Source: Costcutter

Bestway hosted a delegation with Sainsbury’s in at least three Costcutter stores in June

Bestway held meetings with Sainsbury’s about a future supply deal for its Costcutter symbol estate last year, The Grocer can reveal.

It is understood the wholesale giant was exploring potential supply options for Costcutter once its contract with Co-op, which supplies Costcutter stores via Nisa including Co-op own label, ends in 2026.

As part of this process, it hosted a delegation with Sainsbury’s in at least three Costcutter stores in June.

A new deal would mark the end of a long-term supply arrangement with Co-op, which started supplying Costcutter stores in 2018. The contract was extended when Bestway bought Costcutter four years ago.

The meetings followed Bestway’s move to accumulate a 4.47% stake in Sainsbury’s early last year, representing an investment of £250m and making Bestway the fifth largest investor.

Costcutter retailers have praised the Co-op deal for providing their stores with a strong fresh offer, but have also raised concerns about how this will be affected post-2026.

“We are very anxious as there are just 18 months left and we are not being kept in the loop,” said one Costcutter retailer. “Apparently Co-op is very keen about an extension and there is a lot of bargaining in the background going on.”

Bestway and Sainsbury’s declined to comment on the outcome of the meetings, but the news suggests the supermarket could be open to re-entering the wholesale sector, which it left in 2021.

Sainsbury’s wholesale exit impacted a number of retailers it was supplying, including SimplyFresh, EG Group, WH Smith and Dobbies garden centres.

SimplyFresh, which consists of 90-plus stores, continues to be supplied by Costcutter, which owns a 20% share of the business.