Retail Week Columns
What to do when you feel the heat? Build a kitchen
Doing something a little crazy if the only way to fight off a slow decline into obsolescence
December 2, 2016
As a Yorkshireman, I am naturally very familiar with the anguished cry of “how much?” that usually attends any major purchasing decision in the county. Like a kitchen refurbishment, for example.
So I am delighted to report that I did not blanch or blink when presented with the bill for our new kitchen at Iceland: a cool £2.5m.
True, it’s much more than a standard domestic kitchen.
In fact it contains no fewer than five of those, surrounding our main development kitchen, which has all the latest gadgets and gizmos you would expect to find in a top Michelin-starred restaurant.
No surprise there, given that that is exactly the background of our new head chef Neil Nugent, who joined us in February after stints with a number of our competitors including Waitrose.
So in the perhaps unlikely setting of Deeside Industrial Park we now have the best development kitchen of any retailer in the UK, helping us to add serious impetus to our drive to innovate, improve and educate the public about the many huge advantages of frozen food.
I’ve been banging this drum for 46 years now, and Iceland’s quality has always been far better than most people think.
But I’ll admit that we were guilty of allowing our emphasis on incredible value to obscure that.
If you’re selling a pizza for a quid it takes real effort to persuade a middle class sceptic that it isn’t rubbish - even though the economies we can achieve by freezing really do make it possible to offer food that is high quality, tasty and healthy at a scarcely believable price.
Our recent press coverage, notably following Good Housekeeping’s verdict that our mince pies, turkeys and stuffing parcels are simply the best in the UK, is helping us to get that message over with ever-increasing strength.
While our new concept of larger stores branded as The Food Warehouse, and refurbishments of traditional Icelands like the one in Clapham Common, are steadily extending our consumer appeal.
Are we re-inventing Iceland? Yes, as we have re-invented it many times over the years, as we evolved from a loose frozen food shop into a freezer centre, then a specialist in great value ready meals.
Now we’re the UK’s leading specialist retailer of frozen fish with a whole host of unique, delicious and award-winning products to tempt even the most jaded palate.
Whatever line of business you are in, constantly questioning what you are doing and trying new – and maybe crazy – things is the only alternative to a slow but inevitable decline into obsolescence and decay.
I read the descriptions of what we are doing as “the English Aldi” with mild irritation.
First because we’re based in Wales. And secondly because I think we are far better than that.
Like every other UK food retailer, we’ve felt the heat of competition in the last few years, but we’ve stayed true to our roots in frozen food.
And, faithful to our always contrarian instincts, we’ve done the exact opposite of getting out of the kitchen!
Retailers should be seen as heroes, not villains
Britain is indisputably world class at retailing and it’s painful to see our industry tarnished by the few.
September 9, 2016
Nothing is more important to any of us – whether as individuals or businesses – than our reputation. And few things of such value are more fragile.
A lifetime carefully building up a good name can easily be wiped out in just a few seconds of misjudgment, or with a handful of badly chosen words.
And even if we manage to dodge those elephant traps ourselves, we are not immune to the mistakes and misdemeanours of others.
Just as the MPs involved in the expenses scandal trashed the image of Parliament as a whole – “they’re all the same, aren’t they?” being a common refrain – every retailer risks reputational damage from the failing businesses, endangered pensions and questionable employment practices that have dominated the headlines this summer.
This pains me greatly because I don’t want the industry where I have spent my whole working life to be a byword for fat-cattery, rule-bending or simple incompetence.
Retailing has long one been one of those arenas in which Britain is indisputably world class.
We’ve created some of the best-known global brands, become the nation’s biggest employer, and brought consumers a range of products and services of which they could not even dream when Iceland started trading in 1970.
Unlike some conveniently offshore online retailers we at Iceland pay our taxes in the UK to build hospitals, roads and schools, and put even more back into the community through our support for good causes.
Right now our focus is on finding a cure for dementia by helping to fund the development of a new, world class research institute at UCL in London.
As usual, our people and customers helped us to raise huge sums during our annual charity week in August; our suppliers have rallied round to support a major fundraising ball at my own home later this month; and along with several other like-minded retailers we are donating all proceeds from the sale of single-use carrier bags to this vitally important cause.
Iceland alone has pledged to raise £10m for UCL Dementia Research over the next three years, and the contribution from retailing as a whole will be much greater – and it is not too late for those who have not yet made a commitment to come on board.
There need be no conflict between making a good living out of retailing and doing the right thing for colleagues, customers and society as a whole.
At Iceland we’ve always tried to treat our people fairly, pay them as generously as business performance will allow, and do our best to make work as much fun as it can be.
We’ve also led the way in many initiatives over the years to improve food standards, and always sought to give consumers great quality and brilliant value.
No one ever gets everything right, but we learn from our mistakes.
Retailers should not be shy about publicising the good we all do. Because retail wealth creators deserve to be recognised among society’s heroes, not its villains.
Age brings wisdom, not complacency
No one will ever call me an old buffer because Iceland will always be an innovator and will constantly strive to do better.
March 3, 2016
Hanging on the wall of our boardroom is a cartoon of a sad-looking board whose chairman is saying, “Instead of risking anything new, let’s play it safe by continuing our slow decline into obsolescence.”
That sums up a dangerous mindset liable to develop with age, comfort and success. Having recently enjoyed a significant birthday I can reflect on that.
Younger people have the drive, energy and ambition to take risks, innovate and grow a business whilst age brings caution and the tendency to slow down and look for security.
We may be called dinosaurs as we struggle with technology and refuse to accept new ideas. Or at least that’s the theory. In reality age isn’t chronological: it’s a mental state.
After 45 years running Iceland (apart from a four year break when in my absence it was taken to near bankruptcy) I believe we have evolved, innovated, embraced technology and kept the spirit of fun, excitement and energy that would characterise a much younger business.
I don’t mind being called a maverick or unconventional. Iceland will never be a boring place to work and my belief is that a leader should have the drive and energy to inspire.
Yet the danger of complacency is ever present. It can creep up on us. Do too well for too long and the old adage “if it’s not broke don’t try to fix it” can kill off the constant need to innovate and change.
We’ve had a bit of that in Iceland but thank God we are in one of the most oversupplied and competitive industries in the UK. That soon wakes you up.
If you want to see true complacency, try Courchevel. It’s one of the best ski resorts in Europe but everyone wants to go there so there is never a shortage of customers.
As a consequence the hotels and restaurants don’t give a damn. The prices are worse than outrageous and the service is appalling.
Try complaining and you are just met with a Gallic shrug. They really don’t care. If you don’t come back someone else will take your place. It’s OK for now but a dangerous position for the longer term.
By contrast, I have a share in a UK restaurant business and we try so hard to give great customer service. A complaint usually gets you a free meal.
Likewise in food retail we can never take customers for granted. There are simply too many of us chasing the same shopper.
So to survive we have to be more than competitive. We have to innovate, provide outstanding quality and service, and try every trick in the book just to keep customers coming through the door.
We can never sit back and relax or give in to caution. We must constantly innovate, strive to do better and keep fighting.
But then I suppose that’s what keeps me young. No one will ever call me an old buffer.
I always think there’s nothing to celebrate with a birthday but as a colleague pointed out, “It’s better than the alternative.”
How retailers could make medical history
The plastic bag levy offers retailers the ideal opportunity to fund vital charitable causes and research into dementia should be a priority.
December 4, 2015
The biggest killer in the world today isn’t famine or ISIS – it’s dementia.
Right now 850,000 people in the UK suffer from the illness and, if nothing is done, half of all children born today will develop it.
It’s the only major killer disease that is claiming increasing numbers of victims every year.
The total annual cost of dementia to the UK economy is £26 billion – exceeding that of cancer, heart disease and strokes put together.
Yet, amazingly, for every £10 we currently spend on dealing with the effects of dementia, we only invest 6p in research into preventions and cures.
University College London (UCL) has some of the best neuroscientists in the world, many of them Nobel and other major prize winners, but they are scattered across multiple sites and working in cramped, almost third-world conditions.
There is a plan ready to go to build a world-class £350m Dementia Research Institute, which would bring everyone together with state-of-the-art kit.
This would enable a huge leap forward towards finding a cure.
But there’s a problem – they are £100m short of the funding they need to enable work to start.
Most British retailers give money to charity every year. The new 5p carrier bag levy provides an additional charity windfall for retailers which, by my reckoning, should amount to over £100m in one year alone.
The VAT charged on the bags will add another £20m plus to Government coffers.
I know that on the retail battlefield we spend all our time trying to kill each other but wouldn’t it be a great idea if we could put aside our differences and agree to give just one year’s money to UCL and make medical history?
Iceland has pledged all its revenues from carrier bag sales in the UK for the next three years, and committed to donate at least £10m to the project.
I am delighted that we’ve already been able to forge a unique coalition with our new-found friends at Asda, Waitrose and Morrisons, who committed to support the project from the outset.
Since then HSS Hire, WHSmith and Booths have all come on board and it’s looking likely we can promise around £25m to the cause we all support.
Last week’s Government spending review promised £150m towards a dementia research centre and some of that could provide additional funding for the UCL project. We are not there yet, but well on the way.
Just think what properly funded research can achieve.
Thirty years ago contracting HIV/AIDS was a death sentence; today those with the condition have a life expectancy only slightly shorter than average.
Dementia is an issue with which it is amazingly easy to engage colleagues and customers, because almost every family has been affected by it.
We all have our pet charities but as businessmen we surely appreciate putting our investment where it will achieve the biggest impact. This project will save and improve millions of lives.
Please contact me if you want to join the club.
Finding a better way of dealing with suppliers
Iceland is meeting suppliers to create a more transparent, collaborative way of doing business.
September 25, 2015
Regular readers will know that I’m as keen on bureaucracy as Jeremy Corbyn is on the monarchy. Small wonder, then, that I wrote a column here six years ago dismissing the proposed grocery ombudsman as a waste of time and public money.
I certainly wasn’t anticipating then that Iceland would be playing the star villain in the 2015 Groceries Supply Code of Practice (GSCOP) survey, as the supermarket least compliant with the code. Naturally I wanted to find out why.
When I actually read the GSCOP rules I was surprised to find nothing I could really disagree with. It’s the way any right-minded person would want to conduct their business.
I’ll admit that there is a remarkable contrast with our own complex terms and conditions. But then the same is true of the terms and conditions imposed on us by our larger suppliers.
Or I should say the conditions that we each try to impose, because in reality they are so unreasonable that no one in their right mind ever signs them.
This is a crazy way to do business so next week I’m hosting a supplier conference with a difference. Not to ask for keener prices, but to promise a simpler and more transparent way of doing things that I hope will make all of us happier and richer.
I like a challenge. No one could believe it when Iceland was twice voted the UK’s best big company to work for. Now I’m aiming to make us the best food retailer to do business with.
But we’re only a small player, with just 2% of the grocery market. And that means big branded manufacturers can and do try to push us around in exactly the same way that some retailers allegedly bully their smaller suppliers.
My particular bugbear is their obsession with promotions: half price, 50% extra free, BOGOFs and so on.
That and the ridiculous proliferation of retrospective discounts and overriders that mean you need a first-class maths degree to work out your cost price. A real issue when your only qualification is an O-level in woodwork.
Our customers can’t understand why we can’t sell their favourite brands at an everyday low price all year round, and frankly neither can I.
Particularly when our discount competitors do seem able to secure such deals, perhaps because they have the leverage of being able to turn to cut-price lookalikes as an alternative.
Should we perhaps seek to extend the role of the ombudsman to protect smaller retailers from big suppliers? No.
Better that we should all try to understand each other’s needs and aim for cooperation, not confrontation.
If Iceland is going to trade successfully we need constant innovation that helps to give us a point of difference, and prices that are permanently realistic when measured against our competitors.
We’re going to offer a better way of doing business and I hope our suppliers respond positively. If they do, I hope to see a marked improvement in our ranking in the next GSCOP survey.
And if we all try to help each other, we won’t need an ombudsman after all, will we?
In retail, everyone’s name is on the guest list
A recent night out in London offered a salutary lesson in customer service.
June 26, 2015
Iceland’s Christmas incentive is a fierce annual competition offering the winning store manager from each of our six regions a fantastic trip away for two. Previous years have seen “millionaires’ weekends” involving flights to New York, private jets to Monaco, and yachts in Ibiza.
This year of austerity saw us going to London!
