UK inflation rates struck a 41-year high in 2022. Food prices climbed 17.6%, the second highest in Europe. Iceland Foods, a value supermarket that serves many vulnerable UK communities, saw the harsh reality of growing food insecurity among their customers. So, we charted a new CSR initiative to battle food poverty, making Iceland the UK’s first “social lender”. Iceland Food Club offered an innovative payment solution; 100% interest-free, micro-loans, distributed to customers in the form of prepaid debit cards. Better yet, the model was sustainable so any retailer could adopt it and deliver financial assistance to customers with compassion.

Record inflation dealt a heavy blow to UK consumers in 2022. Food prices climbed 17.6%, the second highest in Europe, seriously impacting households already living payday to payday. Iceland Foods, a UK family-owned, value supermarket -- whose 1,000 stores serve many vulnerable communities -- saw food insecurity grow. For some customers, it was a choice between eating or heating. 65% had borrowed money to pay bills; 8% were turning to loan sharks. Worse, food insecurity was disproportionately affecting children during the school holidays. It was becoming a familiar scene: customers setting a spending cap and abandoning food they couldn’t afford at checkouts.

This was a chance to be a force for good. So, we tackled food poverty head on and launched the first ethical credit solution for struggling customers: The Iceland Food Club.

The UK inflation rate struck a 41-year high in 2022. As the cost of basic human needs such as food, electricity and petrol ballooned, nearly one in four UK households reported skipping meals, going hungry or not eating for an entire day. Food bank use had increased 38% year-on-year and as a result, there were now more food banks in the UK than McDonald’s restaurants. An estimated 1.1M people in the UK were falling prey to loan sharks in desperation. While the lowest-income families with children qualified to participate in government-subsidized free or reduced school meal programs, with the dramatic cost of living increases, many hundreds of thousands more were now struggling in the crosshairs. But even with some free meal support, the school holidays proved a test on family budgets. It required an urgent response from the UK business community to address growing food poverty in creative new ways.

The Iceland Food Club was a novel yet simple idea: Iceland would be the first supermarket retailer to offer customers small micro loans that were entirely interest-free across the year to address short-term food insecurity -- and sustain families through difficult weeks when budgets simply couldn’t stretch far enough. Partnering with not-for-profit UK lender; Fair For You to administer the program, Iceland aimed to give shoppers the little extra cushion they needed to get by. Fair for You worked out highly flexible and comfortable repayment terms with customers. And in return, Iceland Foods picked up 100% of the interest charges on this extended credit for its customers. It was a pioneering new CSR approach and an ethical lending first. Better yet, the model was sustainable. Any retailer around the world could conceivably adopt the practice and deliver financial assistance to customers with similar compassion and dignity.

Credit is a controversial subject to navigate. Our strategy was to pioneer an innovative new form of social lending that was fair, ethical and compassionate. Shoppers could join the Iceland Food Club and apply for small £25-£75 micro loans through Fair For You, to help them stretch their food budgets during challenging weeks. The funds were distributed in the form of prepaid debit cards. There were no hidden motives or fees. As a privately-owned retailer, Iceland could streamline the process, waive all interest charges, and make a direct and meaningful contribution to the customers and communities it serves.

With compelling research, a new corporate social responsibility narrative, and an innovative real-world solution to help Brits battle food inflation and food insecurity, we cultivated credible government, political and community stakeholders as advocates and influencers ahead of launch and targeted a broad media base to introduce the concept.

Iceland Foods’ Executive Chairman, Richard Walker, played a central role as our campaign messenger, while our partnership with Fair for You added reach and legitimacy.

The troubling data points from our customer research, evidencing sharply rising food insecurity in UK households, set the stage for the launch.

Knowing the sensitivity of the announcement, our media strategy was two-tiered. We contacted regional outlets across the UK under embargo, giving them the lead time to fully understand and run the story. In parallel, we created an exclusive broadcast media package, building the story on our chosen outlet – BBC One Breakfast – watched daily by over one million. Securing that on launch day was significant, as it led to key industry endorsements, and a follow-up breakfast interview on Good Morning Britain.

Then we secured wider coverage in BBC Radio 5 Live, Times Radio, The Guardian and The Sun to sustain momentum.

50,000+ Iceland customers applied to Food Club in the first week.

Loan applications now average 4,000 daily. Of those approved, 66% would have been turned down by UK lenders.

Iceland has underwritten over £100,000 in interest charges.

£6million in loans granted, resulting in £9million of Iceland instore and online spend. Proving that doing good, can also be good business.

83% of Iceland Food Club members are families with children; 64% aren’t currently working. Thanks to the micro loans:

>Reliance on loan sharks has declined by 82%.

>92% previously using food banks no longer or rarely need them.

>71% report being better able to pay for food, rent and essentials.

>65% say their diet has improved.

>57% report feeling less anxious, stressed or depressed.

The programme launch was 100% dependent on a modest earned media budget. The PR team landed 132 unique pieces of coverage generating 1.8B earned media impressions.

In 2022, the cost of food spiked 17.6% in the UK, the second highest in Europe. Family-owned value supermarket Iceland Foods, which serves many vulnerable communities with its 1,000 stores, couldn’t stand by as food poverty grew. For 50+ years, it’s been committed to “doing it right” and tackling local social issues in progressive ways. The idea to be the first to offer interest-free micro loans for food was born from the insight that food insecurity was disproportionately affecting children when schools were on holiday. While the lowest-income families with children qualified to participate in government-subsidized free or reduced school meal programmes, with the dramatic cost of living increases, hundreds of thousands more were now struggling in the crosshairs. Today, over 4,000 UK families apply daily to Food Club. It’s the first “social lending” programme of its kind; Iceland has already donated £100,000 to keep the loans free for customers.