Costcutter has turned to the Co-op to supply its vast UK estate following the collapse of its current supplier Palmer & Harvey.
The wholesale supply deal will see the UK’s sixth largest grocery retailer supply 2200 stores in Costcutter’s umbrella group across the UK, including Kwiksave, Supershop, Simply Fresh, Mace and eponymous Costcutter fascias.
These stores will be offered the chance to become Co-op franchises when they begin to be supplied by the grocer in spring next year, but will also provide immediate support following Palmer & Harvey’s (P&H) downfall.
This will add further weight to Co-op’s rapidly expanding convenience store presence after Nisa members gave the green light for a £137.5 million takeover deal.
This is set to see Co-op acquire 100 per cent of Nisa’s 3200 convenience store estate, should the deal be approved by the Competition and Markets Authority.
“With P&H no longer able to supply our stores, we have activated our contingency plans that will see our retailers supported by the Co-op and other suppliers in the run-up to our deal with the Co-op,” Costcutter chief executive Darcy Willson-Rymer said.
Co-op Food’s chief executive Jo Whitfield added: “We are operating in a dynamic market environment and this deal, coming shortly after our Nisa announcement, shows how we are positively responding to the changes occurring within the sector.
“Our food business is going from strength to strength in what is clearly a challenging retail market.
“We recently reported our 14th consecutive quarter of like-for-like sales growth and this agreement will further strengthen our ability to offer customers great products at great prices.
“Whilst our deal with Costcutter will start formally in spring 2018 we are looking at practical ways we can support independent retailers during this busy trading period, in light of the news concerning P&H.
“It is essential that we maintain a strong independent retail sector and the Co-op is committed to playing its part, along with others in the industry, in ensuring this occurs.”