Business Irish

Monday 21 October 2019

Iceland expansion only heating up

Irish boss of UK retailer Iceland plans nationwide coverage here over the next five years

Ron Metcalfe is aiming for between 50 and 70 Iceland stores in Ireland under ambitious plans for the food retailer. Photo by David Conachy
Ron Metcalfe is aiming for between 50 and 70 Iceland stores in Ireland under ambitious plans for the food retailer. Photo by David Conachy

Fearghal O'Connor

In recent weeks retailer Iceland has seen its cute advert about an orangutan become a social media sensation. It depicts a sad ape that is about to lose his home to evil palm oil farmers. A little girl takes in the ape, audience hearts melt and the retailer presses home the message that it is removing palm oil from its products.

But what really sent the reaction to the ad through the roof was when the industry body for clearing television adverts in the UK banned it from airing because, it said, it was too political. The ad has since been viewed 65 million times online.

Ron Metcalfe, head of the British retailer's Irish operation, says the huge online reaction to the advert was a surprise and that the ad itself was not political, but was very much in keeping with a store that has previously moved against plastic packaging and GM ingredients.

"We are taking palm oil out of our own label range because we disagree with the deforestation and unnecessary harm it is doing to orangutans. So it's not a political thing, we just believe that it's right to support this campaign. You know we were the first company who said we were going to remove plastic out of our own-label products. We have strong beliefs."

Of course, taking on the palm oil growers in south-east Asia is, in reality, probably well down Metcalfe's long to-do list, which is topped by a substantial expansion of Iceland's store network in Ireland. He started his career with Iceland in his native Liverpool more than 40 years ago and came to Ireland 22 years ago to run the retailer's then new operation here.

"We originally opened 10 stores but in 2005 there was a lot of focus going on what was happening with the operation in the UK and the company did not want the distraction of a much smaller Irish operation at the time. At that stage we weren't going to invest any more so I was asked to close the business down, which I did in October 2005. It was not an easy thing because I'd built that team up. It was real personal for me, it was my baby."

Metcalfe stayed on in Ireland, working for the Moriarty Group and then B&Q. The Iceland brand had lived on here in the guise of six franchised stores. But then, in 2013, Iceland made a strategic decision to take the Irish business back and to grow it. Metcalfe was delighted to get the call to come back and develop an expansion plan. Since then it has grown to 26 stores, having just opened stores in Nenagh and Wexford. But, says Metcalfe, that is only for starters.

"Our goal is to get to between 50 and 70 stores in the Republic of Ireland," he says. "What slows us down is getting sites or property in the right location to put in the right size store for an area. We've got five guaranteed for next year and I would say by 2023 we will certainly have around 50."

Metcalfe says he has a wide remit as to where to look for suitable sites and while it does depend on what he describes as "the number of chimney pots", he is happy to look wherever there may be an opportunity.

"We look everywhere," he says. "We want a store in every town. The areas where we are actively looking more than most are where we haven't actually got any coverage and around Meath, up the east coast from south Dublin right up to Dundalk, and then, after that, probably the west coast around Sligo. Those are the areas we are actively looking at, but ultimately the plan is to have national coverage."

While Lidl and Aldi both have 140 stores apiece, and Metcalfe admits that will be a hard gap to bridge, he still believes there is now a massive opportunity for Iceland, not least because of its focus on expanding beyond the frozen food that originally gave the store its name. That name has tended to give shoppers in the past a fairly one dimensional view of what an Iceland store has to offer: cheap frozen food.

But Metcalfe - munching on what is an admittedly delicious mince pie from Iceland's Christmas selection - is adamant that the new stores it is now rolling out in Ireland have far more to offer.

"Our mince pies are award-winning," he says. "Selfridges are actually selling our mince pies this year. From a quality and a value point of view, no one does it better than us. Yes, we are the experts in frozen food. That's our 'go to'. But we also have over 1,500 grocery lines and over a thousand chilled and fresh lines. Quality and value is what we are about."

Nevertheless, Metcalfe says frozen food remains at the heart of the retailer's offering and it is something, he says, that will always be the case.

"Think about the quality of frozen food, or what we like to call 'nature's pause button'. The journey that fish take, for example, shows why it can be the best approach. Our fish is frozen at sea right after being caught. What is called fresh fish is not frozen. It sits on the boat, goes to the market, is bought and then sits on loose ice in a supermarket with the heat of lights and the store coming down on top of it."

Iceland has built up a network of about 40 Irish suppliers and about 25pc of goods sold are sourced in Ireland. That is something in which Metcalfe takes genuine pride, not least because he has made Trim, Co Meath, home for himself and his family for 22 years. Setting up Iceland in Ireland as a separate entity from the UK mothership was important and has given him the degree of freedom he needs to ensure that the offering appeals to the local market.

"The way we describe it is that our parents live in the UK and we live in Ireland. We financially report back to them but it is a separate business. If you walk into an Iceland in the UK and an Iceland in Ireland, there are lots and lots of subtle differences."

Inevitably, as with any other Irish-based food business, Brexit is a concern but, says Metcalfe, not too much of a concern. Iceland has already planned for what he describes as the worst-case scenario.

"We'd be foolish not to, but its difficult to put all your ducks in a row because ultimately no one knows what's going to happen at this stage. The benefit for us is that a lot of our suppliers are based around Europe as well, so they can come directly in," he says. "I think it is just a case of wait and see and make sure that you're nimble enough to react. If it does turn into the worst-case scenario then there could be a delay with getting stock in but we've got plans in place to make sure that the customer doesn't see that delay."

For Metcalfe, it's just one more item on his busy to-do list.

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