Iceland acts to ease the cost-of-living crisis

Electricity, gas, petrol, National Insurance, council tax, VAT on takeaways, food to cook at home … on seemingly every front we are currently faced with major cost hikes that, for many people, are sadly going to make the difference between just about managing their family finances and being unable to cope.

Worse still, this is just a foretaste of the tsunami of cost-of-living increases now bearing down upon us, with the 54% increase in average domestic energy bills from April 1st expected to be followed by a further 42% rise in the energy price cap in October – and every chance of prices remaining high for the next four years.

Already this month it is estimated that over a third of UK households – that’s 23 million people, in a supposedly rich G7 country – are going to be unable to meet the everyday cost of living.

With 1,000 stores across the UK, we at Iceland are already seeing families being forced to make the stark choice between heating and eating. We are losing customers – not to competing stores, but to food banks. Heartbreakingly, the Trussell Trust reports that some users of its food banks are already declining potatoes and root vegetables because they simply can’t afford the energy to boil them.

Like every other business, Iceland is also under huge pressure from soaring energy costs (on which we do not enjoy the protection of a Government price cap) and escalating commodity prices, but we are determined to do everything we can to help our customers through this crisis.

So from today, in response to the energy price hike and the coming tidal wave of further pressures, we are cutting the minimum spend required to secure free delivery of groceries through both our award-winning Online shopping service and our unique home delivery service for in-store purchases.

For Online purchases, our threshold for free next day delivery drops from £40 to £35, while the threshold for same day delivery of in-store shopping is cut from £25 to £20.

We are the only UK food retailer offering free next day delivery of online orders, seven days per week.


We hope that these threshold reductions will help those with smaller weekly shopping budgets by allowing them to save on the cost of fuel in taking a car to the store, as well as removing any worry about incurring delivery charges.

We will trial these reductions nationwide for the next four weeks and monitor customer feedback to ensure that they are proving helpful.

This latest initiative comes on top of action we have already taken, notably in freezing the prices of hundreds of our £1 Iceland value lines, providing reassurance to the many customers who rely on these as a cornerstone of their family food shop.

New customers can save £10 on their first online shop by Googling ‘Save £10 at Iceland’ to find offers, while signing up for the Iceland Bonus Code offers a market-leading 5% return on all savings plus access to exclusive weekly offers and discounts.

We have also launched an ethical credit scheme, in association with the respected lender Fair For You, to provide low-cost short-term microloans to help families with their household budgets. So far this has been rolled out across North West England and South Wales.

Of course I would say this as the MD of a frozen food business but, at a time when every penny counts for so many people, it really is worth remembering that research has shown that families can make very substantial savings in both outlay and food waste by switching from fresh to frozen food. A study by Manchester Metropolitan University in 2020 showed that this could cut a family’s annual food bill by up to £1,500, while slashing their food waste by more than 40%.

Iceland is continuing to support Marcus Rashford’s campaign to tackle child food poverty, and in February we began a major push to encourage take-up of the Government’s Healthy Start / Best Start food voucher schemes by promoting these on 90 million of our Iceland milk bottles. We redistributed the equivalent of 1.4 million meals to families in need between 1 April and 24 December 2021, and have set the higher target of two million meals for our new financial year that begins this week.

Iceland will always stand up for its customers and we will continue to do everything we can to shield them from the huge and increasing pressures on their budgets that they are currently facing.

We can take these actions, like offering free delivery and cutting the qualifying threshold, because we are a private company with the freedom to invest our own money to help our customers. I very much hope that others will follow our example.

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