Co-op strengthens hand after collapse of P&H

Convenience store chain Costcutter has struck a wholesale supply deal with the Co-operative Group as it moves to fill the hole left by the collapse of distributor Palmer & Harvey (P&H).

The group, which owns Mace, Simply Fresh, Kwiksave and Supershop, said the Co-op would start supplying its 2,200-strong store network from the spring of next year.

The move will also see the Co-op offer immediate support to Costcutter, while handing its chain of stores the chance to become Co-op franchises.

It comes after P&H, one of the UK’S biggest private firms, crashed into administration on Tuesday, sparking 2,500 job losses and putting a further 900 at risk.

Among those lost immediately were more than 150 at the group’s most northerly depot at Dunfermline, where just 31 staff have been retained meantime.

Costcutter chief executive Darcy Willson-rymer said: “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.”

The deal hands further strength to the Co-op, which is pushing through the takeover of rival grocery group Nisa in a £137.5 million deal.

The Co-op plans to acquire 100% of the convenience store operator, which has around 1,200 shopkeeper members running more than 3,200 stores, assuming the deal is cleared by UK authorities.

Co-op Food chief executive Jo Whitfield said: “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.”

Co-op Food CEO Jo Whitfield.