Iceland’s new convenience format makes a Swift impact

Under normal circumstances, the opening of a brand-new grocery concept would have analysts and journalists flocking, Amazon Fresh style, to the launch.

However, these aren’t normal times, and Iceland’s choice of Newcastle for the unveiling of its first Swift convenience store yesterday meant that retail observers were well outnumbered by real customers.

It’s fairly rare that the North East is the site of a new retail format, so it was a pleasure and a novelty to be one of the first analysts on the scene, making the short hop across the Tyne from Gateshead – while suitably masked and distanced, of course.

Location

On the face of it, Newcastle’s Benton Road is an unprepossessing location for the launch of a brand-new retail fascia. The store sits in an unremarkable 1930s parade, serving a residential community that straddles High Heaton in Newcastle, and the neighbouring areas of Benton and Longbenton across the border in North Tyneside.

Meanwhile, the store itself – converted from a long-established Iceland – is, at 1,700 sq ft, the smallest in the company’s entire 1,000-strong estate. It wasn’t an obviously well-loved store, either – as recently as 2010, it was still bearing the old-style logo that the company had retired a decade earlier.

Look a little deeper, though, and the appeal of this location for a new retail concept becomes more obvious. As Matt Downes, Iceland’s Head of Format Development told me, Four Lane Ends might be the chain’s smallest store, but traffic monitoring had revealed that it was the 33rd busiest in terms of passing vehicles.

Combine that with a hospital and HMRC campus up the road, a major transport interchange nearby, plenty of free parking in front of the shopping parade, and that large residential catchment, and the rationale for a modern convenience store here makes sense.

Equally, the presence of full-size Farmfoods and Heron stores at Longbenton’s main shopping centre, less than a mile away, surely reinforced the case for this mini-Iceland’s reinvention.

First impressions

Iceland HQ had clearly gone to town with the promotion of the new store – Swift posters adorned every available space at Four Lane Ends Metro station, with further banners and bollard sleeves in the vicinity of the store itself.

The brand looks really good too – the Swift logo is bold and hard to miss, while the blue and yellow colour scheme looks fresh, modern and appealing. Finally, the frontage is framed by light-blue tiles, a stylistic device that continues inside the store.

On Twitter, some wags have argued that the new store’s name and styling could make people think it was a bike repair shop rather than a grocery store, and questioned why Iceland had chosen an entirely new brand rather than a Local or Express-style suffix. Certainly, as with any new fascia, there will be work to do in building brand recognition – though, judging from the local advertising blitz, Iceland has that one nailed.

Meanwhile, it’s clear that Swift is much more than just a mini-Iceland – certainly not the local delivery hub that some had envisaged from the name, but instead a viable and interesting convenience store operation that includes some of Iceland’s best bits alongside a much broader offer.

As you would expect from a convenience store, the new opening hours – from 7am to 10pm, seven days a week – are also now much extended compared to when it was Iceland.

Instore welcome

Alongside the requisite hand sanitiser, the entrance to Swift is bright and welcoming, with the logo and store’s location set against a darker tiled background, and a poster that pushes Swift’s “Fast – Fresh – Local” messaging. The “We Love North Tyneside” image, against a picture that is obviously Newcastle Quayside, is clearly designed to cover all bases of the store’s border-straddling location.

At the entrance, customers are also introduced to the shop’s colour-coded categories – from bright green for “Fruit & Veg” to dark pink for “Beer & Wine” – which are carried through in both the handy and visible high-level signage, and the shelf-edge labels throughout the store.

Inside

It’s no mean feat that Swift has managed to double the former Iceland’s store range – from 1,500 lines to 3,000 – without making the space feel overwhelmed.

The most obvious change is the new vertical fridge and freezer cabinets that replace the old chest freezers, and the tweaking of the layout to squeeze in an extra aisle. From a practical point of view right now, this makes it a little challenging to pass someone in an aisle while maintaining social distancing, but customers will no doubt be asked to wait outside if there is ever a time when the store risks getting too crowded. Certainly, the 12-strong team – all of whom have transferred from the former Iceland – seemed to be on the money in helping customers and greeting them like old friends.

Aesthetically, the store also looks impressive. As well as the tiling throughout, which ties everything together and gives the shop a classy feel, the crisp lighting and dark finishes to the fixtures all convey a look that is modern and smart. Only the supermarket-standard speckled floor tiles, which look to be inherited from the former Iceland, are a slight disappointment, though customers will likely be too interested in their shopping to pay too much attention to where they are walking.