Even so, we laid on transport by helicopter from their homes and a chauffeur driven limo for each couple. We started with a “board meeting” at our City lawyers DWF, in surely the most impressive boardroom in London. A little hesitant at first, our managers soon had some very useful things to say about the business and how we could improve.
We stayed in the best rooms at The Corinthia Hotel and made full use of their amazing spa facilities. The group enjoyed shopping, sightseeing and The Lion King. On Saturday night we had a banquet at Novikov then headed for the famous nightclub Mahiki.
You often read how hard it is to get into such places, so we had taken no chances. Our table was booked months ago and confirmed by email. Our organiser had visited earlier that day to do a recce and reconfirm, which we did again 20 minutes before we arrived.
Everyone was “glammed up” and looking forward to rubbing shoulders with celebrities. Fortunately it was a warm night so the long wait outside didn’t matter much. Eventually a blonde appeared with a clipboard and said we were not on the list and she had no knowledge of our booking.
After a bit of haggling she disappeared before coming back to admit we were on the list but they had given our table away and couldn’t do anything about it. We were 20 minutes early and I explained that people had come from all over the UK for this one night, but she really didn’t care. The bouncers were giving us death stares, though they weren’t to know one of our managers is a world Kung Fu champion. I whispered in his ear he should go and kill the doorman.
I thought about the contrast with our own customer service, and how we will do anything to get people through our doors.
This looked like an event gone badly wrong when I suddenly remembered I’ve been a member of Annabel’s for about 15 years, although I think I’ve only been twice. I rang and they couldn’t have been more welcoming. When we arrived the doormen smiled and rushed to open our car doors. They quickly produced four jackets for the men in our party who didn’t meet the dress code. We were shown to tables beautifully laid for dinner, soon cleared without fuss to make room for our drinks. We danced the night away and had a wonderful time.
The contrast was amazing and probably explains why one of the oldest clubs in London is still there. I’m sure Mahiki soon won’t be as customers move onto the next. Which reminds me, I must give DWF a call about breach of contract ...
Keep it simple, stupid
Bloated bureaucracy gets in the way of the everyday joys of retailing.
March 27, 2015
It is surely no coincidence that “corporation” has two meanings: a company and an enormous belly. Because if you ever take your eye off your business, I can guarantee it will run to fat.
I founded Iceland as a family company and I like to think it still is one. We’ve just had the results of our annual staff survey and happily our sense of family and community are still very strong, despite the inevitable pressures of the current high street war.
But constant vigilance is required to stop that family ethos being shackled in 50 shades of corporate red tape. My number one priority today is to make everything as simple as it can be, and always should be if a company is to flourish.
We have a sign on our boardroom wall that has been there since I came back to Iceland in 2005, setting out the three key principles by which we turned the business around then: Focus, Simplicity and Accept Reality. Last year we added a fourth: Urgency.
We joke about the invading foreign discounters as our adversaries, but at least as great a threat is the enemy within: bureaucracy. Often introduced with the best of intentions, like an interesting alien plant that goes on to smother your entire garden.
Bureaucracy is the silent killer in any organisation. It grows like a cancer, choking the life out of your operations, slowing your ability to respond to the realities of your market place, and taking the joy out of coming to work.
It reached its apogee in Iceland in the four years I was away, when the head office swelled from 600 to 1,400 staff. Corporate governance might have been top class, but the actual business was on its knees.
We had to lose several hundred people not so much to save costs as to break the logjam and actually get anything done.
I swore it would never happen again but, like a serial dieter, I’ve found the weight creeping back despite my best intentions. Not so much in staff numbers as in the growth of unnecessary and often counter-productive process and procedures.
One of the few undoubted benefits of letting the cameras in for our reality TV series in 2013 was that it exposed some practices, notably in recruitment, that I had no idea were going on. They certainly aren’t now.
The reality is that when things are going well in any organisation, its bosses tend to get complacent and let their eyes wander off the ball. It’s human nature, and I have been around the resulting corporate cycle of success, decline and rebirth at least three times now.
Luckily retailing is a straightforward business and it does not need a rocket scientist to put it back on track. Nor does it need bureaucrats to keep it there. It needs traders, marketeers and people who take pleasure in serving others.
None of us would trust a pilot who waited until his plane was stalling before he noticed there might be a problem. We retail leaders need to be similarly alert.
Luckily for all of us there is no better business maxim and none easier to remember than KISS: Keep It Simple, Stupid.
No truce in supermarket aisles this Christmas
Popular misconceptions about Iceland’s offer abound, but the grocer is fighting back in the run up to Christmas and beyond.
December 19, 2014
Everyone in Britain thinks they know two things about the Germans. They’re the first to hit the sun loungers and they’ve got no sense of humour.
Isn’t it odd, then, that ads designed to make us smile are a key feature of the campaigns for British hearts and minds run by Aldi and Lidl?
Anyone who watched last year’s BBC2 series Life in the Freezer Cabinet knows there is no shortage of would-be comedians in my business. Unfortunately, however, most jokes about Iceland are at our expense.
Middle class, metropolitan journalists love poking fun at our products, and sneering at frozen food in general. Well, if it’s not fresh it’s got to be rubbish, hasn’t it?
That won’t stop them buying chilled ready buying chilled ready meals from M&S or Waitrose, bunging them in the freezer on their “use by” date and microwaving them a few months later.
“Fresh is best” is an absurd prejudice I’ve spent years trying to counter by pointing out the huge advantages of frozen food, from the higher vitamin content retained by vegetables to the lower risk of campylobacter in frozen chickens. Plus the big savings for consumers across all products, and the massive reduction in food waste.
Recent publicity has again underlined that so-called “fresh” fish can easily be up to 15 days old, and will often reveal in the small print that it was previously frozen. So if you really want it fresh, buying it frozen is the only answer.
These arguments are so convincing that I feel our critics simply aren’t open to reason. I’ve also reluctantly concluded that they’re not just prejudiced against Iceland, but against the people who shop with us.
Last year I had a female journalist scream at me that I should be ashamed of myself for making poor people fat by selling them rubbish. I tried explaining that our best selling lines include frozen chicken breasts and salmon fillets, and you can’t get more wholesome than that, but it cut no ice.
Another lady, who is unlikely to feature in ads for successful slimming products, enthusiastically ploughed her way through a lavish Iceland buffet, consuming six of our Bubble Bobble Prawns before questioning in print “what dark corner of hell they were dragged from”.
Three months ago we started opening our new stores called The Food Warehouse, around twice the size of a typical Iceland. We didn’t seek national publicity for the initial opening, but our prawn enthusiast came along anyway and devoted a double page spread to sneering at our ranges of top quality luxury and exotic meats and fish. The sort of thing, she alleged, that misguided provincials wrongly imagine posh people like to eat.
Meanwhile most of the national newspapers have been running what read like year-long free advertising campaigns for our German competitors, lauding their truly amazing, award-winning quality and value.
We’ve noticed that they win lots of awards mainly because they put loads of products in for them, so we’ve started doing some more of that ourselves. I was rather pleased when our Luxury Mince Pies beat not just Aldi and Lidl, but also Harrods and Fortnum & Mason.
Meanwhile our humorous Christmas ads have achieved the supreme accolade of Campaign magazine’s dual endorsement as the most recalled ad of the week, and one of the worst ads around (what they call “a Top 10 Turkey”). I always find that reassuring.
There will be no Christmas truce in the supermarket aisles next week, and I do hope our German friends aren’t starting to feel too comfortable on those loungers.
Grocery’s perfect storm
The battle raging between the grocers has made tough decisions necessary. But it has also brought opportunities.
November 7, 2014
There’s a war going on in Britain’s supermarkets. The shock troops of the German discount invaders are wreaking havoc, overturning long established perceptions of what customers want and how to serve them.
Add in the switch to online ordering, the trend away from hypermarkets and big weekly shops, plus the focus of the largest of the Big Four on its own self-inflicted problems, and you have the recipe for a perfect storm that makes Michael Fish’s famous hurricane look like a gentle breeze.
Everyone loves to read about disasters, so the car crash that is UK food retailing today makes great copy. But spare a thought for the human cost. Many thousands of jobs are at risk and most of us will ultimately feel the pain in our pensions as share values plummet.
In order to protect the livelihoods of my 25,000-plus colleagues, I’ve had to take drastic action. Cutting milk to 89p for four pints has won me no friends in the farming community, though it was entirely funded from our own margin. But it’s helped to renew Iceland’s point of difference on the high street.
We’ve also cut prices on other lines, rolled out online shopping across the country and developed a completely new type of store called Food Warehouse that offers a wider range of speciality lines and bulk packs that represent really outstanding value.
At Iceland we pride ourselves on being innovative, but achieving exclusivity is more of a challenge. We invented frozen party food in the UK but everyone quickly copied us. You can guarantee that our best-selling lines last Christmas will be in several other stores this year. It’s a constant challenge to keep one step ahead.
The good news is that this works both ways and we can quickly learn from and copy our competitors. Iceland itself wasn’t an original idea when I started it in 1970. I pinched it from someone else.
We are learning from the discounters how to do things more cheaply and efficiently, and can pass those savings on to our customers. The tricky bit is doing that without chucking out the distinctive ethos and culture that make Iceland Iceland rather than Aldi or Lidl.
The best bit of business advice I have ever received is simply “never give up”. So we are not daunted or discouraged by the waves buffeting our business.
We also benefit from being privately owned, and not beholden to shareholders who are relentlessly focused on short-term performance and therefore demand quick fixes.
I have one further important advantage in being Britain’s longest-serving food retail chief executive: I’ve seen it all before.
The analysts read the last rites for Iceland as a quoted company when we had our first ever profit dip way back in 1996. They told us we were finished. Worse than that, they said we should never have existed in the first place.
We proved them wrong by re-inventing ourselves and rebuilding a unique position in the market place. Free home delivery – which any accountant will tell you is economic madness – was critical to setting us apart and has never been replicated elsewhere.
The business had been brought to the brink of collapse again before I came back to run it in 2005. Once again, we turned it around successfully.
Yes, war is hell. But at least it’s not dull and, so long as we continue to believe that we can win once more, I know we will.
Doing the right thing pays dividends
Raising money for good causes is good for retail businesses
June 13, 2014
Last week’s D-Day commemorations were a powerful reminder of the huge sacrifices the last generation made for us. What can we do in return?
In Iceland’s case, the answer is a clear and practical one. We’re going to raise a million pounds for The Royal British Legion to support its efforts to help disabled service people back to work, and to support often elderly veterans and their dependents in their homes.
We raise at least a million for our Charitable Foundation every year. Since 2011, we have given more than £3.1 million to Alzheimer’s Research UK to help fund its vital research. Our money-raising efforts have also served a valuable secondary purpose, helping to raise awareness of the huge epidemic of dementia across the country.
Why do we, as a retailer, put so much emphasis on our support for good causes? First and foremost, obviously, because it is the right thing for every business and individual to do. But also because it is a great way of building our people’s team spirit, motivation and morale.
Every year in Iceland Charity Week I am stunned by the range of challenges our people volunteer to take on, from sponsored cycle rides to parachute jumps, running marathons to walking miles in wellies filled with custard. Their dedication embarrassed me into climbing Everest, abseiling down The Shard and trying to walk to the South Pole.
Iceland’s people do this because they believe in the causes we support. Our nearly 850 stores across the UK compete eagerly with each other to see which can raise the most money during the week, and have a lot of fun along the way.
This is absolutely in tune with my philosophy that there should be no conflict at all between doing a good job and enjoying yourself.
I always say that I’ve only ever had two jobs, and been fired from both of them. The first was with Woolworths and it taught me everything I needed to know about how not to run a retailer: hierarchical, humourless and inward-looking, rather than focusing on customers and what they want.
It’s not rocket science, but the first lesson for anyone contemplating a retail start-up must surely be to keep your staff happy. Happy staff make happy customers, and that is what puts cash in the till.
It’s not all about money, either. To many people’s surprise, Iceland does pay the second-highest hourly rate on the British high street, but I can’t claim it’s a fortune. Yet our staff have twice voted us The Best Big Company To Work For in the UK and for each of the last three years they have been more content with their pay and benefits than any other employees in the Best Companies survey. In 2012, they were even famously happier than the well-bonused bankers from Goldman Sachs.
Times are hard for some food retailers right now, though if truth be told I don’t remember any time during the last 44 years when it has seemed spectacularly easy. In hard times the temptation is always to look for easy savings, but you should make the charity budget the last place to think about cutting back.
Working together for a good cause undoubtedly helps to build morale in any business – and in retail we have the great advantage that we can involve our customers, too. What could be better than doing the right thing for society when it also helps to make your people and customers happy, and your business more successful?
