Frozen-foods chain Iceland may shut shops to beat energy squeeze

The boss of frozen-foods chain Iceland has warned that he has been forced to shelve new store openings after his latest energy bill rose by £20million, more than doubling the total. 

Richard Walker said his group was ‘fighting to keep the lights on’ and called for an energy price cap for British businesses. The staggering increase in bills has left many retailers concerned about their ability to stay open beyond winter. 

Walker said Iceland was bearing the brunt of soaring prices more than other supermarkets because of its reliance on storing food in fridges and freezers. He told The Mail on Sunday: ‘We’ve got to make decisions because we have got this unmanageable volatility. In some instances, it might just be easier to mothball shops or temporarily close them because the energy costs are just completely unsustainable.’ 

Walker, who took over from his father, Malcolm, in 2018, said soaring energy prices, wage inflation and labour shortages had left Iceland facing its worst crisis in more than half a century. 

He said businesses normally try to lock in new contracts to insulate against future rises, but that was impossible with prices soaring. He said Iceland is facing the prospect of a cliff edge as his firm’s energy remains hedged for just the next ten weeks. ‘We are good at selling frozen peas,’ said Walker. ‘We are not electricity traders. 

‘If you look at the spiralling energy markets, then you know it won’t stop there. We’ve got the winter coming and nothing is being done about it. Consumers rightly need to be supported, but business needs to be supported as well.’ 

He said many of his small and mid-sized suppliers were warning of collapse. ‘Iceland is going to be large and strong enough to ride out this storm,’ he said, but he added that suppliers were at a ‘real risk of going bust’, threatening thousands of jobs. 

He said the next Prime Minister will need to ‘sort out our completely broken energy markets’ in the longer term.