One of Swift’s most interesting innovations is the way it has merchandised key ranges by product type rather than, as is more traditional, separating frozen from chilled. So, in other words, if you want pies, the frozen and chilled versions are next to each other in adjacent cabinets, with the colour-coded shelf-edge labels signposting which is which. It’s a logical approach – after all, a customer heading to a convenience store is likely going there with a particular meal in mind for later that day, so finding the right foodstuff is arguably more important than where that product is stored.

Elsewhere, tobacco products are stowed away in the kiosk at the front of the store, and there is also a small selection of greetings cards. Newspapers and magazines are not stocked, though.

Highlights

At the back of the store, eyecatching Greggs and TGI Fridays cabinets continue two of the partnerships that Iceland has become known for in its eponymous stores, while the convenience retailer staple of the Costa Express machine is present and correct. Again, placing the high-level Costa Express logo against the tiled background that runs throughout the store does a surprisingly effective job of unifying different logotypes.

As you would expect, Swift also makes an effort to help the customer shop by highlighting various meal deals. The “Meal for 2” promo – comprising two Iceland pizzas, a tub of Ben & Jerry’s ice cream, and either beer, wine or Shloer – is eye-catching value for £8. Meanwhile, positioned at the front of the store by the tills, the “On the Go!” offer – featuring a sandwich, snack and drink for £3.50 – seems intended to hook in all that passing traffic that was mentioned.

Interestingly, quite a few customers were coming into the store expecting to be able to buy hot breakfasts and lunches – a misreading, perhaps, of a headline used in the local press. Still, if Iceland wants to consider competing more squarely with the nearby Greggs, it perhaps represents an opportunity for future range expansion.

Price

One obvious question is whether Swift, as a convenience concept, means that customers are now paying more than they used to when the store was Iceland. Matt Downes’ answer was a clear “no” – most prices are the same as in a regular Iceland store, while some are a little more, and some even a little cheaper, depending on the local competitor situation.

In a location like Four Lane Ends – where Today’s Local and Tesco Express have established shops just a few doors away – this price competitiveness is likely to stand Swift in good stead, especially where customers already know and trust the Iceland own-brands that Swift stocks.

Matt Downes was also clear that Swift will not be a store that is awash with offers. The shelf ends nearest the entrance feature some “Don’t Miss Deals” – currently Easter themed – but the focus, much like Iceland, will be on offering what he described as “great value” all year round.

Tech

Contrary to some expectations in advance of the opening, Swift certainly isn’t Iceland’s answer to Amazon Fresh – and it’s unlikely that such a concept would be entirely welcomed in a community that seems to include a lot of older residents, and where shoppers were clearly delighted to catch up with the friendly instore team after the shop’s four-week makeover.

Equally, there’s no attempt here to bring in other tech that is often talked about, but less rarely implemented, in UK grocery retail, such as electronic shelf-edge labels.

The introduction of two self-scan tills alongside one manned kiosk – replacing the three manned tills in the old store – is just about as techy as it gets. Swift, clearly, is about being the best “fast, fresh and local” convenience store it can be, not a hotbed for tech innovation or new modes of delivery.

Next steps

The obvious question is whether this first Swift is likely to be a one-off experiment or the start of something bigger.

Iceland’s own press release about the launch teases the latter, pointing out that the company’s “last ‘one store trial’ of a new store format was The Food Warehouse in 2014 and we now have 140 stores”. Iceland’s MD, Richard Walker, goes on to suggest that, if successful, “there is potential to expand it both within the existing Iceland store estate and beyond to expand our existing network of stores”. In other words, Swift could represent a new way to not only maximise the impact of smaller Iceland stores like Four Lane Ends, but also to give the company a toehold in new locations not suitable for a full-size Iceland or Food Warehouse.

Matt Downes, who is the brains behind the Swift format, was perhaps a little more cautious. He told me: “There is an opportunity to think about how we grow in a smaller unit, but first we have got to see if customers like it. Only then will we make a decision on more”.

So, based on the overwhelmingly positive feedback from customers on the opening day, and the overall strength and appeal of this new convenience format, don’t be surprised if we yet see a rollout beyond Newcastle that is Swift in both name and nature.

All photographs and videos by Graham Soult