Frozen food retailer Iceland is to change its name to the Big Food Group as part of a shake-up designed to restore the company's fortunes.

The retailer unveiled its new name as it announced that profits before taxes and other charges for the six months to mid-September fell to �16.7m, down from �33.4m same period last year.

While total revenues rose sharply, this was due to Iceland's acquisition of the Booker chain of cash and carry stores earlier this year.

Food sales at Iceland stores, in contrast, fell by 1.9% compared to the same period last year.

Organic gamble backfires

The profits slump is linked to price cuts and other promotional activities launched since September.

But the decline in sales suggests that the store has not fully regained consumers' confidence since former chief executive Malcolm Walker decided last year to turn much of its shelf space over to organic products.

The store, known primarily as a low-cost retailer, was forced to put up prices, driving away a large proportion of its customers.

Analysts accused the store of seriously overestimating consumer demand for organic food.

New chief executive Bill Grimsey, who scaled back the store's organic food operation at the beginning of the year, said on Thursday that the company's sales are "stabilising".

"I am pleased by the progress we have made to date," he said.

Store refurbishment plans

Iceland aims to attract more customers with a three-year store refurbishment programme, due to start next year.

It also plans to beef up its online sales operation, aiming to target 'cash-rich, time-poor' consumers.

Iceland's lacklustre performance comes at a time when the wider UK retail sector has been performing relatively strongly.

Investors have punished Iceland for lagging behind, halving the company's share price in the last year.

But they gave the company's latest figures a cautious welcome, and by the close of trade Iceland's shares had lifted 11p to close at 178p.

The company will change its name to the Big Food Group once its shareholders have been consulted, but its stores will continue trading under the Iceland name.