Here’s a question. What company offers fresh lobster, fillet steak and grouse (in season) on the menu of its head office restaurant? Or hires jumbo jets to take its store managers on an annual knees-ups to Disneyland, Dublin or Dubai? Or gives away shopping trips to New York and weekends in Monaco as staff incentives?
The answer? Iceland Foods.
The frozen ready-meal retailer, which employs 25,000 people to purvey classics such as the Deep Pan Doner Kebab Pizza and Baileys Dome Gateau at £1 and £3 respectively, was voted the UK’s number one Best Big Company to Work For in 2012 in the annual Sunday Times Best Companies survey, and number two in 2013.
“And do you know who we beat?” asks Iceland founder and chief executive Malcolm Walker excitedly. “Goldman Sachs!”
Walker – who drives a Bentley, registration plate 1CE – revels in the incredulity this fact arouses. “It’s so funny because that’s not people’s perception of us. But the point is, it’s not the amount of money in your wage packet that makes you feel well paid, it’s how you’re treated.” His philosophy is evident in what he pays his shopfloor staff – £6.75 per hour, which is just above the minimum wage for over-21s.
“Other retailers talk about products, pricing and marketing, and all of that’s important, but the difference comes in the sales in the store – between a store where the staff are enthusiastic and another where everybody’s miserable. Our secret ingredient, and I’m passionate about this, is staff morale. We spend millions and millions of pounds on it. Every penny is an investment.”
Walker is dismissive of received management lingo about process, procedure, corporate governance, steering groups and so on. His version of a successful business plan comprises four bullet points: Simplicity, Focus, Accept Reality and Have Fun. And last year Iceland reported sales of £2.64bn and plans to open 40 new stores.
Despite his willingness to play the “big boss” in cameo – flying to stores with a briefcase packed with banknotes to deliver prizes to staff – he doesn’t build himself up as a personality.
“I’m quite a modest person,” he says. “Your staff have got to love you, and I think they do. Now that’s a very immodest thing to say and I’ve never said that before, but if I was an a*** like Alan Sugar, or I was boastful, it wouldn’t work. Your staff have to think you’re a nice person.”
In the same vein, Walker doesn’t care to prescribe business models for other British ventures. “Because I founded my business, and I’m still here 43 years later, Iceland is in my image,” he says. “That suits our business. It might not suit others.”
Walker’s company, which began as a small shop in Oswestry, Shropshire, is now the subject of a three-part BBC2 documentary. On one level it presents an insight into the war zone that is budget-food retailing, complete with a lobbed-in grenade in the form of the horse- meat scandal. On another level, it’s a hoot. There’s much comedic value in watching the effort involved in finding novel ways “to add value to a king prawn” or in seeing the party-food supplier in Thailand struggle to create a visually attractive “all-day English breakfast” Christmas nibble.
In the first episode, Walker is asked how he’d describe himself. “Cowboy,” he says with a good- humoured smirk. In person, sitting in a London hotel, he expands further on his management style. “It’s chaotic. We make decisions in the corridor, in the pub, in the back of the car, on the hoof. We don’t really have board meetings, and if we do, we forget to show up on time, then tell a few jokes. For us, it works.”
Walker’s Iceland saga began when he and a colleague found an empty shop and persuaded the landlord to let them have it with a down payment for the first month’s rent of £30. “This was 1970. Supermarkets didn’t have frozen food sections. We bought catering sacks of peas, chips, burgers and fish fingers on credit. At the end of the month we had money in the bank.” Walker’s hunch for the appeal of frozen food coincided with change in domestic habits.
“By the time we had 25 shops, our customers had chest freezers in the garage so we had evolved from selling to people without a freezer into a freezer centre selling packeted products,” he explains. “Then people got fitted kitchens. Housewives went out to work. Slowly we became a ready-meal shop. None of that evolution was planned, but I’ve got this phrase: ‘If you’ve got your finger on the high-street pulse, you can react as changes are occurring.’”
As expressions go, it’s not as snappy as his mother’s. “She used to say, ‘Big, better, best. Never let it rest until your big is bigger and your better best.’ People ask if I’m happy. I’m not. How can you be happy if you’re an entrepreneur? I’ll be happy tomorrow.”
In the course of 43 years, Walker has seen his company expand, float on the stock market, suffer a profits dip and acquire the Booker cash-and-carry business. In 2001 he retired, only to return four years later after Iceland, without its founder at the helm, went to the verge of bankruptcy. He took over the company, turned it around and last year led a management buyout. Walker cites no influences on his way of doing business. “But the guy I admire most is Steve Jobs [founder and CEO of Apple]. We have a lot in common, I like to say in an immodest way! He was a nutter, irrational, impulsive. He ran his business like we run Iceland.”
Iceland Foods: Life in the Freezer Cabinet tonight, 9:00pm, BBC2