Iceland rewards staff with 6.3% pay rise

Iceland Foods boss Malcolm Walker, vying to take control of the British frozen foods retailer, has awarded staff an average pay increase of 6.3% at a cost of £14.6 million.

Around 22,000 store and home delivery staff will see basic pay climb 5%. Some will also benefit from the abolition of a lower pay rate for employees under the age of 18 and the introduction of a higher rate for stores within London's orbital M25 motorway, Iceland Foods said.

Walker, who with other managers owns about 23% of the business, has said he would like to buy the remaining 77% being auctioned by failed Icelandic banks Glitnir and Landsbanki.

That follows reports in May that Wm Morrison Supermarkets, Britain's fourth-biggest supermarker, could be interested in buying Iceland Foods.

Other grocers, including Wal-Mart's Asda , J Sainsbury, The Co-Operative Group and Waitrose, have said they might be interested in buying some Iceland Foods stores, though they have also played down talk of bidding for the whole chain.

Average weekly earnings in Britain grew 2.6% including bonuses in the three months to June compared with the same time last year.

Walker, who founded Iceland in 1970 and returned from a brief period away in 2005, said hourly pay rates for store staff had increased by 33.7% over the past six years.

Profit before tax and one-off items rose 15% to £155.5 million in the year ended March 25.