Iceland has posted record profits as shoppers devoured its £1 range

The performance also reflected lower electricity costs and shoppers’ desire for value for money as the cost-of-living crisis hit. Energy costs had previously impacted the retailer hard because of its need for large freezers.

Iceland told bondholders last week that underlying profits climbed 24% to £315.7m in the year to March 29, 2024, The Sunday Times reported. Sales were up 6.6% to £4.2bn. The performance benefited from the fact that last year included an additional reporting week.

As shoppers’ disposable income was eroded by high inflation, Iceland extended its £1 value range, which includes items such as pizzas and sausages. Inflation has been moderating in recent months.

Rising electricity costs affected Iceland the previous year when they rocketed by £95.7m to £163.2m. They have since come down and Iceland also cut energy consumption by 10%.

The retailer told bondholders it anticipates higher profits this year but did not provide a specific number.

Recent data from grocery market monitor Kantar showed Iceland performing ahead of the market. Iceland’s sales advanced 4.4% in the 12 weeks to June 9, versus market growth of 2.4%.