Leading independent forecourt operator Motor Fuel Group has agreed a new deal with Booker, which will see the supply of 300 stores transfer to the wholesaler from Costcutter as of 1 July.
The forecourt business currently has 374 stores and Costcutter will continue to supply the remaining 74. As of July, MFG will start rebranding the 300 stores, which are moving to Booker as either Budgens or Londis. Booker completed the £40m takeover of the Budgens and Londis operations from Musgrave last September.
MFG ran a series of forecourt trials last year with suppliers including Booker and Costcutter, as well as developing a franchise model with Morrisons. MFG chief operating officer Jeremy Clarke said the latest deal did not affect its agreement with the big four supermarket.
“After many months of trials and negotiations, we are delighted to be now working with the team at Booker. We believe that they can help us to develop our rapidly growing business model and also provide a rewarding offering for our contract managers and customers,” explained Clarke.
“Costcutter will continue to be an important supplier to our business as we diversify our brands to meet customer expectations and I would like to take this opportunity to thank them for their support in helping us build and develop our existing forecourt shop offer over the last four years.”
Booker Group managing director - retail Steve Fox added: “It is a privilege to serve the Motor Fuel Group. This new agreement is a fantastic opportunity for Booker Retail Partners to work in partnership with MFG and their contract managers to help grow and develop their business. We are delighted that the stores are joining Londis and Budgens brands and I am looking forward to serving them from July.”
The Grocer understands that Costcutter had been negotiating with MFG with a view to continuing to supply its entire estate, but the two parties were unable to reach agreement on the right commercial terms.
“We are disappointed that Motor Fuel Group is reducing the number of stores they have with us. However, we are pleased that we will maintain our long-standing relationship with them through the remaining stores that we will continue to service,” said Costcutter retail director Dan Quest.
“We do not believe the lost volume will impact us or our retailers as the majority of the MFG volume is from tobacco where margins are small. As such, our actual revenue exposure is relatively low. Our strong recruitment programme means that we will be able to more than replace the lost volume and we do not expect any impact on our buying power because of the combined purchasing strength we have through the Buyco.”
He added that during the trial last year, Costcutter achieved impressive sales uplifts across the three sites it supplied through the introduction of a much wider offering of fresh, locally sourced foods and food to go.
“We are now in the process of formalising a new forecourt format developed from the output of that trial, which we look forward to showcasing to our other 400-plus forecourt retailers.”