Richard Walker

Executive chairman Richard Walker revealed the updated figures in a satirical video posted to his X account

Iceland Foods has hailed the impact of its microloans initiative over the past year, after reaching a key milestone in the number of customers helped.

The supermarket first launched the Iceland Food Club in conjunction with lender Fair For You in August 2022, as a means of helping customers struggling with surging food prices

In a pre-Christmas update, the supermarket said it had now lent £7.2m to a total of 28,000 customers since its launch. The figure includes an additional £2m investment announced in September.

Iceland executive chairman Richard Walker revealed the figures in a satirical video posted to X, formerly Twitter. During the video, Walker apologised to loan sharks for “taking” £7m from their pockets, making their Christmas “less merry”.

As evidence of the scheme’s impact, the supermarket cited results from an independent study of early trials of the Iceland Food Club conducted by the Centre For Responsible Credit, which showed that 71% of customers who used the scheme said they were less likely to have fallen behind on rent and council tax.

A separate study of 2,000 people – which included 466 parents – conducted on behalf of the supermarket found that 51% of parents said they were likely to cut back on Christmas traditions, or forgo spending as a result of the cost of living crisis, which made them more likely to turn to other sources of income, which could include loan sharks. 

Iceland’s ethical credit scheme provides loans of between £25 and £100 in the form of pre-paid cards that can be used to buy Iceland groceries in-store or online. Customers pay back in instalments of £10 a week, though they can pay more if they choose.

When Iceland initially trialled a precursor to the nationwide scheme in January 2022, the loans had a small interest rate equivalent to 55.6% APR. However, Iceland agreed to take on the interest payments on behalf of the customer after the initiative was rolled out more widely, effectively making the loans interest-free.

“Iceland have gone above and beyond to work with Fair for You to make the Food Club interest free for their customers,” said Fair for You CEO Simon Dukes.

“We’re delighted that other retailers are interested in following Iceland’s lead in finding innovative ways to help people to afford household essentials with access to affordable and responsible credit.”