Chilling with Tarsem Dhaliwal from Iceland Foods

This week we are interviewing Group MD, Tarsem Dhaliwal from Iceland Foods about where it all began, how he has grown within the industry, the mantras he lives by and what is next for the successful retailer!

So Tarsem, how did the journey begin?

The journey first began when I was born in India, in Punjab, my father came to the UK in 1966 by himself and then later in 1967 he brought the entire family over. We set up home in Warrington when I was 3 years old, so to argue academically, I was actually three years behind everyone else, which may explain my academic results!

The real big change was when my father had TB in his foot which meant he couldn’t work for the Warrington Wire Company; this is when he decided he needed to do something else, from this he became a market trader with markets in Wrexham, Ellesmere Port and Birkenhead selling women’s wear and that’s really where it started. Over the holidays I would be required to help out and work on the market stalls – which I hated! But at that time I didn’t accept what I was learning because as a child, you don’t - you would much rather be out playing football and spending time with friends.

After school, I left with one A Level and decided to go to Kelsterton College in Connah’s Quay where I got HND in Business Studies. I joined Iceland as a trainee accountant at the young age of 21, and then became fully qualified over the next few years. At the time for me the reality was I was going to qualify and flutter off and do something else but it got into my blood. I didn’t pursue a career with the belief that in three years’ time I would be higher up the ladder, I just did what I enjoyed doing which at the age of 28 led me to become the Finance Trading Director.

I was with Iceland for 17 years before I got sacked… but this wasn’t because I did wrong, but because new management came in and believed I was part of the ‘old guard’ and therefore wanted a new set of people. This was the same time that Malcom Walker parted with the business. During the four years following my departure from Iceland I carried out many new adventures, I invested in a fish business, a horse stud, I ran a radio station and a meat packing business – so lots of jobs in lots of little companies which taught me a lot about all aspects of a business and taught me a lot about myself.

During 2005, myself and Malcom and a number of investors came back and actually bought Iceland and took it as a private business. At that time, the business wasn't performing well and it was losing money. Since taking over we have managed to grow it to a £2.8 billion business, with over 900 stores in the UK, 26,000 employees and nearly 5 million customers shopping with us weekly. In addition we have 5 depots across the country, stores in the Czech Republic and franchises in Spain and Malta.

Can you pinpoint a time in your career which was a particular highlight for you?

There has been plenty of highlights such as buying Iceland in 2005, taking it from bankruptcy almost to where it is today. However, I think of that as a journey – every step that came with that journey has been an achievement and we continue to take more steps in order to keep moving forward

Strangely one of  the greatest feeling I have is waking up. People think what does that mean? Nobody lives forever so just waking up in the morning is a great feeling because you have another day. This means you need to make the most of it, and enjoy it! Do those things that you want to do. Be confident and positive in work because the opportunity may not come again. I love waking up, so that is my highlight everyday. I have done lots of things in my business life, I have bought businesses, sold businesses and made successes, but you kind of put them behind you and move on to what you’re going to do as opposed to focusing on what you have done.

So, for me it’s what I’m going to do which is my highlight and my best achievement as opposed to what I have already done.

As the chain began expanding, how did you feel?

When I started in this company back in 1985, we probably had around 110 shops and  every year  we have opened 30 or more, so it just became normal to be growing. However, the big change that we did have was around 1989 when we bought a company called Bejam – another frozen food retailer who were based predominately down south. Bejam were three times the size of us and they were a PLC and so were we at the time, so we did a hostile takeover. We went from having roughly 180 stores to having something close to 470 shops – the integration did take a while but then we began opening up stores again to around  50 per year.

You don’t actually realise what you have done until you look back, and then that’s when you realise you’ve got a big business here!

What are the 3 most important aspects of running a successful retailer like Iceland?

Whether it is Iceland or anything, there are three things I always say;

Never give up, keep going

There has always got to be a way, if we can send people to the moon then then we can achieve most things . There will be times when you are knocked back, but it is so important that you just don’t give up.

Care about what you’re doing

This isn’t necessarily a business strategy, but the concept of just caring – care about what you do as a person, however small the activity is or mundane, care about doing it well.

Look after your cash flow

The most important commodity to a business isn’t the products they sell or how they sell it, it’s their cash flow and without that you cannot do anything or move forward. So just manage your books well, know what you’re spending and what is coming in and what’s going out.

Looking back, is there anything you would do differently?

-If so, what would you change?

I wouldn’t change anything, if you are happy with where you are today then everything you have done in the past has been the path to get you where you are today.

I wouldn’t say ‘3 years ago we should have done this or that’ because if I had, then I would be in a different place right now, and that place may not have been as good as the place that I am in right now.

If you weren’t so successful in Iceland, would you have worked in a different industry?

Retailing is great – it’s fast, it’s quick you’ve got to be on your toes, but you’re only as good as yesterday’s sales. Customers, especially in this industry, are very promiscuous. They move from one retailer to another simply because of  price. But one thing I have learnt is price is short-term and quality is forever. Anyone can sell something cheap, but the chances are there is someone out there selling it cheaper and that is why quality is always key. You can only sell something of bad quality once because the customer won’t come back.

I would try anything new, I’d love to do anything connected with Manchester United – if Manchester United came in and even offered me a job as a petty cash officer I would take it tomorrow, but unfortunately they won’t!

What is next to come for Iceland Foods?

