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This week we visited the latest UK food hall concept to open, the Simply Fresh Foodhall in Manchester’s Stretford Mall. Here we share our thoughts on this latest format and our view on what’s next for foodhall evolution in Europe.

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As reported in Convenience Store magazine, the 2018 accounts (to 31 December) for major symbol group Costcutter show the company's sales fell by 24% to £390m over the twelve months.  This reveals the severe impact caused by the disruption of supply to member stores following the collapse of key supply partner, Palmer & Harvey, in late 2017.

Ended year with 1,560 member stores

As well as the ongoing supply issues throughout the first half of the year, Costcutter was also impacted by the defection of significant numbers of retailers moving to other symbol groups.  The net decline of stores in 2018 was over 200, with numbers reaching a low of 1,500 before recovering slightly as the group's supply situation began to stabilise in the latter part of the year. 

Supply agreement with Co-op seeing sales return

Once the replacement deal with the Co-op began to come on stream in the Summer, Costcutter's sales decline was effectively arrested.  Then with the deal fully bedded in, from August the trend turned increasingly positive, recovering to 2017 levels.  Sales in January and February 2019 are reported to have been up by 15%.  To ensure support for existing retailers and ongoing recruitment of more, Costcutter has invested heavily in up-weighting its business development team, increasing the BDM (business development manager) to store ratio from one to 40, to one to 25. 

Co-op franchise model now ready to roll-out

With the availability of Co-op branded products in Costcutter stores credited with bringing more shoppers into stores, Costcutter now also has three company-owned stores trialling the full Co-op franchise package.  Achieving sales increases of up to 50% in these trial sites, Costcutter will now begin recruiting independent retailers, offering a significant new platform for future growth.

Award winning 'alternative' symbol group, Simply Fresh, part-owned by Costcutter since 2014, has appointed Tim Chalk as its new chief executive.  Kash Khera co-founder of Simply Fresh, who launched the group with his brother in 2009, will remain as chief operating officer.  The group now includes some 90 stores across Great Britain.

Chalk brings international experience in convenience

Tim Chalk was most recently group commercial director at Dairy Farm International the Jardine Matheson grocery retail chain based in Hong Kong with 2,400 stores across 11 Asian markets.  And his career also includes a five-year tenure as the chief executive of 7-Eleven in Hong Kong and Macau, where he oversaw a network of over 1,000 company-owned and franchised stores.

Commenting on the appointment Kash Khera, Simply Fresh co-founder commented:

'The opportunity ahead for Simply Fresh is vast, but to achieve it we must focus clearly on our objectives, mover faster and continue to transform.  A big part of Tim's job is to refine the strategy and accelerate our ability to quickly bring innovative products and services to our customers.  As chief operating officer I will be in charge of the day-to-day operation of the business, allowing me to get even closer to our retailers.'

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

Understand how the food-to-go market is evolving, where the opportunities lie and how industry leaders across Europe are leveraging these trends.

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Key presentation

This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for Costcutter.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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