UK needs infrastructure investment
Retail is being held back by poor roads and patchy online coverage
April 4, 2014
Even the most committed small-state libertarian wants to find a well-maintained road when he drives out of his house. These days easy access to the information superhighway is pretty vital, too.
I had time to reflect on the UK’s performance in these areas during a recent holiday in the Caribbean. The weather was better there, as you would expect. But so too was the mobile phone signal. Sailing from Antigua to the Grenadines, we could pick up 3G and 4G signals from every tiny island along the way.
I found the same thing earlier in the year when I went to Botswana, and they assure me that now you can even get 4G on Mount Everest.
Yet mobile reception and internet access are virtually non-existent where I live in Cheshire and at the nearby houses of my three children, all of whom have inherited at least some of my entrepreneurial genes and are trying to run businesses from home.
My mobile phone does not work in my office at Iceland either, in the middle of one of the largest industrial estates in Europe. Try taking a business call on the M56 motorway between Deeside and Manchester and you’ll find that there is no reception for at least half the way.
Perhaps that is to ensure no-one loses focus for a second on the important task of steering around potholes, which are now a major hazard on every class of British road. Secondary routes in the countryside are positively dangerous, and expensive - I recently spent £4,000 repairing pothole damage to my car.
Those people who write to their local papers bemoaning our ‘Third World’ standards really should get out more. The infrastructure here is in worse shape than in many poorer countries. And this affects all of us as retailers.
How can I take quick decisions to grow a business employing 25,000 people when I cannot get onto the internet or send emails via my landline at home? How are our customers supposed to spend with us if driving into town is hazardous and access to the web for online shopping is painfully slow or simply non-existent?
We’ve been told for years that the coffers are empty, but you don’t have to be a Daily Mail reader to know that waste remains endemic in local and national government, and in the quangos to which they have delegated so much of their authority.
Iceland has paid around £600m into the Government’s coffers over the last eight years alone, and I’d like to see some return on our investment. Specifically, a fundamental reordering of priorities to put improving infrastructure right at the top of the list: whether that is repairing roads, constructing HS2, increasing airport capacity, accelerating the roll-out of superfast broadband or building more half-decent flood defences.
This isn’t an argument for a massive increase in state intervention across the economy. It’s a plea for the state to focus on the things that only it can do: building and maintaining an infrastructure that actually works so that private enterprise can flourish.
Politicians of all parties should stop chasing tomorrow’s headlines and focus on building a country that actually works for our children and grandchildren. If they do, they will be creating the right environment in which businesses like the Icelands of tomorrow can grow up to create more jobs and pay more taxes.
I think they call that a virtuous circle, don’t they?
Lessons on letting the cameras in
These days social media might be more effective than TV coverage
February 21, 2014
Last year I had two uncharacteristic bouts of TV exposure. The first was in February when I went on the offensive (in more senses than I’d intended) to defend British food retailing during Horsegate.
The second, which benefited from slightly longer planning, was in the autumn BBC series about Iceland.
It’s fair to say the second got much better reviews!.
At a time when every retailer from Liberty to the pound shops is under siege from production companies, I thought it might be useful to try and answer the key question: does TV do your business any good?
Our series was undoubtedly very positive for staff morale, and for recruitment. It more than trebled the daily hits on our careers website.
It also boosted sales of some featured products, from the expected (Bubble Bobble King Prawns) to the more surprising (Doner Kebab Pizza).
Anecdotally, some middle class people who had always given Iceland a wide berth told us they had tried us on the strength of the series, and been favourably impressed.
But did it generate the sales bonanza that the BBC were fretting about when they debated whether they could really air the programmes before Christmas, in case they were seen as three hours of free advertising?
Absolutely not. Of course we’ll never know how things might have turned out if 2.5 million people a week had not watched the shows, but there is no evidence that overall sales saw any real benefit.
And that is all any retailer really cares about.
I think we got across that Iceland is a fun place to work: something already well recognised by our strong showing in the ‘Best Companies To Work For’ listings, though people tend to react to our high ranking there with incredulity.
But we still have a mountain to climb in persuading a large and sceptical section of the population that we are not comedy purveyors of cheap rubbish, but genuine pioneers in raising food standards who give our customers great quality at amazing prices.
I could have forged a new career as a media pundit on the back of the series. The list of invitations to appear on chat shows, news and business programmes has been almost endless.
I’ve turned them all down because I’ve got a company to run and it’s hard to see how airing my views on climate change or shoplifting is going to help us shift any more salmon fillets.
If you are still tempted to sign up for a series of your own, do remember that editing can turn anything you say on its head: a fact of which I became painfully aware during Horsegate.
You will struggle, but try to ensure you have the right to see any footage before it airs, and do your best to exercise some editorial control. Some shouting may be required.
Almost exactly a year on from Horsegate, we experienced another media storm over a trivial incident in Kentish Town that we christened Skipgate. I was out of the country so could not take up the many requests for interviews, but still managed to make my views known through Twitter.
I seem to have emerged a hero in some quarters for supposedly helping to get the charges against the three bin raiders dropped.
The lesson on which you might like to reflect before you sign up to allow the cameras in is this: getting your point of view across on social media may be quicker, cheaper and these days it will almost certainly reach many more people.
My recipe for high street success
Box-ticking and bureaucracy must be ditched for town centres to thrive
September 13, 2013
Ten days ago we opened Iceland’s 800th store in the UK – our greatest number ever. The vast majority are on the high street.
So am I lying awake at nights worrying about the grim future facing town centres in the digital age? Not for a second.
Because when famous retail chains go bust it is rarely the fault of greedy landlords, spiralling rates or draconian parking rules. It’s almost always down to lousy management.
Woolworths was a prime example. The concept wasn’t terminally outdated: there are numerous bargain chains successfully doing the same thing, without the benefit of a century-old household name as their brand. Sadly, Woolies was just badly run.
I feel the same about Iceland. While I was away a management culture developed that was completely obsessed with governance, process and procedures.
As a result, no one apparently had time to consider the main things that actually matter to a retailer: staff morale and motivation, and driving sales. Remember those?
The prophets of doom are always with us. Not so long ago they were telling us that the dotcom boom would have finished bricks-and-mortar retailers by now. (Long before 2013 we were also supposed to have flying cars and eat only vitamin pills.)
Yes, some improvements in town centres are required. Business rates need urgent reform and ideally should be replaced with a tax on sales rather than assets.
Levying rates on empty properties is iniquitous and the planning system should be relaxed to make it easier for landlords to achieve a change of use for surplus retail assets.
But, as I have written before, landlords are a much maligned breed whose businesses are every bit as legitimate as those of their tenants, and it must ultimately be up to them to decide what they want to do with their own properties.
The last thing we need is Soviet-style central planning and compulsion, whether to force landlords to apply for changes of use or to collect a 0.25% levy on larger retailers’ sales to fund start-ups.
These ideas that would simply wrap up our high streets in the same sort of bureaucratic red tape that I feel did so much damage to Iceland while I was taking my sabbatical with Cooltrader.
When Iceland was a quoted company back in the 1990s analysts concluded that we should not exist – and they were right. Our business survives by sheer force of will and a constant drive to innovate and so keep one step ahead of the best competition on the planet.
I too felt that we were running out of road back then when we got to 760 stores, and could see little scope to grow the business further. How times change.
We shrank our chain a bit after 2005, but since then we have opened over 140 new stores and this year we will easily beat our target of adding 40 more, and can continue to expand at this rate in the UK for some time to come.
We are also rolling out our online shopping offer (an idea we pioneered in the UK, then pulled back from) and developing our export business and retail presence overseas.
It’s called enterprise and it’s what ultimately pays for the whole public sector through taxes. My recipe for successful high streets is exactly the same as it was for Iceland in 2005: go for simplicity, focus and an acceptance of reality, and forget box-ticking and bureaucracy.
Frankenstein food: the monster returns
Iceland will not back down in the fight for GM-free food
July 5, 2013
Nearly all the most memorable horror films feature a monster that refuses to die. So it is with “Frankenstein food”, as our environment secretary Owen Paterson bows to the trans-Atlantic pressure for genetic modification and urges consumers to embrace this marvellous new technology. He wants Britain to be a world leader in this benign revolution that promises to feed the hungry and “free up space for biodiversity, nature and wilderness”.
Now, who on earth could object to that?
Well, not so fast, Mr Paterson. I first stumbled across genetic modification back in the 1990s, when I was shocked to discover the devious way that GM soya was being grown in the US and deliberately mixed with conventionally grown soya to try and ensure that no one could buy a GM-free version. Which mattered because soya finds its way into pretty much everything we consume, from biscuits to beer and chocolate, and because it was a fundamental denial of customer choice.
What’s more, the whole project was being driven not to feed the world or cure cancer but to make lots of money for the chemical giant Monsanto, which was pushing a GM soya variety that was resistant to their star weedkiller Roundup. Why waste fuel and labour on mechanical weedkilling when farmers could simply spray their crops with Roundup instead?
Personally I’d rather not eat anything that has been drenched in weedkiller and I embarked on a personal crusade to find alternative sources of soya. Our technical experts told me it couldn’t be done, and our competitors thought I was mad. But in 1998 Iceland became the first UK food retailer to guarantee that all its own label products were free of GM ingredients, and it didn’t take too long for everyone else to follow our example.
Now, you could argue that this is also a denial of customer choice, and I agree that properly labelled GM products have a place on the shelves for those who want to buy them. By mucking around with the genetic make-up of plants and animals, science can offer us such wonders as tomatoes with a 20 day shelf life, and “super salmon” that reach maturity in a fraction of the time taken by conventional fish. I can’t imagine why anyone in their right mind would want to eat them, but I have no wish to deny enthusiasts the freedom to do so.
Recently a group of young scientists started lobbying UK retailers, urging us to stop “scaremongering” and do more to educate our customers about the benefits not just of GM food but of other additives including monosodium glutamate, artificial preservatives and aspartame.
There are certainly benefits to the companies pushing these technologies and products, but I think our customers are discerning enough to make their own choices.
I think they understand that, in the long run, food production systems that work with the grain of Nature and avoid the excessive use of chemicals and artificial additives are most likely to be the ones that deliver safe, nutritious food and the sort of environment that we would all like our children and grandchildren to enjoy.
I agree with Mark Price of Waitrose that GM is a solution looking for a problem. That is why Iceland will continue, as far as we can, to uphold the principles we established when we became the first UK retailer to remove all artificial colours and flavours from our products as well as the first to ban GM ingredients. Because we should all have the freedom to buy food that does not cost the Earth, in any sense.
A canter through my Horsegate
Standing up for retailers doesn’t necessarily win you any friends, says Malcolm Walker.
April 12, 2013
Nearly two months have passed since my “Ratner moment” in the media, and amazingly I still seem to be in a job. At times like these, being the largest shareholder in the company probably helps.
Why on Earth did I do it? I don’t normally rush to do TV interviews because Iceland isn’t a public company and I’m not on any personal ego trip. It seems better simply to get on with the job of delivering great value, quality and service to our customers, with the support of some of the happiest employees in the country – as the annual Best Companies survey proves.
But I decided to step up to the plate at a time when the Government was urging retailers to explain themselves. The problem was that they only wanted to hear from those who were willing to follow their script and say how sorry we were for having let everyone down.
But I didn’t think we had. As I said back in February, UK food retailers’ standards of traceability and quality control are the best in the world. The fact that some criminal gangs managed to by-pass them and sneak horse meat onto the market in place of beef made victims of retailers as well as consumers.
It is a simple fact that no one can test every product for everything. So every processor and retailer conducts risk-based tests looking, amongst other things, for possible cross contamination.
Looking for horse DNA requires a specific test that no one in the UK Government ever suggested that we needed to do until after the Food Safety Authority of Ireland (FSAI) found evidence of contamination.
Let me state for the record that the Irish FSA did a great job in bringing this scandal to light. And also that my apparently dismissive remark about a whole nation on Panorama was a shortened version (the first five words) of what I actually said: “That’s the Irish, isn’t it: they use a different test.” Which they did.
That’s what happens when 90 minutes of aggressive questioning on camera gets boiled down to 90 seconds on TV.
I also knew that I would win no friends by pointing out that school and hospital meals don’t come with the list of ingredients that you will find on the back of every retail pack, or that in my experience of the foodservice industry the main thing driving public sector purchasing decisions is price.
