Frozen Foods and Energy Crisis Impact Retailer’s Performance
- Iceland’s energy bill expected to double by 2023
- Up to a third of sales volume from frozen foods
- 1,000 UK stores affected
- Profits predicted to drop below £100m this year
Iceland, a UK-based supermarket chain with nearly 1,000 stores, is facing potential profit drops below £100m this year due to soaring energy costs. Up to a third of its sales volume comes from frozen foods, which require more energy to keep cold. The company’s energy bill for the year ended March 2022 was £70m and is expected to double by 2023. Fitch Ratings analyst Alise Ilzana-Raghuvanshi warns that the ‘considerable uncertainty and volatility in global energy prices’ will lead to a temporary reduction in profits unless they stabilize.
Factuality Level: 8
Factuality Justification: The article provides accurate and relevant information about Iceland’s expected impact of energy prices on its performance next year, citing a source from Fitch Ratings. It also discusses the company’s sales volume and profit projections. However, it could provide more context or background information on the global energy crisis and its effects on other businesses.
Noise Level: 3
Noise Justification: The article provides relevant information about Iceland’s expected impact from rising energy prices and its effect on profits. However, it could benefit from more in-depth analysis of long-term trends or possibilities, as well as exploring consequences for stakeholders and providing actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Iceland (retail company)
Financial Rating Justification: The article discusses the impact of rising energy prices on Iceland’s financial performance and profitability, which is a relevant topic in the financial sector. It also mentions the potential impact on the company’s stock value and its ability to pass on increasing costs to consumers.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text, and the financial challenges faced by Iceland due to energy prices are not considered an extreme event as they are related to market fluctuations rather than a specific crisis or disaster.
www.retailsector.co.uk