker called on ministers to consider how they can help supermarkets keep prices down for customers.

He added: "All of us could really do with a helping hand from the Government, not least in reforming the outdated business rates system that is piling ever-higher costs on 'bricks and mortar' retailers, and so driving the depressing downward spiral in the vitality of town centres across the country.

"It would also be a huge help if the energy price cap offered to consumers could be extended to businesses, for which the current squeeze from rising electricity and fuel costs has no limits.

"Finally, a targeted reduction in VAT would ease the pressure on consumers – not least a VAT cut on petrol and diesel, where surging prices at the pumps are currently delivering windfall returns to the Treasury – but are also helping to drive up the distribution cost of everything, including food.

"The Chancellor has already done some commendable things to help the poorest in our society weather the storm. I hope he can now help us and other supermarkets to keep playing our part."