The subsequent widening of the horse meat scandal to affect everyone from pubs and restaurants to school caterers simply underlines my point that the Government was wrong to present their response as being all about calling the big retailers into the headmaster’s study and giving them a proper ticking off.
Whatever some publicity-hungry MPs might like to suggest, food retailers are not in the business of misleading or defrauding the public. Any retailer that loses the trust of its customers has no future, and no one in their right mind would put that at risk by cutting corners.
Which is why I am confident that customers can go on trusting British supermarkets to keep aiming for the highest standards and doing their very best to bring them decent food at prices they can afford.
The real value of a fat cat's £1m bonus
Businesses should be seen as the heroes that pay this country’s bills, says Malcolm Walker .
February 1, 2013.
I know a fat cat who earned a bonus last year of £850,000. His employers paid 12.5% national insurance on that so the bonus cost them about £1m. The fat cat then paid 50% tax, leaving him with £425,000.
He decided to spend it all on a boat. The boat actually cost £350,000, the rest was 20% VAT.
The cost of the boat was 60% labour, on which the boat builder paid income tax and national insurance. Plus council tax, and corporation tax on the profit he made at the end.
The fat cat’s 20 friends in the pub were secretly outraged at his extravagant lifestyle. All were either unemployed or worked for the state as teachers, firemen or council workers.
They didn’t realise that their salaries were being paid from the money the Government had taken from the fat cat’s bonus.
The boat builder was in the pub as well and was grateful for the order that had saved his company from going under and kept his employees in jobs. He bought the fat cat a pint but used his company credit card so had to declare it and pay yet more tax.
The fat cat was pleased with his boat but he needed to employ a captain and a cleaner and had to pay tax on the fuel to run it. So he needed another bonus the following year and his 20 friends also needed him to - they just didn’t realise it.
But the politicians in power wanted to stop such excessive bonuses. They had an election coming up and were thinking about the 20 votes in the pub.
That’s my attempt at a parable, but it’s not far from the truth. What is true is that there seems to be an anti-business agenda growing in the UK. When millions are employed by the state or don’t work at all, there are precious few of us left to create the wealth and pay the taxes needed to run the country.
Businessmen should be seen as heroes, not vilified. They work long hours and risk everything, and any personal reward is always recycled back into the economy.
Years ago I employed a very bright guy, highly educated and respected. It took me a year to get him to join.
Three days into the job I sat in his office and he told me his plan. He’d made a list of 100 priorities. My stomach turned over and I knew I’d made a terrible mistake. It was a moment of enlightenment.
Something similar happened recently. I was given a copy of a leaflet produced by Cheshire Fire Service. It was entitled Using Your iPad Safely? It contained gems such as “Don’t walk about using your iPad - you might bump into something” and “Take a rest every 20 minutes or you might get cramp in your hand.”
It was another moment of revelation that things have gone too far. Anyone employed by the state to write tosh like that is stealing my tax money that could be better spent employing an NHS nurse. They are surplus to requirements.
None of us minds paying taxes that are spent wisely. But the Government machine is run by people who have never had to pay the wages at the end of the week, and also have to get re-elected.
It’s like running a public company. It’s PR and results today that keep the share price afloat. Never mind the long term. Anyone who cares for our future prosperity should take a close look at how successful private companies do things, and remember that we ultimately rely on thriving businesses to pay our bills.
Reckless gurus walk on thin ice
For those presiding over failure, delusion and reality are often poles apart.
December 21, 2012
Self-delusion can carry you quite a long way in life, but not right to the finish.
That’s the conclusion I reached after gamely signing up for the Iceland Antarctic Expedition to the South Pole, in the mistaken belief that I am still only 34.
Although I knew we were re-enacting the tragic Scott expedition of 1912, I hadn’t anticipated playing the role of Captain Oates. Luckily technology has come on a bit since his day, so when I was taken seriously ill I only had to walk out of our tent as far as the small ski-plane summoned by satellite phone to airlift me back to base.
I did think I was going to die, though. More worryingly, I found out afterwards, so did the seasoned explorer leading the expedition.
I blame the food. We took Iceland ready meals up Everest last year and everyone was fine. For the Antarctic, keeping down the weight we had to drag behind us meant we were on dehydrated rations that were totally inedible. Which is a bit of a handicap when you’re burning 8,000 calories a day pulling a sled across the ice.
Particularly if you were only a nine-stone weakling to start with.
I think I might add a chapter to our website about it. We could call it The White Ages, to match our popular section on The Dark Ages: the four years when I was away from the business from 2001 to 2005.
There was a lot of self-delusion then about how a great recovery plan was about to kick in, but for one reason or a hundred it never happened.
There are people out there deluding themselves - and sadly others - that they are retail gurus when they have never actually run a retail business. Though they are obviously a great deal less dangerous than the serial wreckers of companies who have somehow convinced themselves they are ideally placed to hand out advice to others.
When we got back to Iceland seven years ago, to a business that had been screwed up in almost every conceivable way, we turned it around by following three very straightforward precepts: focus, simplicity and accept reality. That’s probably the only advice any retailer actually needs.
Following these principles has enabled us to protect and create a total of 24,000 jobs, made us The Sunday Times’ Best Big Company To Work For in the UK, kept our customers happy and generated more than £500m in tax revenues for the UK Treasury.
Not bad for a business that could not get credit insurance and was teetering on the brink of bankruptcy when our Icelandic friends came to its rescue.
I’d call that a success. The Iceland Antarctic Expedition was a success, too. The rest of the team, including the three wounded soldiers at the heart of it, made it to the Pole and we are on track to raise more than £1m for two great charities, Alzheimer’s Research UK and Walking with the Wounded.
As for me, I went as far as my body would take me, as I did when I got to 23,000 ft on the North Col rather than to the summit of Everest last year.
Maybe it’s self-delusion not to see that as failure, but it’s nothing to the self-delusion of those who seem blind to the fact they have run businesses into the ground and threatened or destroyed the livelihoods of thousands.
They need to accept reality. I really must remember that excellent advice when someone comes up to me and asks me to join the great Iceland Lunar Expedition of 2013.
A tax on fun is no joke for business
Taxing corporate morale boosting events will not revive the economy.
November 2, 2012
Probably the best thing about running a private company is being able to take the right decisions for the long term, without having to worry what this will do to profits or your share price in a City obsessed with the next quarterly results.
At Iceland, our biggest single strategic decision has been to focus on looking after our colleagues in the business, ensuring that they are happy and motivated. The logic is that they, in turn, will look after our customers well, and that will drive sales and profits.
We must be doing something right, because this year we were named by the Sunday Times the Best Big Company to Work For in the UK and nearly 95% of our staff tell us that they enjoy working for Iceland and would recommend us as a good employer.
A major component of this stellar rating has been our insistence that there is no conflict whatsoever between doing a great job for our customers and having fun. At Iceland, we believe in fun.
In pursuit of this, we have invested millions over the past seven years in giving our store managers and head office staff the best conferences money can buy: unique, mind-blowing events that bring them back to the business buzzing and hungry for more success.
I truly believe that this has been a key driver of our last seven years of strong profit growth, which in turn has enabled us to pay over £500m in UK tax, National Insurance and duty [see our chart: Iceland’s UK Tax Payments 2006-2012]. Not a bad return from a business that was teetering on the brink of bankruptcy when I came back to it in 2005.
You might think that the Government would be keen to learn from this success. Instead, they seem determined to do their utmost to snuff out the fun in business by taxing as a benefit in kind any corporate event that might be considered enjoyable.
So you are probably all right to fund a team-building exercise involving some oil drums, planks and ropes on a freezing fellside in the Lake District. But God forbid that you offer the survivors a hot meal plus a few drinks while they chew over the experience in the evening, or the taxman will demand his cut.
Yes, I know we all hate bankers, tax exiles and the others whose fancy footwork means that they don’t pay their fair share to the Exchequer. But if the Government actually wants to encourage businesses to grow and lift the economy out of recession, there could hardly be a worse way to go about it than by launching a nit-picking attack on fun.
Particularly when the Olympics and Paralympics have just demonstrated so spectacularly that one thing Britain is really good at is staging world-class events that make people feel good.
The British events industry employs over half a million people and they tell me that it contributes over £36bn a year to the economy. So why would anyone in their right mind want to jeopardise it by insisting that the only way businesses can legitimately communicate with their employees and motivate them to succeed is by ensuring that they have a thoroughly miserable time in the process?
It’s a mean, short-sighted approach that sadly seems to be symptomatic of a wider anti-business agenda in Government. I am not defending perks for fat cats here, but the right of ordinary workers to have a bit of fun. Or, as David Cameron might put it, spreading privilege.
Because why shouldn’t everyone in any organisation enjoy their work as much as those at the very top?
A new adventure that’s poles apart
The North Pole and Everest are under his belt. Now the South Pole is next.
August 10, 2012
I must be mad. I’m 66, a billion pounds in debt, and I’ve just signed up to drag a sled weighing considerably more than I do 140 miles across the Antarctic ice sheet to the South Pole.
Obviously it’s all in a good cause. This is the centenary of Robert Falcon Scott’s ill-fated Polar expedition and the noble self-sacrifice of Captain Lawrence Oates. As the team made its painful trek back after finding Roald Amundsen’s Norwegian flag already at the Pole, Oates became convinced that his slow progress – the result of a wound he had suffered in the Boer War – was threatening everyone’s survival. So he famously walked out into a blizzard with the words: “I’m just going outside and may be some time.” It did not save his companions, but it earned him a place in the pantheon of great British heroes.
This November, three more wounded heroes from Oates’s old regiment, the Royal Dragoon Guards, will be heading for the Pole in an expedition led by David Hempleman-Adams and Justin Packshaw, who were both in the successful summit party on our Iceland Everest Expedition last year.
Packshaw is a former Royal Dragoon Guards officer, and an absolute master of the art of persuasion. Or possibly just an outstanding hypnotist. Because I still don’t really know how it happened, but somehow I found myself agreeing not only to write a cheque but to join the expedition in person.
This will come as a surprise to anyone who followed my Everest blog last year, and therefore appreciates that my real comfort zone is a five-star hotel. Of course, I am a seasoned Polar explorer, having already visited the North Pole a couple of years ago with my pal Lord Kirkham. In fact, this is all his fault, because that was where I met David Hempleman-Adams and the idea of climbing Everest first came up.
Getting to the North Pole only involves a ride on a clapped-out Russian helicopter. Everest was the real deal: a genuine adventure that took me right to the limit of my endurance. But the South Pole sounds even worse: battling across difficult terrain at -40°C with no home comforts like the food and drink I took to the Himalayas, and no Sherpas to do the heavy lifting. All to reach a goal that Scott memorably summed up in the immortal words, “Great God! This is an awful place”.
But this trip isn’t all about remembering the heroism of the past. It’s about honouring the heroism of the young men and women who are wounded in action while serving in our armed forces today. ‘In the Footsteps of Legends: the Iceland Antarctic Expedition’ will be raising money for two massively important and deserving causes: Iceland’s established charity partner, Alzheimer’s Research UK, and Walking With The Wounded, which helps to fund the re-education and retraining of injured service men and women.
The stars of the expedition will be three young men who have fought their way back to serve with the Royal Dragoon Guards after being blown up or shot on active service. Mine is just a walk-on part, and I only hope I don’t prove to be the Captain Oates figure who slows everyone else down.
Because, while I don’t much fancy spending 14 nights in a tiny tent in a howling blizzard, I have absolutely no intention of stepping outside for any time at all.
If you would like to make a donation, please visit Malcolm Walker’s JustGiving page at www.justgiving.com/mcwalker
Iceland: why I’ve bought the company back
Iceland tycoon Malcolm Walker on why staff and customers keep him going.
March 16, 2012
This time last year I was doing my final training in the Alps before heading for Mount Everest.
In 2012 my colleagues and I have just taken on a £1bn mountain of debt to complete the purchase of Iceland the company from Iceland the country. Like reaching the North Col last May, it has been a long, hard slog but it feels fantastic to have achieved our goal.
Why have I done this at an age when most people are congratulating themselves on paying off their mortgage, and developing a close acquaintance with their carpet slippers? Well, as I have noted before, we are all mad at Iceland. But there are some perfectly sane reasons, too.
First, there are our 23,000 staff, who recently had official confirmation from The Sunday Times Best Companies Awards that they work for simply the best big company in Britain.
Be honest, did you believe that when you read it? Would you even have put Iceland on your shortlist of best retailers, never mind the best company full stop?
