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The Food Warehouse 100th store

The Food Warehouse has become the focus of growth and expansion for owner Iceland, thanks to better like-for-like sales performance and a more efficient format than core stores.

Speaking to The Grocer after The Food Warehouse opened its 150th store, Iceland MD Richard Walker said the format, which started as an “experiment” in 2014, was now seen as “the source of growth for the group” along with online.

Latest accounts at Companies House revealed The Food Warehouse estate grew by 20 stores in the year to 26 March 2021. Meanwhile, Iceland’s core estate shrunk by a net five, including one converted to the business’s first Swift convenience store.

Asked if The Food Warehouse had become the focus for expansion, Walker said: “Yes, it is. I see it as very much a significant part of the business’s future.

“It started off as embryonic and a bit of an experiment really, a bit of a side project. We weren’t exactly sure who the customer would be and whether it would work, but now we know it really is the source of growth for the group, along with online, and it’s going to be a huge part of the business’s future in the years to come.”

Walker said The Food Warehouse was outperforming Iceland on like-for-like sales, while its stores could be run more efficiently.

“The locations are something we didn’t have, on retail parks, and it’s absolutely in tune with a new type of customer, which means sales are incremental for the business,” he said.

It was also a “more efficient operation to run because the stores are more standardised and therefore it’s more productive”, he added.

Store openings had “slowed a little” as Iceland dealt with the disruption of the pandemic, but The Food Warehouse was now “definitely in expansion mode again and we’re hungry for sites”.

“We’re also being a bit less purist and a bit more flexible in terms of store shape and size, but compared to the Iceland stores, where each and every one is completely different because they’re all in old high street units, that’s the beauty of The Food Warehouse. It is a more standardised design and operation.

“We’re hoping we can open 20 to 30 stores a year.”

Last week, Iceland revealed a new target of 200 Food Warehouse stores by 2024.

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