Spar retailers have reacted positively to last week's news that the symbol group was forming a buying alliance with high street rival The Co-operative Group.

Mark Gillett, sales director of Spar chain Gillett's, called the deal "fantastic news" while Lizette Craig, MD of Scottish Spar chain Botterills, said: "We're hoping to see reductions in cost prices. We're not seeing what we should be when competing with major supermarkets on price."

Spar and The Co-operative Group have formed the alliance to secure better buying terms in certain own label categories, equating to an estimated cost value of £200m. The Co-operative Retail Trading Group (CRTG) is managing the initiative. Both chains, however, emphasised they will be retaining independence elsewhere and it was not a precursor to a merger.

"We need to implement the idea we already have before we start dreaming up further initiatives, and this is where we will put all our effort for the foreseeable future," said Spar managing director Jerry Marwood.

"A fundamental reason for Spar's existence is to preserve the independent nature of its constituent businesses."

Members of the co-operative movement also welcomed the deal. A Southern Co-operatives spokeswoman said: "As a member of the CRTG, we welcome the valuable commercial benefits this alliance will bring."

The alliance covers categories including paper, cooking oils, dry pasta, fruit juice and frozen foods.