But it’s true. Our staff love working for Iceland, because we have put a huge amount of effort into improving their pay and conditions and, just as importantly, ensuring that they can do their jobs with the minimum of stress and the maximum of fun – an ingredient far too often overlooked in management handbooks in my opinion.
One thing is for sure. Allowing Iceland to pass into the hands of private equity players focused on short-term financial performance would have meant that it did not stay the best place to work for very long.
Then there are our customers – 5 million of them a week. Hard though it may be for the Waitrose-shopping, London-based media to believe, they love us too.
They would have missed us if we had succumbed to a break-up bid from one of the big supermarkets, or a venture capitalists’ takeover that would have changed our character. Someone tried to make Iceland into a different sort of business when I was away for a while a few years ago, and the customers quickly voted with their feet.
Last and rightly least, there are personal considerations. I haven’t had a boss since Mr AV Green of Woolworths gave me the sack in 1971. Now doesn’t seem like the time to change the habit of a lifetime and start taking orders from someone else – particularly about a business I think I know quite well by now.
So how will you be able to tell the new Iceland from the old one? Well, it won’t be easy, because we’re not planning to change it. Our breathtakingly boring strategy can be summarised in four words: more of the same.
More innovation in products, more great value, more shops. For the last seven years we have focused on doing the right thing for our staff and our customers, and good financial results have followed as if by magic. As top secret formulas go, it’s one of the simplest and most effective you will ever find. Why not give it a try?
If you reach the top of Everest, the really difficult part begins: getting down without killing yourself. When you reach the top as the Best Company to Work For, there are hundreds desperate to take your place.
I don’t think anyone has ever held the title for more than one year, but we are going to try our hardest to stay on top. Because happy staff make happy customers, who in turn make happy investors. And what could be better than that?
Fiddling while Rome burns
Retailers suffer at the hands of bureaucrats and get nothing in return, says Malcolm Walker.
December 16, 2011.
Last week I received a two-page letter from some MP complaining about the danger of the flame height on disposable lighters that don’t comply with EU regulations.
Personally, if you’re a smoker, I think the flame height of the lighter is the least of your concerns. But it is symptomatic of the widespread belief that almost everything that goes wrong in this country can be put right by heaping yet more regulations on the retail trade.
If a hooligan throws one of my shopping trolleys into a canal, it’s obviously my fault. It is a criminal offence to sell a 17-year-old a knife and fork so if he stabs someone rather than using them to eat his dinner, the retailer must be to blame.
And the drunken yobs roaming our town centres can only be down to the shopkeepers who sell them alcohol, not to any more general failings of education, parenting or society as a whole.
In June 2009 I wrote a column here about the ludicrous code of practice that Jacqui Smith put out for consultation on alcohol retailing. It included requirements for live radio links to the local police, direct lines to taxi operators ‘to get the public home safe’ and a dispersal policy to prevent disorder. Honest: I’m not making this up.
It has not got any better. That d(r)aft legislation was not enacted but new conditions were introduced in February last year and now every one of our stores has to have a DPS (Designated Premises Supervisor) present at all times when alcohol is sold. They have to pass an external exam to qualify. Frankly this seems to be about as much use as a speed awareness course.
The local licensing authority can add all kinds of bizarre conditions to the licence including cameras to monitor the street outside and door supervisors, even though we are a family-friendly food retailer, not a nightclub. The penalties for non-compliance are severe. Till operators can be fined £20,000 and face up to six months in prison.
Even liqueur chocolates fall into the category of restricted products. Test purchases are carried out by local trading standards with all the zeal that you might expect them to bring to bear on attacking drug dealers.
Selling alcohol to a 17-year-old who looks 20 will bring down all the wrath of the law but if that 17-year-old steals the alcohol it’s only a misdemeanour and the police won’t attend.
Just how much use was any of this regulation in stopping this summer’s riots, which trashed several of our stores? An episode in which the police proved no quicker to intervene than they are in the everyday, smaller scale looting that is the bane of every shopkeeper’s life.
When I came back into Iceland in 2005 it was facing bankruptcy. Our plan for rescue wasn’t a complex five-year plan but just three basic principles: focus, simplicity and accept reality. It has served us well and the Government could not do better in this time of crisis than by adopting those same three principles.
Focus on what’s important, cut out stupid bureaucracy and wake up to the reality that Government is far too tolerant of people who steal and scrounge, and takes those of us who pay our taxes and obey the law too much for granted.
At the risk of sounding like Jeremy Clarkson, if I were in power I’d stop worrying about dodgy lighters and start taking some action on those anti-capitalists on benefits camping outside St Paul’s. Something involving water cannon springs to mind.
No news like good news
Doom sells papers, but why is it always at the expense of good news, asks Malcolm Walker
October 28, 2011
Why are we so addicted to bad news rather than good? And why do we give so much more credence to unauthorised leaks than to carefully drafted and vetted press releases?
In some ways I suppose it is lucky that we do have a taste for doom and gloom. Because in the absence of overpopulation, global warming, ironically rising fuel bills, the euro crisis, unemployment, threats of depression, protest movements, wars, terrorism, neglect of the elderly and dodgy ministerial advisers, there might be nothing left to fill the newspapers apart from PR-fuelled grocery price wars.
But it is a bias that can make life a bit frustrating for those of us who are essentially in the good news business. Everyone expresses amazement when I point out that Iceland has increased its profits in 36 out of the 37 years I have been in charge. Yet a company which makes a profit warning will find that it is etched on memories forever, and that it will take years before it again achieves a mention that does not include the adjective “troubled”.
This spring I joined the successful Iceland Everest Expedition, to almost universal indifference. The only time we made it to a single front page was when a lorry crash made it look like we might have to call the whole thing off. My lugubrious PR adviser did tell me that he might secure a few more column inches if I got killed in the attempt, but I had to inform him, with regret, that this went far beyond the limits of what I was prepared to do for publicity.
In the last few weeks Iceland has put out two genuinely good news releases. One was on our inflation-busting 6.5% pay award which, to general incredulity, makes Iceland’s retail staff the second best paid on the high street. The other marked our passing of the £1 million mark in fundraising for our charity of the year, Alzheimer's Research UK. Neither was deemed of any real interest outside the always comprehensive pages of Retail Week.
The appetite for leaks, on the other hand, is almost insatiable. Nearly every weekend for what seems like months now thousands of trees have been sacrificed to print updates from nameless sources on the progress of Landsbanki's and Glitnir's planned sale of their Iceland shares. No matter that many of these stories were entirely inaccurate; or that they concerned a private company with just seven shareholders and no debt, which should surely limit our potential interest to outsiders.
Does it matter? Yes, because it unsettles our hard-working staff and loyal customers, most of whom don’t read the City pages but do hear exaggerated third-hand rumours based on their stories.
Despite this, the good news keeps coming, as surveys report that Iceland and the discounters are increasing their market share at the expense of the big four supermarket retailers. Do we get a pat on the back for our brilliant strategic positioning and superb management? No, we are told that we just happen to be in the right place as consumers trade down.
Would we absolved from blame and permitted to point out adverse market conditions if our sales were going the other way? Of course not, it would be management's fault and we would be ridiculed for our pathetic "excuses".
I know life's not meant to be fair, but wouldn’t it be nice, every now and then, to turn the page and read a positive news story that gave a little credit to those who made the good things happen?
It’s time for zero tolerance
The authorities have turned a blind eye to retail crime for too long, says Malcolm Walker
August 25, 2011
As David Cameron and Theresa May found out the hard way, August is never a good time to go on holiday. It’s the month when wars break out. Though even I was surprised to find battle being joined on England’s high streets, with many Iceland stores in the front line.
There is quite simply no excuse for this. We are not living under an oppressive dictatorship, or in unbearable poverty. Living standards in this country have improved out of all recognition since I started Iceland in 1970. The sad fact is that standards of education and behaviour have moved just as sharply in the opposite direction.
Interviews with the louts who trashed our city centres, and with the parents who failed to control them, usually revealed a depressing inability to string a simple sentence together. For them, reading or writing would no doubt represent a challenge of Everest proportions.
This is an all-round failure: by teachers, politicians, the police – and by the rest of us for failing to put our feet down years ago and demand change. I have written before about the utter wrongness of treating shoplifting as a minor, victimless misdemeanour. Our store staff are regularly terrorised by individual shoplifters and gangs, yet find the police almost always “too busy” to turn up to do anything about it.
It’s just a change of scale to have thousands smashing windows, clearing whole stores and then burning them down.
Yet I detect no reluctance to enforce the law on those who are unlikely to fight back. Only last week a local authority found the time and resources to send a 17-year-old stooge into one of our stores to buy alcohol, which will land one of our checkout assistants with a criminal record for mistakenly selling her a bottle of wine.
In North Wales, where we have our head office, the last chief constable was dubbed “the Mad Mullah of the traffic Taliban” for his zero tolerance approach to speeding motorists. Doing 34mph in a 30mph zone still invariably results in prosecution, and I regularly see five patrol cars within a mile monitoring the traffic on my journey home.
Yet where were the police when terrified retail staff were trying to barricade themselves inside their stores as frenzied mobs rampaged in the streets outside? Hanging back because they have had it drummed into them that these days they are a service, not a force?
I know that many people see Iceland as an advertisement for management continuity, and it is certainly true that it wasn’t a conspicuous success when I took a period of enforced leave for the four years before 2005.
But we’re far from a closed organisation and would never have thrived as we have done if we were not receptive to new ideas and new blood from outside.
The police too could do with a firm reminder of just what they are there for, and some fresh thinking on how to achieve results. If that means breaking up their insular closed shop and importing some expertise from the US, it certainly gets my vote.
It’s high time for a zero tolerance approach to theft, criminal damage and abusive behaviour in Britain’s shops. So let us all hope that David Cameron has got the message from the events that dragged him back from Tuscany.
That way we will be able to look back on the riots of August 2011 as having a positive outcome: making politicians and police alike finally twig that crime against retailers really is crime, and that it matters.
Iceland is not for sale
Vultures are supposedly circling, but Iceland is fighting fit and battle-ready, says Malcolm Walker
June 24, 2011
I used to think that there could be few things worse than lying ill in bed and overhearing plans being made for your own funeral. But that’s easily capped by having the undertakers measure you up when you are fighting fit.
Imagine running a retail business that’s just reported record results, with like-for-like sales up more than 50% over six years, 22,000 contented staff, no debt and cash in the bank. You’re driving strong growth in your core market through some really exciting product innovation, for which you have just won another clutch of awards.
That’s exactly the position of Iceland today – except that our contented employees are becoming increasingly nervous. Because whenever they pick up a newspaper, they read another story that says their company is up for sale and about to be broken up.
Every time it happens, our head office is swamped by a tidal wave of staff seeking reassurance, and customers offering us their support in the battle to “Save Our Iceland”.
And we have to tell them that there is no war. The company is not for sale. Yes, our largest shareholder has said that they intend to market their stake, but so far all they have done is appoint some advisers. All the rest is pure speculation and media froth.
It would not be so bad if the stories were about other retailers hoping to get their hands on an iconic and successful British brand. But they’re not. They’re all about their desperate desire to buy some or all of our 796 sites to fuel the expansion of their convenience store formats.
There are two ironies here. First, surveying the wreckage back in 2005 and unsure whether we could turn the business around, we invited the other food retailers to take a look at our store portfolio. After protracted research, M&S bought 28 of them (some of which they have since handed back) and Sainsbury’s took one – as a gift.
The second irony is, of course, that one of the root causes of the Big Food Group crash was trying to turn Iceland into a convenience store.
I don’t believe for a second that Iceland has had its day, any more than I have. There are two ways to go when you hit 65, as I did earlier this year. Buy a reclining chair, study the Saga holiday brochure, allow hair to sprout from unlikely places and cultivate a paunch; or challenge yourself to keep going by doing stupid things.
Believe me, there are few crazier ideas than climbing to the North Col of Everest in an expedition organised by David Hempleman-Adams. But the good news is that I am not only still alive but fitter than I have ever been. The stone I did not actually need to lose is gradually coming back, in an enjoyable way, and my hunger and passion for the business is greater than ever.
The Duke of Edinburgh kindly served as Patron of the Iceland Everest Expedition, and I am taking him as my role model: I’ll maybe think about slowing down a bit when I turn 90.
We celebrated Iceland’s 40th anniversary last year and I have got one hell of a party planned for our Diamond Jubilee in 2030.
If that means doing battle with giants, whether of retailing or finance, so be it. Bring it on. Once you’ve pranced around dressed up as a Yeti at Everest Advanced Base Camp, everything else in life is a doddle.
