Frozen food chain Iceland has been forced to put its plans for expansion on hold and has warned of potential store closures because of soaring energy bills, according to managing director Richard Walker.
Mr Walker says that extortionate costs have left his business “fighting to keep the lights on” and is calling for an energy price cap for businesses in the UK, after its latest energy bill rose by £20million. He’s also calling on No 10 to prepare an immediate cost-of-living package for retailers struggling, telling The Guardian he is worried that a “half-baked response” from new Prime Minister Liz Truss, will not address people’s needs.
“What they need to understand is this affects big businesses as well as small because it’s exactly the same trouble we’re in – there’s just more jobs at stake,” he said.
Read more: 'We don't see any help' Popular North East fish and chip shop reveals Cost of Living pressures
The energy price cap covers domestic customers on standard variable rate tariffs - but there is no price cap for businesses and the boss of Iceland isn't the only business leader to call for more support for struggling companies this winter. Celebrity chef Tom Kerridge has revealed the annual energy bill at his pubs has skyrocketed from £60,000 to £420,000.
“We’ve got to make decisions because we have got this unmanageable volatility,” Mr Walker told the Mail on Sunday. “In some instances, it might just be easier to mothball shops or temporarily close them because the energy costs are just completely unsustainable.”
For Iceland, its dependency on fridges and freezers to store its frozen food has seen its energy bills rise higher than other UK supermarkets, but Mr Walker has acknowledged that Iceland is “large and strong enough to ride out this storm”. The retailer saw its energy bill rise to £70million last year, equivalent to around 2% of its sales. In the first quarter alone, its bill jumped by £19million, putting it is on course to more than double this year.
This comes as from 1 October, the a verage household’s yearly bill will jump from £1,971 to £3,549, with a total of 24 million households to be affected by the energy price cap rise.
In calling for an energy price cap for British businesses as soaring bills threatened to push pubs, hotels, restaurants and retailers over the edge this winter., Mr Walker said: “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 running the chain from his father Malcolm Walker in 2018, warned Iceland was facing the prospect of a cliff edge in terms of costs as its energy only remained hedged for the next ten weeks. "We are good at selling frozen peas,” he added. “We are not electricity traders.”
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