Frozen goods retailer Iceland will be hit with massive energy bills this year because of its heavy reliance on freezers.
The discount supermarket had a £70 million energy bill last year, equivalent to around two per cent of its sales, as reported by the Daily Mail.
Energy prices have spiralled in the wake of Russia’s invasion of Ukraine. The grocer, which has close to 1,000 UK stores, is exposed because a third of its sales are frozen food.
READ MORE: Iceland Foods head of supply chain talks challenges, solutions and plans for the future
In the first quarter of this year, its bill has already jumped by £19m, suggesting it is on course to more than double last year’s total.
In its most recent annual report, Iceland said the increasing energy prices mean it will be ‘unable to avoid a temporary reduction in profits’ this year.
Iceland made £126 million in profits last year, which is expected to fall below £100 million this year, as it won’t be able to fully pass on the increasing energy costs.
But the supermarket is still confident it can get back on track, by picking up more shoppers moving from fresh to frozen products to save money.
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