Making your own luck
As he climbs up Everest, Malcolm Walker says success is all about determination and luck
April 21, 2011
There can be few less enjoyable experiences in life than seeing your treasured possessions driven over a cliff (unless your mother-in-law is behind the wheel of your new Ferrari at the time).
It’s happened to me twice, now. Most recently when one of the two lorries laden with our Everest kit veered off the road in a thunderstorm and plunged down a ravine, smashing it into the sort of splintered mess you only see in films and think that the special effects people have gone completely over the top.
Luckily the three people in the cab all jumped clear in time.
We’d packed everything into the plastic barrels that will ultimately take our supplies by yak to Advanced Base Camp. These seemed quite resilient. And, of course, there was only a 50% chance that my own stuff would be on the wrecked truck.
But with the sort of good fortune I suppose you should expect if you sit 13 people down at your farewell lunch, one of my personal barrels turned out to be squashed flat under the lorry’s wheels.
The amazing thing, when we finally got it out, is that nothing inside was too badly damaged. I certainly fared better than other blokes who had their stuff drenched in kerosene.
It was one of the nicest surprises I have had since I came back to Iceland in 2005, after the business I founded had also been pretty much driven over a cliff. I gradually realised that it could not only be turned around - which seemed pretty unlikely at the outset - but taken to new heights.
The principles we followed to do that were straightforward: simplification, focus, accepting reality and hopefully having some fun.
I’m trying to approach Everest in the same spirit, though fun has been in short supply since we crossed the oxymoronically named Friendship Bridge from Nepal into Tibet. Here you consider yourself in luck if you don’t have to share your freezing hotel room with a rat, and the pure Himalayan air is rendered so acrid by burning yak dung that facemasks are de rigueur.
As well as continuing our acclimatisation to high altitude, this is helping to toughen up those members of the expedition who have grown used to the finer things in life - me, basically. The experienced climbers in the party seem to get a kick out of roughing it.
But like Tesco, Asda and the rest back home, these super-fit ex-paratrooper types also bring out my competitive side, helping me to achieve the seemingly impossible.
So far my highest summit has been 4,400 metres, which seemed a long way up to me but is still only half the height of Everest.
Iceland keeps climbing up the ‘Best Companies to Work For’ table, reaching
number six this year. None of the big food retailers even features. Whether in business or the Himalayas, we are unashamedly aiming for the top.
I’ve heard rumours that Landsbanki is putting its Iceland shares up for sale while I am away (in the internet cafes of Tibet, they talk of little else). But if Graham Kirkham can close the sale of DFS from the North Pole, being up Everest should present no problem.
I’m just focusing on getting as high as I can and raising that £1m we have pledged for research into early-onset Alzheimer’s disease. It’s a truly great cause and we’re currently just 3% of the way there, so do pay us a visit at www.icelandeverest.org.uk and press the ‘donate’ button.
A different mountain to climb
I’ll climb Everest for charity or die in the attempt, says Iceland chief Malcolm Walker
February 25, 2011
I’m not much of an adventurer, unless you count my adventures in business. I enjoyed Scout camps as a boy but these days I prefer five star accommodation.
OK, I went to the North Pole with Lord Kirkham and that always impresses people until I confess it was in a helicopter - though we did spend a night in a tent on the ice at -30C.
I’ve sailed the Atlantic (twice), both times in November. People imagine that might involve rough seas and howling gales, but the reality was smooth crossings at a warm latitude with crew. I was a tourist really.
But three weeks ago I climbed Kilimanjaro. “A charity walk,” said my brother (from his armchair.) It was physically tough. About 50% of people who try it fail due to altitude sickness. The real problem was the squalor of the campsites along the way.
Our tour leader for the North Pole was David Hempleman-Adams, the explorer. We got talking about his exploits and in particular about when he climbed Everest 20 years ago. It’s probably the toughest challenge on earth. Many people die trying.
I’m writing this on my birthday and am in denial about my age, so I’ve decided to climb Everest myself in order to prove I’m still young. Well, not to the top, exactly. It’s 29,000ft and considering my age and experience, that would be suicidal.
Other will reach the top but I want to get to a point called the North Col at 23,000ft. My son asked to come, which I’m not happy about, considering the risks, but I’ll be glad to have him with me.
I have no doubt this is the biggest challenge of my life. It’s now turned into The Iceland Everest Expedition 2011. We have eight experienced climbers with us, led by Hempleman-Adams, and our intention is to plant an Iceland Foods flag on the summit of Everest.
The reasons for failure of such expeditions are usually bad weather, altitude sickness, or a bad stomach, which can be life threatening at 25,000ft. That’s why we are taking a 60-day supply of hygienically prepared, high calorie Iceland food.
Iceland has a proud record of raising serious money for charity. We prefer to help less fashionable and badly funded charities where we can make a real difference.
Alzheimer’s will soon affect a million people in the UK and almost every family is touched by it. The tragedy is that it’s not just old people who are affected. Early-onset Alzheimer’s ruins the lives of people in their 40s and 50s. There is no cure and little research is carried out into the disease. I want to raise at least £1m - hopefully much more - to sponsor research by internationally renowned neurologist Professor Nick Fox.
Please visit our website, www.icelandeverest.org.uk, our website, to find out more and donate. I leave at the end of March and will be writing a blog. Sir Philip Green blagged £25K out of me at a Retail Trust dinner but he’s already promised to sponsor me. I just hope it’s pro rata to our respective bank accounts.
Come on Tesco, Sainsbury’s, Asda and Morrisons - please help us with a big donation. After all, a quarter of the people over 60 who climb Everest die in the attempt, so there’s a powerful incentive for you to help me on my way.
Entrepreneurs are not villains
The role of business in generating prosperity still isn’t recognised, says Malcolm Walker
November 12, 2010
Next week I’m hosting a bit of party to mark Iceland’s 40th birthday.
On the very day that we opened our first shop in Oswestry in 1970, about 350 people will be celebrating at a charity ball that aims to raise close to £1m for Help for Heroes (H4H), Iceland’s Charity of the Year.
We’ve already held a party in Birmingham for 1,650 of our staff, at which we gave H4H a £774,000 cheque raised during our annual charity week in the stores. The generosity of our employees and customers is astonishing and humbling, particularly in the current economic climate.
No one can dispute that the young people who are going out to Afghanistan and coming back minus limbs are heroes, even if we don’t all agree with the Government’s reasons for sending them in the first place. It was always so. Back in 1970, the army had recently been deployed in Northern Ireland and was soon to suffer its first fatality there.
Some things do change for the better in four decades. It is hard to remember that fridges and freezers were luxuries then, colour TV a rare and expensive novelty, and the internet unheard of.
But other things just seem to repeat themselves, like the threats of union disruption after the ejection of a Labour government (by the Conservatives then, and the coalition now).
It troubles me that one of the main things that does not seem to have changed in all these years is the British attitude to business. Sure, we now have TV programmes like The Apprentice and Dragons’ Den, but in many ways we remain conditioned to look down in a Downton Abbey way on those who are “in trade”.
I left school at 16 and became a retailer; my three children all went to university. And every student I meet these days seems to aspire to be a management consultant, accountant or lawyer - a well-paid, respectable profession. Which, I’ll admit, may well look like the safest way to pay back the ever-increasing debts with which they are being loaded to get a degree.
But there is another way: entrepreneurship. As the public sector prepares to shed half a million jobs, it is entrepreneurs that this country will need to take up the slack.
Since Iceland was founded, I reckon that we have provided jobs for more than a quarter of a million people directly, plus many thousands more at our suppliers.
Totting up our bills for PAYE and corporation tax, we have also handed over
to the Government about £1.75bn in taxes. That’s enough for 30 new schools, seven hospitals or more than half an aircraft carrier.
Back in the 1970s envy and resentment were powerful forces in society. Drive an expensive car and it would not be long before someone ran a key down the side. Ted Heath bemoaned “the unpleasant and unacceptable face of capitalism”. Forty years on, Business Secretary Vince Cable uses his speech to the Liberal Democrat conference to attack capitalism itself.
I worry that we might have learnt nothing during the Iceland’s lifetime. Because one thing is sure: if this country is going to pull itself out of its present economic mess, it needs to recognise that entrepreneurs are heroes, not villains.
We may not be risking our lives on the front line for Queen and country, but without successful wealth creators there will be no armed forces, no infrastructure and ultimately no society worth defending.
The great fresh food myth
Middle class prejudice against frozen food is based on ignorance, argues Malcolm Walker
September 10, 2010
Last time I promised to explain how Iceland leads the way in healthy eating. The answer is really simple: freezing is God’s own way of keeping food fresh.
Freezing is a natural process that doesn’t involve pumping products full of artificial preservatives or flushing their packs with gas. It locks in vitamins and flavours.
If you don’t believe me, tonight make yourself a chicken casserole with the finest fresh ingredients. Then put half of it in the fridge and half in the freezer, and see which of them you would prefer to eat in 10 days’ time.
The crazy thing is the way that the supposedly educated middle classes have allowed themselves to be persuaded that ‘fresh is best’ and are prepared to pay a hefty premium for ‘fresh’ food that has actually been in the supply chain for as long as that casserole. How often do you buy a fresh ready meal, fail to eat it, then bung it in the freezer when it reaches its use by date? We’ve all done it. But what is the psychological block that stops us buying a frozen ready meal in the first place?
Like most ideas, ‘fresh is best’ contains a grain of truth. Nothing tastes better, or is better for you, than the vegetables you pick from your own garden or the fish you catch and cook yourself.
But if those options are not available, why would anyone pay extra for ‘fresh’ fish that could have been hanging around on the trawler, dockside, wholesaler and supermarket counter for a full 12 days? The fish frozen as soon as it comes aboard the good old factory trawler is much fresher in any meaningful sense of the word.
And any exotic fish or other seafood sold to you as ‘fresh’ will almost certainly have been frozen and defrosted before sale.
It’s the same with ‘fresh’ turkeys and hot cross buns. Can consumers really believe that they are all killed or baked the day before to meet these massive seasonal peaks in demand? Of course they aren’t.
Your hot cross buns will have been made in January and frozen, your turkey killed in October and put to rot gently in deep chill for three months.
I am incensed by the way the media always pick on the chicken nugget as the supreme example of junk food. At Iceland we are proud of our chicken nuggets, which contain chicken breast, breadcrumbs and, er, that’s it.
Yes, if you shop around I’m sure you can find retailers who sell rubbish, but we took every single artificial colour and flavour out of all our products more than 10 years ago - and every artificial preservative that could go without compromising customer safety.
Supposedly more upmarket retailers preen themselves now on taking out hydrogenated fats from their products: we did it by 2005. We were also in the lead in getting rid of nasties like mechanically recovered meat, just as we were the first national retailer to eliminate all GM ingredients (which the experts all told us could not be done).
I love food - it is one of my passions - and if I’m honest I’m highly unlikely to choose a plate of chicken nuggets for my supper. But if parents want to serve them to their kids, I will do my utmost to ensure that they can choose ones that are wholesome and nutritious as well as great value for money.
And if I can’t shoot, catch or pick the ingredients for my own meals, I’ll choose frozen every time.
The best of both worlds
We could use some of the US’s ambition, but they can keep their food, says Malcolm Walker
July 9, 2010
I am writing this on a plane heading back from the US after visiting a small Midwest town called Rochester.
My trip was for a routine health check and on the recommendation of Graham Kirkham and Tom Farmer I went to the best medical centre in the world - The Mayo Clinic. The experience reinforced all my beliefs and prejudices about the US.
The Mayo Clinic employs 50,000 staff including 3,000 world-class doctors. The buildings, the people, the organisation and the cleanliness are beyond the comprehension of those accustomed to healthcare in the UK.
The grand piano and the opera singer in the atrium are fit for a grand hotel. And everything else about the clinic impresses - from the clean-cut, educated, English-speaking staff to the state-of-the-art equipment, and the efficiency and politeness with which you are processed through. There is no waiting, no appointments for next week or next month - anyone you need to see is called and makes the effort to see you now.
The MRI scanner at the Chester Bupa hospital is a mobile unit on a lorry and is only there on Tuesdays. The Mayo has banks of them.
It costs money but the only complaint we heard from our taxi driver was about the Obama medical bill being forced through. He doesn’t want the government “screwing up health - leave it to private enterprise”.
Yet for a city built round a hospital with the most advanced healthcare in the world, a remarkably high percentage of the local residents are fat. Not just fat, but grossly obese to the point where they can’t even walk properly.
