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Iceland boss says supermarket is losing customers to food banks due to cost of living

The i 29/05/2022 Nicola-peach

Richard Walker, managing director of Iceland, says the supermarket chain’s customers have started “disappearing to food banks” because of the cost of living crisis.

Mr Walker told Sky News’ Sophy Ridge On Sunday programme there is a “perfect maelstrom of inflationary pressures” hitting shoppers on a budget and “some of the poorer demographics”.

He said: “The reality is there is no typical Iceland shopper, averages don’t work very well because we have people who come in and spend five quid and people who come in and spend £50.

“Generally, I think it is safe to say everyone is feeling the pinch now, it doesn’t matter who you are.

“We do serve some of the poorer demographics around the country.

“We are hearing stories of some of our custom disappearing to food banks, which is a reality, or, indeed, some customers when they are at the till asking the cashier when it amounts to 40 quid so that they can leave the rest of their shopping. It’s fair to say, everyone’s feeling the pinch, but the harder-pressed are feeling it more than anyone.”

Average energy bills are expected to rise by £1,500 this year, with a £700 increase in April is set to be followed by a further £800 rise in October.

Chancellor of the Exchequer Rishi Sunak announced a new package of measures last week that promises to boost the incomes of eight million low-income households with one-off increases to welfare payments. The new measures are set to cost around £15bn and come after the first package received criticism for not delivering enough to those in need.

Mr Walker said “the reality is that basic staples are increasing more,” with loaves of bread and milk going up “quite rapidly” across all retailers, citing factors from “commodity price increases to labour shortages in the fields and factories, to the price of fuel to move goods around, through to genuine supply shortages like sunflower oil or wheat, both of which come from Ukraine and have dried up.”

He added: “The unintended consequences of that is not just a bottle of sunflower oil or the wheat in your bread. Sunflower oil finds its way as a vegetable fat into hundreds of different ready meals and pre-prepared meals, and wheat goes into animal feed, so that is having a knock-on impact on the price of everything from bacon to chicken.”

Mr Walker said Iceland is “especially resilient” as a primarily-frozen food retailer, adding: “We can build up stocks, we have long supply lines, we’ve been working on (products having) two years’ of shelf life.”

The Iceland boss added that the chain had made a “major investment” to keep the cost of some products at £1, adding: “We’re making no money on those now, but we think it’s the right thing to do.”

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