Costcutter had been supplied by P&H since 2014

A day after Palmer & Harvey collapsed into administration; Costcutter has announced that it had already signed an agreement with the Co-op to supply its stores from Spring 2018.

In light of the troubles at P&H, which as of today will no longer be making deliveries, the Co-op also confirmed it was looking at ways it can support Costcutter’s independent retailers in the short-term. The Grocer understands that other wholesalers including Booker and Bestway will be looking to supply Costcutter retailers and other former P&H customers in the short term.

“With P&H no longer able to supply our stores, we have activated our contingency plans that will see our retailers supported by the Co-op and other suppliers in the run up to our deal with the Co-op,” said Costcutter CEO Darcy Willson-Rymer.

The deal, which is set to commence around the same time that the Co-op hopes to complete its £137m takeover of buying group Nisa, will see Co-op become the exclusive wholesale supplier to CSG which operates the 2,200 Costcutter, Mace, Simply Fresh, Supershop and Kwiksave convenience stores.

The deal will also provide the opportunity for Costcutter’s independent retailers to become Co-op franchisees.

Co-op Food chief executive Jo Whitfield said: “We are operating in a dynamic market environment and this deal, coming shortly after our Nisa announcement, shows how we are positively responding to the changes occurring within the sector.

“Our food business is going from strength to strength in what is clearly a challenging retail market. We recently reported our 14th consecutive quarter of like-for-like sales growth and this agreement will further strengthen our ability to offer customers great products at great prices.

“Whilst our deal with Costcutter will start formally in Spring 2018 we are looking at practical ways we can support independent retailers during this busy trading period, in light of the news concerning P&H. It is essential that we maintain a strong independent retail sector and the Co-op is committed to playing its part, along with others in the industry, in ensuring this occurs.”