As the cost of living crisis went into full swing, Iceland started offering customers interest-free micro-loans to help them afford food. Now the scheme is expanding to support more customers
It’s been a year since budget supermarket Iceland went nationwide with its ethical lending scheme to save customers from turning to loan sharks to put food on the table.
As the cost of living crisis started to bite, Iceland cashiers noticed customers were not coming in store for their regular food shop and were increasingly relying on food banks to feed their families.
A taskforce of Iceland employees started looking at ways to support children at risk of hunger, particularly during school holidays.
They came up with the Iceland Food Club. Working with ethical lender Fair For You, the credit scheme allows financially vulnerable customers to borrow micro-loans between £25 and £100. The loans are in the form of pre-loaded cards to spend on food and are interest-free, with families paying back what they borrowed at around £10 a week. Households can take out cash up to six times a year with the scheme meant to work around the holidays when kids are not receiving meals at school.
It felt like a significant moment. On the one hand, it was a positive step for a major food retailer to stand up to tackle hunger. On the other, a real sign of the times and a moment to take stock and ask: is this really how far we’ve fallen?
The price of food and non-alcoholic beverages rose by 14.9% in the year to July 2023, according to the Office for National Statistics.
In that time, the Iceland Food Club has helped over 23,000 families, feeding around 44,000 children. Overall, 27,000 families have been supported since the initiative started as a local pilot in Yorkshire and North Wales.
It’s had a big impact. A survey of 5,000 Iceland Food Club members found nine in 10 customers who previously used food banks had stopped or reduced their food bank use.
Around 70% of customers said they were less likely to fall behind on rent, council tax or other bills while 80% fewer customers said they had resorted to using loan sharks and two-thirds said their diet had improved.
Richard Walker, executive chairman of Iceland Foods, said: “We have seen the remarkable impact that the Iceland Food Club has had in supporting struggling customers through the cost-of-living crisis. Setting up the Food Club alongside Fair for You has been one of the most transformational decisions we have made as a business, and we know it has been a lifeline for so many families.”
Iceland Food Club has h
