Iceland’s new store: why the Falklands, and why now?

In perhaps the most unexpected British response to renewed Argentinian sabre rattling over the Falkland Islands, Iceland last week announced it would become the first UK supermarket chain to open a store in the faraway British Overseas Territory.

The frozen food giant’s new franchise supermarket, based in Falklands capital Stanley, is to open in December as part of a tie-up with local retailer Kelper Stores – which is owned by Falklands-based seafood supplier Fortuna Group.

So, why the Falklands? And why now?

Iceland’s move is part of an ongoing global expansion, with its products now sold across 75 different countries via wholesale or franchise agreements, the most recent of which was a return to South Korea in August.

But the Falklands expansion comes against the unique backdrop of heightening tensions between the UK and Argentina over the sovereignty of the islands, some 44 years after the Falklands War – a conflict that led to the deaths of 255 British military personnel, 649 Argentines and three islanders.

Firebrand president Javier Milei reopened the long-running diplomatic row over the archipelago on 4 September, insisting what Argentina calls the Malvinas needed to be “recovered”.

The “winds of change” favoured Argentina’s claim to the islands, Milei said in a nationally televised speech, before vowing to intensify pressure on businesses operating in waters around the territory – in comments that were met by a typically stern response by the UK government.

Iceland’s executive chair Richard Walker stressed to ITV last week that the timing of the store announcement was “entirely coincidental”, adding it was “not really our place to wade into foreign policy”.

However, Walker – no stranger to a PR opportunity – also insisted he was “very proud to back British interests”, while the press release announcing the Falklands move was headlined ‘flying the flag’. And in a separate interview with the BBC, he admitted Iceland – which had been in discussions with Fortuna for “quite a long time” – had decided to bring forward its announcement following Milei’s outburst, adding he wanted to “show solidarity” with islanders.

A provocative move?

The timing of the store announcement, plus Walker’s description of the Falklands as a “special part of the British family”, has raised eyebrows in Argentina, with media outlets such as Urgente24 stating it “cannot help being read as a kind of provocation”.

Regardless of this, however, Walker’s key ­messaging around the store mirrors the same cost of living themes he has pursued consistently throughout his tenure at Iceland.

“We think the Falklands is a very underserved market with a lack of competition,” he told the BBC, adding Iceland would offer shoppers pricing “almost 30% lower than competitors” in the territory. “The cost of living is an issue there, so we will bring some much-needed value to the market,” he added.

That injection of value is something the 3,500-strong population of the islands is already “excited about”, suggests Katharyn Daniels, deputy editor of local media service Penguin News.

While supermarkets there already offer a limited range of products from the likes of Waitrose, Co-op, Morrisons and Iceland, the opening of a standalone Iceland in what will be a refurbished Kelper Stores outlet is a “big move”, she says.

“The range of choice available over here isn’t huge, so to have an Iceland offering a much wider range of products, at lower prices, is something everyone is looking forward to.”

Daniels points to staples such as breakfast cereal Weetos as one example of a product she hopes will be cheaper, with a pack currently costing islanders £8 – about double its price in a typical UK supermarket.

Likewise, the price of bananas, at around £4.95/kg, is over double the cost in the UK and reflects the cost of living challenges facing the territory’s population, she points out.

Iceland says the fully-branded store “will reflect the British retailer’s look, feel and customer experience”. It will also be regularly resupplied via “existing shipping routes”.

And while its 1,000 SKU count will be significantly smaller than UK stores, it stresses it will include exclusive ­lines from the likes of Cathedral City, Greggs, MyProtein and TGI Fridays, alongside its core ­frozen and ambient offering.

The partnership with Kelper Stores and Fortuna – which acquired Cornish seafood supplier Ocean Fish last November – could also open up opportunities for Falklands-grown or caught foods to be sold in the UK, Walker told Falklands Islands TV.

Kelper Stores general manager Sarah Clarke also hints at further ranging plans, saying: “If Iceland sell it, we have access to it.”

When it comes to planning stock, Clarke says the first few months after opening will be used to gauge shopper demand for the store’s range, adding it will be a “learning exercise”, particularly given the lead time of supplying the store.

And like Daniels, she says the response from islanders has been “overwhelmingly positive” on local social media pages, while the local population, who she describes as a ”skilled set of people who can turn their hand to quite a few jobs”, will be tasked with kitting the supermarket out in Iceland’s colours.

The first containers carrying stock are en route to the South Atlantic and are due to arrive in Stanley at the end of next month, with the islands being resupplied by the UK by ship every month, Clarke adds. Fresh produce for the store will be supplied by local business Stanley Growers, which typically sources locally or from Uruguay, Brazil and Chile.

Walker has also pledged to make the 8,000-mile trip to “cut the ribbon” at its opening in December, in what he describes as “an important moment for our international aspirations”.

And he does not seem one to back down in front of a touchy Argentinian press.