The restaurants in town had the most amazing staff in the world but the food they served was dire. It is not possible to eat healthily. Most of the protein comes in bread buns and if it doesn’t you have five choices of sauces. The portions are enormous and even upscale restaurants offer a take-out box for any leftovers. Why?
Bizarre contradictions abound. Eating a breakfast in the Mayo hotel should guarantee the clinic a customer for life: even the French toast is deep-fried. The Mayo has the most accurate and sophisticated brain scanners but the hotel internet wouldn’t work.
The US is the economic powerhouse of the world, a nation of entrepreneurs whose self-reliance and confidence leaves us for dead. The saying went that in the US a man sees someone drive past in a Rolls-Royce and thinks “one day I’ll have one of those” whereas in Britain he thinks “bastard”.
And it certainly used to be true. When I acquired my first Porsche in the early 1980s I parked it away from the office as I was embarrassed if the staff saw it. That didn’t stop it being scratched on a weekly basis by the local residents.
People also say: America today, Britain tomorrow. I just hope we can import some of their drive, ambition and can-do attitude and leave behind the food and the resulting obesity.
Having said that, it’s here already and I blame not the US but whoever abolished domestic science at school. That is actually the root cause of many of our health and social problems.
And that comes from me - the ultimate purveyor of chicken nuggets. But in my next article I’ll explain why Iceland leads the way in healthy eating.
After all, my aim is to live to be 120 in perfect health - and The Mayo Clinic confirms that, so far, I am exactly on plan.
The retail Arctic Explorers’ Club
A little volcanic ash couldn’t dampen a birthday trip to the North Pole, says Malcolm Walker
April 30, 2010
Retail entrepreneurs can be a surprisingly generous lot. Sir Philip Green famously flew all his mates to a lavish birthday party in the Maldives.
I thought Lord Kirkham showed even more imagination when he called me some weeks ago to tell me he’d organised a birthday treat for me. “I’m taking you to the North Pole.”
I’ve known Graham for 30 years and he’s always had the capacity for the unexpected but this did seem a bit extreme even for him. I suppose he thought it might be an appropriate destination for me.
“Yeah right,” I said, but then realised he wasn’t joking when he explained we were going with the famous Arctic explorer David Hempleman-Adams. He’d also invited his pal Sir Tom Farmer, the Kwik Fit founder.
Any more information was in short supply until the kit list finally arrived. Scott of the Antarctic managed with leather boots and Harris Tweed but clothing technology has moved on.
Four hours in four different specialist shops saw me with base layers, mid-layers and outer shells made from fibres I never knew existed. I always get cold feet - literally - when it gets below freezing but inner socks, vapour barriers and outer socks would do the trick. It’s not often the advice and guidance from a young sales assistant could be a matter of life and death.
The trip was to take five days and I envisaged pulling sledges across frozen wasteland and possibly losing a few fingers to frostbite. More people have climbed Mount Everest than have ever been to the North Pole and this wasn’t something to be undertaken lightly.
Only two days before departure the itinerary finally arrived. It didn’t exactly make it look cushy but I was rather reluctant to dilute the admiration of my friends and family by showing it. The trip involved a four-and-a-half-hour flight by private jet to Spitzbergen, just on the Arctic Circle, followed by a two-and-a-half hour flight in a Russian jet to within 30 miles of the pole, and finally a half hour flight by Russian helicopter to land at the pole itself.
Spitzbergen is the size of Switzerland, with a population of 2,000 humans and 5,000 polar bears. It’s -25°c and the cold was a shock as we got off the plane.
We overnighted at the polar hotel and were warned not to leave the hotel without a guide with a rifle - polar bears are everywhere.
The Arctic ice cap is only a few inches thick but the Russians clear a runway for just four weeks every year and manage to land an Antonov S.T.O.L. transport plane to service their scientific research station. We spent the night at “base camp” in an unheated tent we erected ourselves. The temperature was -35°c. Surprisingly, no one was ever cold; the specialist gear did the trick.
The old Russian helicopter probably presented more of a risk than actually walking to the pole but we finally made it to the top of the world. We had a couple of hours taking photos and drinking hot punch before we finally retreated in the face of near frostbite and back to base camp.
Our journey back via Spitzbergen involved a stay several days longer than intended due to certain volcanic activity but we filled the time with long journeys into the wilderness each day either by snow mobile or driving dog sleds. Now, as fully paid up members of the Arctic Explorers’ Club, we are debating what to do next year.
It’s Kirkham’s birthday in December. I think I’ll just send him a card.
Sexy products are more interesting...
Entrepreneurs thrive on selling products that they find sexy, says Malcolm Walker
March 12, 2010
I always think that as entrepreneurs we fall into our respective companies pretty much by accident.
For most of us business is business and not often a hobby as well although of course in time, if we are to succeed at all, we become absorbed and even excited by our products.
That wasn’t the case with my first job as a trainee with Woolies. I hated it and wasn’t even much good at it, but I stuck at it for seven years.
I always had a few things going on the side and from my school days I used to book a church hall, hire a pop group and sell tickets for dances. I suppose I could have called myself an impresario. After finding a hall with a large capacity available on Saturday nights, I had a call from some guy called Peter Stringfellow who wanted to come in with me. How different life could have been.
Another venture with a Woolworths colleague found us trying to sell strawberries from a roadside stall one Sunday. He had his girlfriend and I had my wife with me. Not one single car stopped.
Peter and I hid behind a wall and left the girls to it. Within minutes cars were pulling in and we’d sold out within an hour. There’s a lesson there somewhere.
We spent the money in the pub that lunchtime and conversation got around to what to do next, which is how we came to open Iceland and how Woolies came to fire us a few weeks later. Now 40 years on I’m still running Iceland and enjoying it enormously.
I’ve been a member of my business club for years and it’s interesting watching the other members and the satisfaction they get from their businesses.
Lord Kirkham was a member for years and I’ve never seen anybody so excited by sofas. Well, maybe it’s not actually sofas but the business itself. James Timpson repairs shoes and cuts keys and is passionate about his company.
We have members who provide scaffolding, run landfill sites, build houses, make paint and dozens of other products that seem sexy to them but would be boring to others.
We meet with our wives and invite speakers to join us for dinner. Needless to say, whoever invited the chief executive of Manchester City Council couldn’t really have expected the same turnout as when Sir Stuart Rose came. He was funny and charming and scored a very high rating talking about his life and business.
On Tuesday night my fellow columnist Jacqui Gold agreed to speak. We meet in Manchester and don’t pay a fee so it’s remarkable to me how fellow entrepreneurs so generously give of their time to join with like-minded people and share their experiences.
Would anybody be surprised that Tuesday night was the highest turnout for ages? Maybe it was something to do with the champagne reception we held in the Ann Summers store near the hotel. Or the lingerie models passing round the canapés.
Jacqueline is a remarkable woman who gave a brilliant talk on her life and business. She runs a serious company and clearly enjoys what she does.
I guess that many of my business colleagues, much as they enjoy their business, would rather be involved with something else; manufacturing ski gear, selling boats or expensive cars.
But given the choice most of us might like the chance of running Agent Provocateur, or a 50:50 joint venture with Peter Stringfellow.
There but for the grace of God…
How a soldier turned vicar helped change Malcolm Walker’s mind on assisting ex-offenders
January 8, 2010
There we were, on safari in Botswana hundreds of miles from anywhere, when a new group walked into camp.
They looked odd. Everyone else we met on the tour appeared to have spent a fortune on the right gear but this lot weren’t dressed right.
One guy wore a black Armani suit and trendy shades; others wore the wrong sort of casual clothes. It turned out they were Christian millionaires from a church in Knightsbridge - they’d been giving away money in Rwanda and decided on a few days safari.
One guy looked different. Tough, with a lived-in face. It turned out he was their tour leader and an ex-soldier, ex-prisoner, ex-bad boy who found God and become a vicar.
I liked him and his life story was enthralling. His focus now is helping prisoners create a new life after release. I’m a lock them up and throw away the key sort of person - particularly with shoplifters - but I was amazed at what he told me.
A prisoner on release might have served five or 10 years. It’s difficult to readjust anyway but, chances are, when he walks out of the gate he has nowhere to live, no family and no job. He’s clutching all his possessions in a clear prison-issue bin bag.
Help is at hand though: he gets £45 and a rail warrant to where he was arrested. Not to where he actually wants to go, just to where he was arrested. If he applies for benefits they take six weeks to come through. So who’s surprised that the reoffender rate is 78%?
My new friend Paul the vicar has created a volunteer network who work in prisons and help those who want to lead a better life. They are met at the gate on release and fall into a support network that helps them find somewhere to live and keep on the straight and narrow.
It works. Their reoffending rate is 20%. The problem is these people can’t get a job and the self-respect that brings. If they could, it would help drive their reoffending rate even lower.
Instead, they can look forward to a life on benefits. We don’t employ anyone with a criminal record and I guess most other companies don’t either. “I can give them a job,” I heard myself saying.
Ironically, a couple of weeks after I got home the News of The World discovered that one of our contractors uses an open prison as a base to transfer boxes between vehicles. Instead of praising us for providing work for prisoners they decided some of them were probably drug users, so the angle was to “expose” us for hypocrisy after our little fall-out with Kerry Katona.
Well, at the risk of more bad press, Iceland is setting up a scheme with my vicar friend to offer ex-offenders placements.
During the past two years Iceland has raised more than £2m for charity - mainly Alder Hey Children’s Hospital. In a way, that’s an easy thing to do - conventional, respectable and laudable. Offering jobs to ex-offenders is more challenging and open to setbacks.
I actually feel quite good about this. Maybe we can help to change some people’s lives. Everyone deserves a second chance and I’m looking forward to the challenge that brings. Any of you want to join in?
Armbands on the Titanic
Appointing a grocery ombudsman will achieve nothing but cost increases
It’s a funny word, Ombudsman. Apparently it’s Old Swedish in origin, and Sweden established a Parliamentary Ombudsman as long ago as 1809. Ours did not arrive until 1967, but we have taken to this Nordic import as keenly as we did to Abba, and now have nine different UK Government-appointed Ombudsmen covering everything from housing to legal services, pensions to telecoms.
Please don’t let us take it into double figures by inflicting one on the grocery industry. Because the English word that springs most readily to mind in conjunction with that Swedish one is “useless”. You can’t raise an issue with the original Parliamentary Ombudsman unless you do it through an MP, and even then nearly half the complaints are rejected without investigation. Those that do make it through the obstacle course typically take 40 weeks to resolve.
The internet is riddled with criticism of the English Local Government Ombudsmen, mainly because all three of them are former council chief executives, suspected of sympathising with their former colleagues. My brother’s pension fund was shrunk dramatically by awful financial advice and mismanagement, but he could only obtain redress in court; the Pensions Ombudsman was not empowered to resolve his complaint, and could award only derisory compensation anyway.
What on earth does the Competition Commission hope to accomplish by asking the Government to impose an Ombudsman on the grocery industry? The only certain outcome will be more bureaucracy, frustration and cost.
The Government is always inclined to legislate for PR purposes in a way that puts a sticking plaster over perceived public concerns, but does not fix the underlying problem. Take, for example, knife crime. What do they hope to achieve by making it a criminal offence to sell a knife or even a razor blade to someone under 18? Any child can get a knife from anywhere – the kitchen drawer being the obvious place to start. And God help them if they need to start shaving.
When I was young penknives, a piece of string and a sixpence were standard issue for boys; I wonder how many Parliamentary hours would be devoted now to clamping down on my catapult.
The same tendency to knee-jerk legislative overkill is evident in the draconian crackdown on alcohol sales that I have already written about, and the infamous Dangerous Dogs Act.
Businessmen have to prioritise, but legislators seemingly don’t know the meaning of the word. Spending money on useless Ombudsmen and quangos apparently ticks all their boxes, while they happily skimp on such luxuries as helicopters and body armour for Afghanistan.
If a grocery Ombudsman is created, he or she will be there to fix a problem that does not exist; and, if it did exist, an Ombudsman would not fix it. All it will do is increase costs and therefore ultimately put up prices to the consumer.
There have been many enquiries by the Competition Commission in recent years into supermarket power, the alleged abuse of suppliers, and retail competitiveness in general. It has cost us all millions as both retailers and taxpayers, but never found evidence of a problem. Yet the notion persists that the Government needs to curry favour with the public by putting in “safeguards” that will prove as effective as a pair of inflatable armbands on the Titanic.
