Costcutter is planning for a major expansion of its licensing scheme to help new retailers enter the sector and to offer existing retailers a low-cost route to build their business.

Addressing more than 150 retailers at Costcutter’s conference in Vilamoura, Portugal, managing director Colin Graves said: “Costcutter is on the acquisition trail, and we wish to acquire stores to be operated under a licence agreement by independent retailers. Our new licensed operation for retailers ensures that they can make profits out of stores without having to invest large amounts of capital.”

Graves said the new scheme would enable retailers to develop a substantial business in partnership with Costcutter and added: “This is truly the way of a symbol group acting and performing like a multiple.”

Costcutter has two divisions of company-owned and run stores, Ebor in Yorkshire and Primex in the south, and Graves revealed that many of the Primex sites had already been licensed to independent retailers.

At its peak it operated more than 20 sites but it was down to seven, and the remainding stores were likely to be licensed or sold off, revealed Graves.

He said the company believed independent retailers could run stores better than any company: “It is proven that
people running their own stores will always do better in sales and profitability.”

Graves said the group would seek acquisitions throughout the
UK and would also be interested in helping independent retailers who had already identified likely sites.

Turning to the overall group, Graves told his audience that central invoiced sales to members were up by 13% in the first four months of the financial year, and that new Costcutter stores were being opened at an average rate of four a week.

But he warned there were threats to the independent sector and called on the government to bring in firmer policing to combat vandalism, violence and theft.

The national minimum wage also had to be kept at realistic levels, he said, otherwise small businesses would suffer severe profit erosion.

He also called for European bureaucracy’s interference with the running of small stores to be minimised.
John Wood