Iceland - comment

With wage inflation and inflation in general never out of the headlines in the UK, there is renewed interest in Iceland over the last couple of weeks. And yesterday, Iceland hit the mainstream news offering Buy Now, Pay Later (BNPL) on groceries for families on a low income. We are still trying to speak to the Company, but it would appear that Iceland are not taking any credit risk in these loans. Instead, they are offered by the charity/ethical loan Company Fair For You. The loans will give families store credit up to £75 and are available one loan at a time over six specific windows of the year, coinciding with the school holidays. Iceland are covering the 3.5% interest rate that was charged to customers during the trial for the national roll-out but the store credit is only available at Iceland. No doubt there is an ethical debate to be had on the provision of BNPL loans for essential purchases, but reality of high inflation means some customers need the help now. From this scheme, Iceland confirms their positioning in the market. Separately, as mentioned on the previous call, the push for sustainability has taken a back step due to the current macro-economic conditions with all retailers, including Iceland shifting focus on minimising disruption and accepting some sustainability targets will have to be pushed out.