Past, present and future
As Iceland kicks off a large-scale, €12m plan to open nine new stores in Ireland and large scale growth beyond that, Doug Whelan sits down with managing director Ron Metcalfe, who outlines the supermarket’s storied history in Ireland, as well as his philosophy for the company going forward
16 May 2017
Every company has a story, whether it’s a small local shop passed down through generations, or an international grocery giant experiencing all the changing fortunes that come with the global economy. In the case of Iceland Ireland, the story begins in 1996 with its arrival in Ireland, almost three decades after it was first founded in 1970, in Shropshire, England.
But let’s not get ahead of ourselves, and ahead of the business at hand. We’re sitting with Ron Metcalfe, managing director of Iceland Ireland, to discuss the exciting news of the company’s long-planned expansion, which launched earlier this month with the opening of its Tallaght store. The 15,000 sq ft supermarket on Greenhills road is Iceland’s largest outlet in Ireland to date – an ideal reflection of the plans currently being deployed by Metcalfe and his executive team. In short, 2017 is set to be the company’s biggest year ever.
At the end of last month, Iceland announced a €12 million investment that would result in the opening of nine new stores across Ireland. The locations of the new stores are Tallaght and Galway, which are already open, with Douglas, Fermoy and Ballincollig in Cork, with Letterkenny, Limerick, Shannon and Gorey to follow in the coming months.
These new stores will join the company’s 12 existing supermarkets across the country. 270 new jobs are planned for the nine stores, with Metcalfe outlining his plans to lead the company into a total of “between 50 and 70 stores nationwide in the next five years.”
Naturally, here at ShelfLife we are thrilled to hear news like this. Not only does it mean that our industry is continuing to thrive, but it stands for the continuation of Iceland’s story in Ireland.
The Tallaght store opened at the end of last month, and was quickly followed by Iceland in Galway, the company’s first branch in the west of Ireland, and also its largest. These two brand new Iceland branches span 15,000 sq ft and 16,000 sq ft, and Ron Metcalfe agrees that their size is a calling card for Iceland’s new chapter in Ireland.
“There’s a whole new concept within Iceland,” the MD says, “where we are changing the look and feel of the stores overall. Generally, our stores run between 5,000 and 7,000 sq ft. Tallaght and Galway have doubled those sizes, which will completely change the personality of our stores.”
With those increased sizes, there of course will come the opportunity for Iceland to expand its ranges across all departments and segments. “We’ll be able to store a bigger and broader range of products,” Metcalfe agrees. “The new stores will have an extended in-store bakery and coffee-to-go, and also we’ll have a wider range of groceries and of course a bigger frozen range, which is our specialty.”
The road to Ireland
Iceland’s presence in Ireland is a storied one which really has three distinct parts: its arrival, its departure, and its return. The latest expansion, in that case, is part four.
The company established its first foothold in Ireland in 1996, when it opened several stores in Dublin and one in Kilkenny, in quick succession. Metcalfe was the company’s MD back then too. Eight stores in Dublin and beyond opened in the subsequent few years, and Iceland established itself as just as much a household name here as it was in the UK.
However, the period of growth the company was experiencing here coincided with a period of turbulence for the UK operation. Founder and chairman Malcolm Walker was ousted from his position at the end of 2000, and the company experienced a takeover bid and years of tumult under new CEO Bill Grimsey.
This was a controversial period for the UK parent company. In fact, on Iceland.co.uk’s ‘about’ section, Grimsey’s stewardship of the company is referred to as “the dark ages”, and it has few flattering things to say about him. It makes for some interesting reading!
Eventually, following another takeover, Malcolm Walker was reinstated as chairman of Iceland in 2005, and we return to continue Ireland’s story.
“When Malcolm took the business back in 2005,” Ron Metcalfe recalls, “there was a lot of work to do in the UK. It was decided that the journey we were on in Ireland would have been a distraction.
Iceland, under the directorship of Metcalfe, shuttered its Irish operation in 2005, selling its premises and leases. The brand itself remained in Ireland, Metcalfe continues, through franchisees, while he himself opted to stay in Ireland as a retail executive.
He recalls he came to Ireland to help put down Irish foundations for the Irish business during the initial 1996 debut, 20 years ago, and found himself putting down foundations of his own. “I love living in Ireland,” he says, “I felt at home here right away.”
He spent some years as operations manager for the Moriarty Group, which owns and operates a group of SuperValu stores and hotels in Dublin.
