Last month, Iceland received 50,000 applications for its newly launched Food Club, which offers customers loans of £25 to £100 to pay for groceries at the retailer. The interest-free loan is given on a pre-loaded card and can be repaid in instalments of £10 per week. Iceland launched the Food Club, with non-profit lender Fair For You, in the summer specifically to help families unable to access free school meals during the long holiday.
Similarly, a number of ‘buy now, pay later’ companies have also launched, enabling customers to pay for groceries at a later date. One company, Flava, claimed it offered “a full range of groceries” found at a supermarket or local store, and £100 interest-free credit.
Both models have faced criticism, with MP Stella Creasy criticising Iceland of increasing debt for customers. However, responding to criticism, Iceland managing director Richard Walker said: “Some critics have been quick to come forward and say that buying food on credit cannot be the answer.
“Usually, I note, these are middle-class people, who have no difficulty accessing mainstream banks themselves and would not think twice about paying for their own weekly shop with credit cards.”