Bibby Line Group has completed its 100% purchase of Costcutter, and stated it will be a spring-board for consolidation in the neighbourhood retailing sector.
The shipping, logistics and financial services group acquired 51% of Costcutter in 2007 as the first phase of an investment in the convenience retailing industry. It completed the purchase of the remaining 49% last week (November 14).
Costcutter founder Colin Graves remains as chairman of the symbol group, with Nick Ivel also staying on as chief executive. A new division, Bibby Retail Services, has been set up with Graves as chief executive, where his main role will be to “identify opportunities to grow its convenience retail business and realise potential value within this sector”, according to an official statement.
Speaking on the day that the acquisition was completed Sir Michael Bibby, managing director of the Bibby Line Group, said: “Convenience retail has shown itself to be recession-proof, but there is a major opportunity to consolidate the industry that still suffers from duplicated distribution costs and diluted buying power. There is a massive opportunity to work with other players in the industry to deliver growth in the future.”
Graves maintained that he would remain in close contact with Costcutter retailers, as well as exploring suitable acquisition targets. He said: “A lot of operators have reached peak levels, and this could be an opportune time to expand.”
Ivel added: “Consolidation in the industry will happen, and this will put us in the driving seat. We want to be the catalyst to make things happen.”
One of the first decisions the new group will have to make will be regarding the supply contract for Costcutter retailers. The current deal with Nisa expires in June 2014, and a new proposal is the subject of ongoing negotiation.