Costcutter operations will become part of Bestway’s retail arm

Bestway Wholesale has snapped up symbol operator Costcutter Supermarkets Group for an undisclosed fee from Bibby Line Group.

The deal, set to be concluded in the first quarter of 2021 subject to approval from the Financial Conduct Authority, will take the wholesaler’s turnover to almost £3bn.

Bestway will then operate a symbol, franchise and company store estate of more than 3,795 UK stores.

The Costcutter operations will become part of Bestway’s retail arm. This will involve the integration of around 1,500 stores branded Costcutter, Mace, Supershop, Kwiksave and Simply Fresh, along with 20 Costcutter and four Co-op franchises.

Around 500 Costcutter staff will join Bestway, however CEO Darcy Willson-Rymer is leaving the business and is set to take up a new role as CEO of Card Factory.

Bestway said the deal for Costcutter comes on the back of improved financial performance at the symbol group over the past two years. Costcutter sales for the 12 months to December 2019 were up 10% to £426m. It added sales and profitability had continued to improve in 2020, during the coronavirus crisis.

“Costcutter is a great brand with a long heritage and a history of success alongside industry-leading and loyal retailers, with some of the best in-store execution in the business,” said Bestway Wholesale MD Dawood Pervez.

“As part of Bestway Wholesale, the team at Costcutter will be able to build upon the amazing results they have been achieving in partnership with their retailers, helping them to innovate and adapt to an ever-changing market in order to grow their businesses and sales.”

Costcutter is currently supplied by Co-op via its Nisa supply chain, with retailers able to offer a 2,000-strong Co-op own-label range.

Bestway said the current Co-op deal was not affected by the acquisition and Nisa would continue to supply Costcutter stores.

“This means Costcutter retailers will continue to benefit from access to the same range they have today, including a fresh offer that is right for today’s convenience shopper, as well as the Co-op’s own-brand range,” added Pervez.

Costcutter and Bestway will hold a series of virtual roadshows in January to discuss the deal with retailers.

Pervez continued: “The acquisition of Costcutter by Bestway Wholesale enables us to further build on our solid foundations in independent retail, allowing us to expand on our already established, and highly respected, fascias, brands and national network of stores.

“Clearly, there will be benefits of scale and investment in joining forces for our retailers, shoppers and suppliers.

“Independent retailers are vital hubs within their local communities that have become increasingly valued and appreciated by consumers – and government – for their services during the Covid-19 pandemic. We will continue to support and champion this sector and will be investing for its future alongside range, service excellence and technology. Our message to all our retailers is that ‘together we are stronger’ at a time of economic uncertainty, both with Covid-19 and Brexit ahead.”

Willson-Rymer said: “Joining the Bestway family could not have come at a better time for our retailers. Joining a business of Bestway Wholesale’s size, scale and expertise will unlock new opportunities to help CSG’s independent retailers thrive. This is a cause I know Bestway is absolutely committed to.

“Right now, that means three things: helping our retailers navigate the challenges of the Covid pandemic; continuing to invest in the BDM support our retailers receive and the retailer sales growth we are able to deliver through Shopper First; and introducing new and innovative ways to engage shoppers and deliver the very best retail offer available.

“While I will not be part of Costcutter’s journey moving forward, it is exciting to see the fresh opportunities this acquisition will bring.”

John Cresswell, CEO of Bibby Line Group, said: “Over the past two years, CSG has transformed itself into a profitable and much stronger business, and I’d like to thank the team for their unstinting commitment and passion for helping independent retailers thrive.

“We hope CSG will continue to prosper and grow as it becomes part of a larger business with deep retail expertise. This is also positive news for Bibby Line Group, completing the planned strategic realignment of our portfolio, further strengthening our Group balance sheet for future investment.”