After that, Metcalfe joined B&Q as its regional operations manager, before the call came in 2013 that Iceland would once again be establishing a company-owned operation in Ireland. For Metcalfe, rejoining the company was an easy decision. “It was like mammy and daddy were calling me to come home,” he jokes, “and I got straight back to work.”
The MD explains that the company has had an eye on this “aggressive” expansion since day one of that return to Ireland in 2013, when it acquired six existing Iceland stores, but that the progress was quite slow. That’s hardly surprising, given the economic climate it was arriving into.
“We closed two stores immediately,” Metcalfe recalls, “but in Ireland we were quite late to the party. Finding suitable properties over the past few years has been difficult because of Nama and the various legal issues.
This year, however, the company has pushed through those issues and is finally ready to deploy what Metcalfe calls its “funnel” of new stores.
Since 2013, Iceland Ireland has opened around two stores per year; including the new stores above, there are currently 14 stores in Ireland. “As our funnel starts to release,” Metcalfe says, “that’s going to grow to nine or ten new stores per year, and it’s our aim to open nine or ten new stores ever year for the next five years.
“That’s the target,” he says decisively.
Location, location, location
It goes without saying that the lead-up to Iceland’s announcement involved extensive research and exploration of potential sites and locations for its new stores, along with population statistics, demographics and more. “First off, we naturally want to establish a presence in the cities,” Metcalfe says. “There’s no reason why we couldn’t have up to 10 or 15 stores in Dublin; four or five in Galway and the same in Limerick and Cork.
“We have our own property person who works closely with us,” he continues. “He understands the market and he has been working hard on identifying potential sites. When he does that, we pay a visit to the place, we run through the demographics, the local area, the population and everything else.
“If the numbers add up,” he says, “we make a decision on opening a store.”
Gone to Iceland?
Iceland’s presence in Ireland – in one form or another – since the mid-90s has resulted in it being an instantly recognisable brand, thanks in no small part to its various celebrity ad campaigns and memorable slogans over the years. Metcalfe agrees, but goes a little further to remind us that Iceland, despite its UK parentage, is an Irish company. “We’re Irish,” he says. “We’re local stores, with local people, and local products. We have an Irish board, an Irish head office and an Irish executive.”
On the topic of Iceland’s top level – working tirelessly to take the company into its next phase – Metcalfe deploys that time-tested adage, you’re only as good as the people around you. “I am absolutely blessed with the team I have around me,” he says. “I have a team of seniors around me who are over each area of the business: buying, marketing, HR, operations, business and property.
“They report to me,” he says, “and they have their teams reporting to them and so on down the line.”
We suggest that to be part of – to use his words – an “aggressive” expansion project must make for an energetic atmosphere at that level. “Absolutely,” Metcalfe agrees. “To be part of a business that is growing at this rate is itself an energising prospect.
“There’s very much a ‘can-do’ attitude with everything. There’s very little bureaucracy among the team. We sit down on a Monday morning, we have discussions; we make decisions and take action based on those decisions. It’s a very dynamic atmosphere.”
Make decisions, and take actions based on those decisions. In terms of management theory, it doesn’t get much simpler than that!
So then, the board is set and the pieces are moving. All that remains now is for Iceland to get those stores open, and if all goes well the chain will be climbing the Kantar Worldpanel supermarket share index to join what we refer to in passing as “the Premier League” of supermarkets.
“Well,” he corrects, “we consider ourselves to be in the Premier League already! We may not be the Manchester Uniteds or Liverpools of the scene, but we’re certainly a Bournemouth!
“From a penetration point of view,” he says, “we aim to establish between 50 and 70 stores, and have a presence in every major city and town in Ireland. As far as our brand is concerned, one of the elements we always talk about is, ‘give me a reason to shop with you’. And from that point of view, we’re fundamentally different.”
Naturally, Iceland’s specialty is frozen food, and Metcalfe points out that his outfit offers the biggest range and best value frozen food in Ireland. Then there is the equally extensive range of branded grocery and chilled goods – more than 2,000 grocery products – which he says come in market-beating prices.
“We do a price comparison shop every two weeks,” he says, “and that information combined with KVI lines shows that we are the best value on the market.
“We will stand over that claim,” he adds.
Returning to Iceland’s Irish offering, Metcalfe proudly points out that 30% of the stores’ sales come from Irish products. “We have created our own Irish brands,” he says, “and we have been working with 38 local suppliers to develop those ranges and expand our local offering.
“As we get bigger,” he says, “that has been getting easier because ultimately volume dictates growth.
“That’s our ultimate goal,” he says. “The size of our business will allow us to buy better and pass that on to the consumer.”