Improving Iceland looks at Londis
emerge victorious in the bidding war for UK convenience store
operator Londis, a reflection of the continuing improvement at the
company which just a few years ago was more likely to be considered
as a takeover target.
The group behind the Iceland supermarket chain and Booker cash & carry business has today issued a trading statement showing further good progress in like-for-like sales growth as its programme of store refits and other restructuring measures continues to pay off.
Third quarter (13 weeks to 26 December) like-for-like sales growth was a solid 2 per cent, the company said, while the five-week Christmas period to 2 January showed a particularly good 3.2 per cent improvement.
Of this, Booker contributed 1.6 per cent growth in the quarter and 3 per cent in the Christmas period, with tobacco sales in particular growing strongly. Tough trading conditions were offset by good alcohol sales in the run up to Christmas, although sales through independent retailers were slower as a result of widespread price discounting by the major multiples.
At the Iceland chain, quarterly sales growth was a more modest 1.2 per cent, but the Christmas period was particularly good, with like-for-like sales ahead 1.9 per cent due to better availability of the highly successful Party Fayre range and a strong performance from the £10 Christmas Dinner Meal Deal.
Store refits continued apace during the period, with a total of 26 stores refurbished in the quarter bringing the total number of new concept stores to 119. These new style outlets showed immediate improvements, with above average growth from the grocery and fresh produce categories.
The Woodward Foodservice unit showed particularly strong sales growth - some 32.8 per cent during the quarter and 36.2 per cent during the Christmas period - helped by the addition of a number of new customer accounts.
But as the company continues to improve, it is the potential acquisition of Londis which is increasingly occupying the thoughts of the management team. "The trading environment remains tough, but we are gaining sales momentum from our own actions. The sale of Londis would present an opportunity for us to serve another group of independent retailers by bringing our scale and expertise to help them to succeed," said chief executive Bill Grimsey.
The Londis symbol group would be a good fit with Booker, which already supplies 1,364 customers under the Premier fascia.