More of the same, people have this prejudice about Iceland, they think they are tatty old shops, selling chicken nuggets and that’s it. So we are trying to change people’s perception on two things; frozen foods and Iceland. We want people to steer away from the idea that it is cheap and poor quality foods because it’s not, it’s good quality food and it is natures way of preserving things.

Take fish for example, there is no such thing as fresh fish – unless you catch it and eat it there, it’s not fresh. Most of the fresh fish that is sold has already been frozen at one stage earlier on, because it is impossible to keep fish frozen once it has been caught in the Pacific Ocean and brought all the way to the UK. But, with frozen fish like the ones sold at Iceland it is caught at sea, frozen within one hour with all the goodness still in there.

We are also refitting our stores to look more modern and an even more pleasant place to shop, which complements the great food we sell and the fantastic people we have working for us.

To add, we also have the Iceland Food Warehouse, bigger versions of Iceland stores, out of town and typically one that you will drive to. They are on average about 10,000 square foot, so very different to the in town stores – the range of products they stock is larger and the operation is bigger. We currently have 42 of them and the plan is to expand them.

There is also, the 'online' side of the business. The first time I was here, back in the 1990’s we were the first food retailer to offer online retail. We had all the vans for each store but rather than orders taken via the internet, it was abled by calls from our customers.  Now it is all done via the internet and Iceland was voted the best on line retailer this year, beating Tesco and Ocado.

What sets Iceland apart from your competitors?

Iceland is a family business, where everyone cares. We are privately owned which makes a big difference. An expression we often use is that ‘we are long-term greedy’ which means we plan to be here in the next 20 years and so on! Some businesses will have short-sighted objectives, and yes they are still important because today’s sales pay for today’s rent but we want to be here in twenty years’ time and we can be, because we are a private business, we own it, so we can make the right decisions for the long-term .

Food retailing in the UK is very competitive, when sales growth is struggling, companies tend to cut costs  we did the complete opposite, we decided to invest further, in people, quality, marketing – all things that other companies wouldn’t do in that situation because we believed in our future.

What Iceland wants is sustainable sales. We are getting customers to come to us because they want to, not because we are paying them to come to us. I could increase our sales overnight by 20% - I’d just cut the price of everything or give out vouchers but that is not something you can do forever. You want customers that are going to come along who want to come because of our prices, our quality and our service.

Our thought process for running a business is as follows;

Simplification - The way forward is simplification, keeping it easy and simple, because if your customers can’t understand what you’re trying to sell to them, they won’t buy from you.

Focus - Focus, this is all about not losing track of where you are, and sticking to what you’re good at and not trying to be something your business is not.

Urgency - Urgency, that is doing it quickly, do it with pace, just get on with it.

Accept Reality - Accepting reality is something a lot of people don’t understand, but it just means if you are not doing well, accept that and admit it, if things haven’t worked, then just say they haven’t don’t beat around the bush by convincing yourself it didn’t work because of this or that, move on because the longer you create excuses the longer it takes to fix.

And… Have Some Fun - And then importantly just have some fun, we spend a lot of time in work so as well as working hard, have some fun while doing it.

We also have this other mantra which is located in our boardroom;

What are the most important values of the Iceland brand?

Good value and quality.

When I look out of my office window, I can see our development kitchen, which cost around £2.5 million. It is a statement of intent, to say to people internally and externally that we care, and that passion goes into our food that much so we are willing to spend a significant amount on a development kitchen, where we develop and test products and then measure them against our competition because what we are is what we sell.

A famous quote which I have in my office is by founder & CEO of Amazon, Jeff Bezos – ‘your brand is what other people say about you when you’re not in the room.’ The reality is, people will say derogatory things about Iceland, but we have also done well on the back of the stereotypical thing such as selling chicken nuggets, and having brand ambassadors like  Kerry Katona which both performed well. However, these things do have a timeline and you have to move on from that.

What do you do to unwind outside of Iceland?

Well, I try to unwind but it is hard being an owner of the business which means you can never fully switch off. Yes, you can relax and and enjoy time with family and friends, watching the football and going on holidays, but the reality is you’re never fully switched off. This doesn’t mean that you’re constantly receiving phone calls and emails but that you are always looking out for stuff potentially in other retailers, restaurants, on the street and think that’s interesting, why aren’t we doing something like that? But I enjoy it, funnily enough that helps me unwind.

But how do I relax? Well, that’s with the family, going abroad and taking trips. I love watching Manchester United and relax when I spend time with friends, enjoying good food and drink and of course spending time with my wife, Louise.

Louise also works here at Iceland as the IT Director. As we all know, IT is very much a 24/7 operation so if something goes wrong and Louise knows, I will also know and that will add stress as well. I do worry about everything but worrying/stress is good, it keeps me thin.

If you could give one piece of advice to an aspiring entrepreneur what would it be?

Never give up! It’s easy to just give up and I know it sounds simple but entrepreneurs give up too easily. Every individual that has ever been famous  has had failures along the road but the key is to get up and go again, find success in whatever you do and never give up.

Finally, what is a typical day for you in the office?

The weeks are never planned out, Mondays and Tuesdays are typically spent dissecting the previous week – what went wrong and what went right and what the plans are for the next week and the one after that. But it’s not like you can fundamentally change it dramatically but you can tweak and this is because everything is planned so far in advance at Iceland. Take Christmas for example, we already know what we are doing then when we are doing it and what the products will be.

Most of my time is spent in meetings, because as a leader of a business your job (as stupid as it may sound) is to lead, it’s not to do. The key is to have the right people doing the right job, in the right direction and your job is to keep them motivated, focused and happy and ensure it all works together!