Poundland playing it cool over frozen move

Poundland is trialling a new frozen food offer as it looks to take advantage of the possible sale and break-up of Iceland Foods - and emulate similar moves by its biggest rivals.

“We have to watch the market,” said Poundland chief executive Jim McCarthy. “Iceland is in play. If it is sold to somebody other than Malcolm Walker, what happens to the brand? What happens to the sites?

“What opportunity does that leave other retailers, including us, to make up some of the ground and take up some of the volume that might otherwise be lost from the high street? I am not the only one thinking like that.”

Last year, 99p Stores and Poundworld also introduced a frozen offer.

Poundland, the UK’s largest high street round-pound discounter, is trialling and tweaking the frozen offer in 22 stores. If trials are successful, the range will be rolled out across its 379-strong portfolio.

“Frozen is working well so far, but we are testing the equipment and the supply chain,” said McCarthy. “We also have to work on the ranging, the pack sizes, and the value that we have to give. For example do we offer 10 or 12 fish fingers in a pack?”

Even if Iceland Foods remained intact, the increasing popularity of frozen food meant it was worth trialling, said McCarthy.

“Frozen food has more appeal at the moment than in the past,” said McCarthy. “People throw a lot of chilled product away, so it’s expensive if you don’t use it. But with frozen you can use half a box of fish fingers and put it back in the freezer. It is dead easy. There is less waste and more value.”

However, McCarthy insisted the trial had to deliver substantial growth if frozen were to be given a permanent place in the Poundland offer.

“It has got to do volume,” he said. “There is no point putting in frozen food if it simply replaces the sales of core products that already sell well. It has to be complementary to our range.”