Major UK symbol group operator, Costcutter (part Bibby Line Group) has revealed sales down 18.5% to £512m for the year to 31 December 2017. Store numbers declined to 1,776 at year-end as a result of lost members and exits from unprofitable contracts. And performance was also impacted by falling service levels from, and the eventual collapse of, its supply partner Palmer & Harvey.
Further losses expected to impact 2018 results
With these figures covering the period up to one month after the collapse of Palmer & Harvey, they do not capture the persisting disruption to Costcutter supply that continued until the 'go live' of the replacement deal with Co-op, which completed in June. This is likely to have had significant negative impact on Costcutter turnover in the first half of 2018 above all.
Purchase loyalty fell to 50% post P&H
Speaking to Convenience Store magazine, Costcutter Chief Executive, Darcy Willson-Rymer has revealed that in the aftermath of the collapse of Palmer & Harvey in November 2017, purchasing loyalty of Costcutter retailers fell to 50%. Without Palmer & Harvey, supply was maintained through interim agreements with 12 other wholesalers, at nil profit to Costcutter. With the new supply deal with Co-op now in place Costcutter aims to return purchase loyalty to 75-80%.
Commenting on the results John Cresswell, Chief Executive of Bibby Line Group, the Costcutter parent, said:
'We are pleased to report that Costcutter has now closed the chapter on Palmer & Harvey. We have continued to support the business throughout and are optimistic about the benefits of the new supply deal with Co-op. The business is now focused on growing sales by delivering the best retail offer in the convenience sector.'
IGD Food-to-Go 2018
8 November 2018, London
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