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Costcutter's new supply deal with Co-op has now been rolled out to all stores in its network, putting an end to over six months of contingency arrangements, in the wake of the collapse of former distribution partner Palmer & Harvey.  The turbulence of the last year saw some 400 stores leave the symbol group, leaving the total number in the network at 1,776 at the end of 2017.  However, it has continued to recruit successfully with some 100 stores joining over recent months.

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Costcutter founder Colin Graves has joined the Co-op as an advisor on its wholesale and franchise development plans.

Chair of new Wholesale and Franchise Advisory Board

Graves will chair Co-op’s new Wholesale and Franchise Advisory Board.  The board was created following the Co-op’s £137.5m takeover of Nisa which completed last month, and the start of its wholesale supply agreement with Graves’ former business, Costcutter.

Wholesaling and franchising a focus for Co-op

Wholesaling and franchising have been identified as big opportunities by Co-op’s food business, helping it to grow sales, buy better and spread awareness of the brand into new communities.  The purchase of Nisa and the deal with Costcutter are already evidence of Co-op’s ambitions in this area.  The new board will look to develop these and other relationships further.

Experienced independent retailer

Graves is a well-known figure in independent convenience retail.  He founded Costcutter in 1986 and led the business for almost 30 years until it was sold to its current owners, Bibby Line Group, in 2011.

Costcutter at IGD Convenience Retailing Summit 2018

Sean Russell, Director of Marketing will share insights on the latest thinking on the convenience shopper, and Costcutter's 'Shopper First' programme at this year's must-attend summit, 26 & 27 September.

 

IGD Convenience Retailing Summit 2018


 

26-27 September, London

 

Convenience continues to outpace big store formats. This year we have launched a two-day event to help you explore every opportunity, possibility and future trend to boost your business.


Find out more »

Former Tesco executive, Mike Hollis, has been announced as the new Retail Director at Costcutter Supermarkets; replacing Jenny Wilson, who has left the business after three-and-a-half years with the group.

Broad retail experience in UK and abroad

Having spent the last four years as Chief Operating Officer at DIY retailer Wickes, Mike Hollis' career has included senior roles at Coles in Australia, as well as Tesco Lotus in Thailand.  This followed more than a decade with Tesco in the UK, where he rose to Stores Director for London and the South-East.

Coincides with launch of Co-op supply deal

The arrival of Mike Hollis comes just at the moment that Costcutter's new supply partnership with Co-op is due to go live.  After some six-months with no overarching single supply contract, Co-op will take on the distribution to the whole Costcutter store network as of 28 May.  Under the terms of the new deal Costcutter retailers will benefit from a simplified structure of charges, with the opportunity to earn up to 6% rebate for hitting agreed loyalty targets.  The minimum drop sizes for the service will be 80 cases of ambient product and 30 for chilled and frozen.

Costcutter at IGD Convenience Retailing Summit 2018

Sean Russell, Director of Marketing will share insights on the latest thinking on the convenience shopper, and Costcutter's 'Shopper First' programme at this year's must-attend summit, 26 & 27 September.

 

IGD Convenience Retailing Summit 2018


 

26-27 September, London

 

Convenience continues to outpace big store formats. This year we have launched a two-day event to help you explore every opportunity, possibility and future trend to boost your business.


Find out more »

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."

Presentations

01/08/2018

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

22/06/2018
Find out how technology is changing the convenience store payment experience, in the UK and globally
11/10/2017
Costcutter has installed technology in its Brunel University outlet that will allow shoppers to pay for their purchases with the veins in their fingertips. This is an industry first in the UK.
View all presentations

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.

26-27 September 2018, London
Convenience continues to outpace big store formats. This year we have launched a two-day Convenience Retailing Summit to help you explore every opportunity, possibility and future trend to boost your business.

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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