Sales news gets worse for Iceland

FOOD retailer Iceland is poised this week to report a new fall in sales. Iceland's parent, Big Food Group, is due to publish full-year figures on Thursday. These are expected to show pre-tax profits of about £50m for the company as a whole, which includes Booker cash-and-carry and Woodward Foodservice as well as the 750 Iceland shops.

BFG chief executive Bill Grimsey said last month that Iceland had seen sales decline by 0.2% in the three months to early April, the end of its financial year, compared with the same period last year.

Financial Mail later disclosed that the position had subsequently worsened: Iceland's sales in the week to Easter Saturday were down by 2.6% on the equivalent week of 2003.

Sources close to the company say that BFG will confirm this week that Iceland has been suffering deteriorating sales since the financial year-end.

BFG shares, 160p at the beginning of March, have since fallen below 110p. A new report from the company's stockbroker, UBS, says the shares are likely to recover, despite the squeeze on sales, as Booker and Iceland improve margins.