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York supermarket group takes on 800 new stores in joint venture
COSTCUTTER has taken over 800 convenience stores from independent retailer Palmer & Harvey in a new joint venture with the business.
The new venture, 50 per cent owned by both companies and called The Buyco, will have a combined buying power of £5 billion, providing Costcutter Supermarkets Group with access to the largest volume buying power in the sector for its existing 1,600 plus Costcutter and kwiksave franchise stores and P&H’s existing independent retail customer base.
From April 7, P&H's Mace, Supershop and Your Store brands, operations and 800 stores will join the Costcutter Supermarket Group family of brands, as P&H moves away from direct management of symbol group convenience retailing to focus on its wholesale distribution strengths.
Costcutter, based in Dunnington, York, has signed a new eight year wholesale distribution contract with P&H and will introduce a new range of chilled and fresh foods, and a new three tier own label range, negotiated on its behalf by The Buyco. Costcutter is also developing a regional range offering based on feedback from its member retailers.
Darcy Willson-Rymer, chief executive of Costcutter Supermarkets Group, said: “We have been single-mindedly focussed on creating maximum value for our members and it became wholly apparent that without access to the proportionate benefits of our own buying power this could not happen.
"Through the creation of The Buyco with Palmer & Harvey, we will have unrivalled purchasing power within the UK convenience sector meaning that we can ensure the best prices, promotions and range for our members."
Chris Etherington, chief executive of P&H, said: “The core of our business has always been world class ‘last mile’ delivery to retail stores in every postcode, every day.
"By divesting our retail operation to Costcutter Supermarkets Group, we can now focus all our energies on extending the delivery benefits already enjoyed by our Mace, Supershop and Your Store retailers to the wider Costcutter Supermarkets Group.
"This will mean the retailers have greater control and massively increased business efficiency which will ultimately lead to savings for independent retailer," he said.