Delivered wholesaler Palmer & Harvey and symbol retail group Costcutter Supermarkets have announced their intention to close The BuyCo. The 50-50 owned buying alliance was established in 2013 to negotiate the joint buying terms for the two organisations as part of the deal that saw P&H taking on the distribution to Costcutter stores, while Costcutter took over the management of P&H's symbol store estate, primarily under the Mace fascia.
P&H and Costcutter supply agreement 'unaffected'
Having achieved its core purpose of harmonising the negotiating terms for P&H and Costcutter across the joint supplier base, the two partners have indicated that the further benefits that The BuyCo can offer are 'limited', and that it now makes sense for each to take its buying functions back in-house. It is reported that suppliers have been finding dealing with The BuyCo an unnecessary complexity, and that going forward dealing directly with Costcutter and P&H on a separate basis will prove more cost-effective.
Martyn Ward, Managing Director, Palmer & Harvey commented:
"The negotiating and buying functions of The BuyCo are being brought back in house. This announcement does not affect our supply agreement with Costcutter Supermarkets Group, they will continue to be a valued P&H customer."
Darcy Willson-Rymer, Chief Executive, Costcutter Supermarkets Group said:
"It is now the right time to adapt our business and the way we operate to reflect the market changes we are all seeing. Our retailers will still benefit from the value from volume our partnership with P&H delivers and out trading team will ensure we continue to have strong relationships with out suppliers."