Specialist and affordable: inside Iceland's Wine Warehouse

Four years after Iceland introduced its new store format, The Food Warehouse, the number of branches is marching toward triple figures.

The concept, which Iceland MD Richard Walker has called “a cross between an Iceland and a Costco”, has also grown in average footprint with recent openings. The branches, which are all in retail parks, are typically between 10,000 sq ft and 15,000 sq ft, already much bigger than an Iceland, which is usually about 5,000 sq ft.

But now the chain has moved into a new colossal space in Cheltenham, a 27,000 sq ft former Whole Foods branch in the Gallagher Retail Park.

Opened last week, it’s the 86th Food Warehouse in a store estate that’s expected to have broken 100 by March. According to marketing manager Julia Smith, the decision to acquire the mult-sized space was driven simply by the opportunity to do so. “At the moment we’re acquiring a lot of sites and particularly in this area we hadn’t yet opened any,” she says.

The opportunity has itself driven innovation, because the site is so big that The Food Warehouse has needed to grow to fill it. “The sheer size of it gave us the opportunity to look at alternatives, what else we could do with the space, rather than it just being all about the food and homeware,” says Smith.

Two of those new ideas have been a food catering aisle for bulk buy shoppers and an expanded range of toys, but neither of these is the boldest move made at this branch. Instead it’s the area partitioned off for a brand new store within a store: The Wine Warehouse.

Already the space features 300 beers, wines and spirits with 150 more to come. There are two wine specialist staff, one a former Majestic assistant manager, plus a fine wine bay and a tasting counter. According to Walker, the concept offers “a great value antidote” to “overpriced specialist retailers and the limited ranges at off-licences”.

“We wanted to fill the void between the limited range at a budget off-licence and the premium prices at a specialist retailer,” says Walker. “The Wine Warehouse brings customers a range of award-winning wines coupled with favourite brands at unbeatable prices.”

“Nigel [Broadhurst, joint Iceland MD] really thought there was a gap between the mults and the Majestic,” says senior wine buyer Robin Langton, whose enthusiasm is clear as he walks through the aisles.

There are bays devoted to beer, gin and “specialist” vodka. “Hero” wines include Apothic Red at £7 and Ned Pinot Noir 2016 Southern Valleys at £10. Colossal Reserva, a Challenge International du Vin 2018 award winner and exclusive to The Wine Warehouse, is £6.

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“We’ve got 34 wines on pallets,” says Langton. “Some are brands you’d recognise from the mults but at great prices.”

There are 25 more in the fine wine bay too. “It’s not huge but we’re really trying to capture some go-tos for people, some Gavi, some Alsace. This is not a Majestic range - we’re not a 1,000-SKU store, but there’s enough that if I as an expert came in, I could find various things I’d be happy to buy. And there’s enough for the high street shopper as well.”

It’s an ambitious, brand-evolving move for The Food Warehouse, but perhaps that is what’s needed to move into a 27,000 sq ft site in today’s challenging retail environment. “This is not a time for any business to rest on its laurels,” says Walker. “Outdated, unchanging retailers are falling fast and leaving more and more empty units on the UK’s high streets.

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“It’s up to bigger businesses to innovate and come up with ideas that will keep customers and jobs in the towns and cities that need them.”

And we could see bigger stores yet from the retailer. “We’re in the good situation where we’re trying to acquire units rather than closing any down,” says Smith. “Something like this, when you can open it up and understand the shopper behaviour, I think it does leave questions in terms of what else we could go for.”

Could we see standalone Wine Warehouses? “Although it’s obviously in conjunction with The Food Warehouse, there may be opportunities for just The Wine Warehouse. Who knows?” says Smith. “At the moment it’s watch this space.”