The plain truth is that all big companies (not just retailers) will often bully small suppliers. Big suppliers are equally likely to bully small traders. It is in the nature of negotiation, whatever industry you are in and indeed in most human relationships. In short, we are dealing with a simple fact of life that nothing is likely to change, and certainly not the appointment of an Ombudsman. The public interest will always be protected by this simple fact: retailers would kill each other for market share, and can only gain it by serving the public well and giving them what they want.
A victimless crime?
The police must recognise that store theft and assault seriously affect staff
August 21, 2009
Two guys are waiting in the car park behind the store. It’s dark and the manager comes out after setting the alarm and locking up.
The blokes come up behind him with a gun, force him back into the store and make him unlock the safe.
A variation could be the timing - maybe it’s early morning, or maybe it’s a knife instead of a gun. Sometimes the store is trading and in front of everyone a gun is pulled on the checkout assistant and the attacker runs off with a fistful of banknotes before anyone realises what’s happened.
It has been known for someone late at night to simply drive a stolen car right through the front window to gain access, but that’s not happened since we stopped selling cigarettes.
It’s a dangerous armed robbery but at least everyone knows where they stand. Head office is alerted, HR swings into action to comfort and counsel the staff, security at the store is reviewed and it’s sometimes reported in the local paper. The manager is in shock but always shrugs it off and gets on with the job - these guys are heroes.
Oh, and the police turn up. They never catch anyone but at least they turn up.
And here’s the amazing thing… it happens almost every week.
But can you believe, a bigger problem for us is the little old lady who steals a packet of cheese or the kids who nick a few sweets? That’s because petty shoplifting has been decriminalised - it’s not really a crime at all, is it? No one suffers, the shop can afford it. It’s victimless. The police aren’t interested and usually don’t turn up.
It’s a bigger problem for us than the armed robbery, because the “little old lady” probably has £60 worth of goods in her bag. She comes in every day and has already been banned from the store but we have no deterrent.
The “kids” are maybe 18 and stealing for drug money or already high on drugs. They come in gangs and the store manager is terrified of them. Maybe they’ll eat a bar of chocolate off the shelf in front of the manager and dare him to do something about it.
If he does he maybe gets attacked or spat at or threatened with a syringe.
Sometimes the manager “arrests” a shoplifter and insists the police turn up. Two hours later they still haven’t arrived and the manager is holding an increasingly agitated shoplifter in his office.
Our staff have to deal with this day after day - in some stores many times every day. More than once a fight has broken out and the police have arrested the store manager on the accusation of the “victim” - the shoplifter. At least armed robberies may happen only once or twice in a manager’s career, but this is every single day.
It costs us millions of pounds in stolen goods. We spend millions on security guards (whose primary job is to protect our staff). Thank God we’ve never had anyone physically injured in an armed robbery, but several of our managers have accumulated an impressive list of injuries over the years from kids and old ladies. We spend millions on cameras but I don’t know why we bother - the tapes have never been used in evidence.
We have a tidal wave of petty shoplifting, hundreds of incidents every day that end in verbal abuse and often violence - but it’s OK because it’s not really a crime is it?
It sounds absurd, but the weekly armed robbery is much less of a problem for us - I think our managers would agree that one armed robbery (soon over with) is better than the daily grind of constant aggravation, taking all the fun out of the job. Somebody please tell the police it’s a crime.
Red tape has gone too far
Heavy-handed legislation on selling alcohol asks retailers to police drinking
June 5, 2009
Every Monday morning our board meets for coffee and we go round the table to give an update of what’s happened the previous week. It’s always a light-hearted affair liberally spiced with jokes and banter.
Sales, store openings, highlights from store visits, the rolling profit forecast, gross margin, logistics, marketing, the latest revelations about Kerry Katona – it all gets covered. Some things are more interesting than others and people usually start texting or fetch more coffee when our IT director gives his report.
The same could sometimes be said about our company secretary. Insurance claims and legal issues can be very boring, but health and safety legislation and stores that fall for local authority entrapment on serving alcohol usually provoke a bit of mild outrage round the table. He’s got a very dry sense of humour and is good at telling jokes. Last week he told a great story…
Have you heard the one about the draft legislation for serving alcohol in stores? The Home Office has put forward a mandatory code for retailers:
- The minimum age for buying alcohol is 18 but we have to challenge anyone who looks under 21
- A senior member of staff has to maintain a live text or radio link with the local police to facilitate rapid response in case of disorder
- We must have a direct line to a taxi operator to get people home safely
- We must install CCTV to monitor and prevent alcohol disorder
- We must have a “dispersal policy” in conjunction with the local police to prevent disorder
- We must keep an incident record to keep police informed
- We must carry out a risk review of our shop and put in place a plan, which should be agreed with the licensing authority, to prevent crime and keep the public safe
- We can’t offer discounts after 5pm or at weekends
The trouble is he wasn’t joking. If we don’t comply our checkout staff could get six months in jail or a £20,000 fine – or both. No, come on, that must only apply to a nightclub in the rough end of town. Surely we don’t have to do all that in our little shops selling Rioja on 2 metres of shelf space… ? Yes, we do.
Am I missing something? Has there been rioting in the wine department at Tesco? Has Sainsbury’s had public disorder in its drinks aisle? Maybe Iceland does need a “dispersal policy” to “keep the public safe”.
Our politicians have gone mad. What planet are they on? In most European countries booze is as freely available as a can of Coke – it’s no big deal, but then European kids don’t binge drink like we apparently do. In the UK the answer seems to be draconian legislation, which increases the burden of red tape.
MPs seem to think it’s OK to rip off taxpayers with their expenses but threaten with jail anyone guessing someone is 21 when they are only 20.
Imagine a phone conversation with the local police: “I’ve caught a shoplifter with £80 worth of our goods. Can you come immediately?”
“Madam,” said the policeman (this is a true story), “wouldn’t our time be better spent catching terrorists?”
Then imagine on the other line: “Police, this is Iceland, I have a 17-year-old who tried to buy a bottle of cider.”
“Don’t panic madam, I’ll send a squad car round immediately.”
Thank God that when I was 17 and used to sneak into my local pub for a half of bitter the local bobby was more understanding. He’d either ignore it or if we were too blatant he’d threaten a clip round the ear.
Know your customer
Kerry Katona may have had her problems, but she was still right for Iceland
May 22, 2009
“Do you still use Kerry Katona?” If I had a pound for every time I’ve been asked I could retire.
It’s always asked by a certain type – typically middle class and probably a Waitrose shopper. It’s not really a question. It’s more a statement of incredulity meaning: “Why use someone like her in ads? Why not a posh bird like Mylene Klass?”
Everyone thinks they are a marketing expert but I’ve wasted enough millions on TV ads that don’t work to finally speak with some authority.
The worst offenders are ad agents themselves. They say 50 per cent of advertising doesn’t work – but no one knows which 50 per cent. Looking at some, it shouldn’t be hard to guess.
When I returned to Iceland I wanted to change the agency. Since sales had been negative, whatever they were doing clearly wasn’t working. They once tried to attract more upmarket shoppers by confronting their prejudices and put forward a proposal with the headline “Shop at Iceland? – I think my cleaner does”. Jesus.
I knew who to use – Tom Reddy from Manchester. He invented “Mum’s gone to Iceland.” It ran for years, then I sacked him and brought in a big London agency. It was really expensive and produced some of our worst ads.
I had to ask Tom to work for us again. He produced “Driving home for Christmas”. We had our best Christmas ever. Soon afterwards our then marketing director sacked him again.
Now here I was inviting Tom back for a third time. But not wanting to upset too many people in my first week I conceded we should let two other agencies pitch.
Both teams consisted of three young men, two dressed like Mormons and one in a denim jacket who was of course the creative director. There was also the obligatory beautiful young woman in a suit.
30 minutes were spent on a slick presentation showing us slides of our shops (to prove they had been), then a raft of demographic data. Then came proposed ads. They made you wonder what the previous 30 minutes were about. We had singing freezers and the usual polar bears and penguins.
Then in shuffled Tom. He’s err… of mature years and overweight. Calling him scruffy would be a compliment. It was hilarious seeing the reaction of people who hadn’t met him.
Tom explained we needed a powerful relaunch. He would never normally recommend a celebrity as they, rather than the product, could become the star. Who knows, no sooner have you signed them than they get caught taking drugs or something. But he said take a risk and showed us pictures of Kerry Katona. “Who’s she?” I asked.
Former pop star, Mother of the Year twice, on the front of every popular magazine almost weekly, she has “edge”. Perfect for you, Tom said.
It’s four years since I went back and Iceland has been transformed. Sales and profits are through the roof and there is no sign of slowing. One of the reasons why is Kerry Katona. She’s professional and has a great sense of humour. She’s had her problems, but haven’t we all?
One famous financial journalist doesn’t like Iceland and when we were a public company I had to suck up to the likes of her. She speaks with authority and people listen. Once she wrote Iceland had had its day – our customers were buying their ciabatta and sun-dried tomatoes elsewhere.
She’s a snob, but she could have been an ad executive with that level of market knowledge.
In defence of the landlord
Speaking up for public enemy number one
March 20, 2009
I always like to be controversial, so in my first column I thought I would speak up for retailers’ public enemy number one – the landlord. Landlords are probably viewed with the same disdain as the newly disgraced bankers.
Almost 40 years ago I opened my first shop. I had to find a solicitor and he duly presented a complicated 50-page document – the lease. It frightened me but I read every word before I signed it.
As I opened more shops, reading leases almost became a full-time job. They always seemed to be drafted in landlords’ favour and contained bizarre clauses. I couldn’t cover more than 10 per cent of the windows with posters. I couldn’t use the premises for immoral purposes. I had to decorate the interior every three years with good quality lead paint. If the landlord was teetotal, perhaps there was a ban on selling alcohol.
After a while I realised I could negotiate on lease terms and we’d spend hours debating trivia such as whether I could cover 25 per cent of the window with posters instead of only 10 per cent.
The point is, I was signing a binding agreement – usually for 25 years. Nobody forced me to do it. I knew what I was getting into. In return for agreeing to their terms and conditions the landlord would grant me “quiet enjoyment” of the property.
After my first 50 shops I gave up reading leases and let my lawyer get on with it. I realised that provided I paid the rent on time the landlord wasn’t really bothered about the lease’s daft details. That was just fees for the lawyers.
Sometimes I bought a freehold. I preferred to spend my cash on fitting out shops, but if buying a freehold was the only way to get a property then sometimes I would buy it.
Having bought a property I had a policy of never selling it. Over 30 years, almost by accident, I built up a portfolio of properties worth hundreds of millions of pounds and never sold a single trading freehold.
Many times I resisted advice from City whizz-kids and professionals to sell (and leaseback) freeholds in order to release cash to “invest” in the business so I could grow faster.
It seemed to me like the family silver, and when I looked around me the strongest retailers always seemed to own the most freeholds. We’ve seen it so many times. When freeholds are stripped out of companies for short-term gain it leaves them vulnerable and the cash “invested” is usually wasted. It’s never the founding chief executive who does this, but always some short-term manager who finds himself the new boss and wants to prove how shrewd he is.
I’ve seen one new boss sell swathes of freeholds and agree penal leaseback terms with the new landlord in order to maximise value, then a few years later become a spokesman for the anti-landlord brigade complaining the terms are unfair. If I agree a deal, I like to stick to it.
I now realise that a landlord isn’t really interested in bricks and mortar. They are making a financial investment. They buy a property and usually borrow money to do it. They then rent it out to give a percentage yield on their investment. If the tenant doesn’t pay the rent they’re in trouble.
The retailer might suffer in an economic downturn, but so does the landlord. Retailers going bust and empty units with no income to pay the bank loan can put a landlord out of business. Council rates on empty properties make it worse and retailers wanting to renege on their agreements and pay rent monthly can devastate a landlord’s cash flow.
The landlord is running a business like everyone else, and it’s not always an easy business. How many owners of Woolies freeholds are small-time landlords who will be wiped out now they have no income?
The problem is, many retail analysts and City commentators know as much about property as they do about forecasting share prices. I once had a long conversation with a well-known financial journalist who was asking my views on a certain retailer that had just sold a batch of freeholds at 9.5 per cent.
I said it was total incompetence and gross mismanagement as they could easily have achieved 7.5 per cent. She couldn’t understand what I was saying and was totally convinced that a higher yield had to be good news.
And it was – but for the landlord not for the retailer, which had just received perhaps £50m less than the freeholds were actually worth at the going market rate.