UK supermarket Iceland Foods now offering shoppers small interest-free loans for groceries
With inflation raging in the UK, Iceland Foods wants to help struggling shoppers with grocery loans
British supermarket group Iceland Foods will allow shoppers to take out small, interest-free loans to buy groceries, it said on Wednesday, in a scheme targeted at poor households struggling with soaring costs of living.
Iceland will partner with non-profit lender Fair For You to offer loans of 25-100 pounds ($30-$121) through pre-loaded cards to financially vulnerable customers, who can make repayments once a week.
The scheme comes as UK inflation hovers around 40-year highs, having risen sharply in recent months, squeezing household budgets and contributing to a wave of industrial unrest.
INFLATION COULD MEAN HIGHEST SOCIAL SECURITY COST-OF-LIVING ADJUSTMENT SINCE 1981
Official figures on Wednesday showed British inflation had topped 10% in July, spurred mainly by surging energy prices, with forecasts showing prices set to rise by more than 13% in October and cause a long recession.
Elderly shoppers browse the isles of Iceland Foods in Northwich, Britain, on March 18, 2020, where shoppers will soon be able to take out small, interest-free loans from the supermarket for groceries. (REUTERS/Molly Darlington / Reuters Photos)
"More than ever, people are struggling to purchase much needed everyday items during this relentless cost of living crisis, and fresh thinking is required by business and government to find workable solutions," Iceland Foods Managing Director Richard Walker said in a statement.
The loan scheme would offer flexible repayment programs and borrowers would not be harassed by debt collectors, Walker said on Sky News earlier on Wednesday. He also said loans would not be sold off to third parties.
Iceland said its scheme follows a successful pilot with 5,000 customers. Nearly three-quarters of them said they were now less likely to fall behind on bills and 92% reduced their usage of food banks, which provide emergency food supplies to families in need.
WHITE HOUSE NOT SAYING WHEN THE INFLATION REDUCTION ACT WILL BEGIN TO CUT INFLATION
The loans will be limited to six windows through the year to coincide with school holidays when expenses usually rise, Iceland said.