With the last Costcutter deliveries made by collapsed wholesaler, Palmer & Harvey, now at least a week ago, distributor Nisa has announced that it is providing stop-gap supply to some Costcutter stores, covering the interval before the launch of the new wholesale deal with Co-op in the Spring.
How many of the 2,200 stores in the Costcutter network are covered is not clear, but presumably they will include the 89 company-owned Costcutter stores run centrally. Press reports indicate that further interim Costcutter supply arrangements are also now in place, with deliveries to other stores being handled by Bestway, as well as Musgrave in Northern Ireland.
Nisa on-boarding Costcutter in advance of the Co-op deal?
With the completion of the acquisition of Nisa by Co-op pretty much likely to coincide with the initiation of the Costcutter wholesale deal, it is convenient that Nisa may already be supplying Costcutter stores in advance. With its heritage as a specialist distributor to independent convenience stores (including Costcutter before 2014), it would seem logical that the Costcutter contract would be intended to be serviced out of the Nisa network in the future anyway. If Nisa is already supplying numbers of Costcutter stores before the formal Co-op/Nisa/Costcutter deals align, it will make the Costcutter switchover a smoother one when it officially launches.
Many Costcutter retailers making their own supply arrangements
While Nisa will make an obvious permanent distribution partner for Costcutter, in the meantime many retailers have already been proactively tapping into other sources of supply. For most, cash & carry wholesalers such as Booker, Bestway and Dhamecha have been the easiest short term solution, while others have been have been supported by fellow retailers sharing upweighted orders from other delivered operators. While these alternatives do not have the convenience of an organised delivery service, the lower cost prices and availability of cash & carry, in particular, may make the future job of 'reconverting' some retailers a tougher one for Costcutter.
Arnu Misra, interim CEO of Nisa commented:
"Our two companies (Nisa and Costcutter) have a successful history working together and I'm pleased that we will be supporting Costcutter at this crucial time. This arrangement will increase our buying power for the benefit of all our members. We look forward to working with Costcutter over the peak trading period, and providing our traditionally high levels of service to them."