The Co-operative Group will become the exclusive wholesale supplier to Costcutter Supermarkets Group (CSG) from spring 2018, the two groups announced today.

In the meantime, Costcutter, Mace, Simply Fresh, Supershop and Kwiksave convenience stores will be supplied by the Co-op and other suppliers to fill the void left by yesterday’s collapse of Palmer & Harvey, Costcutter ceo Darcy Willson-Rymer said. 

The deal will also provide the opportunity for CSG’s independent retailers to become Co-op franchisees. Costcutter also plans to “scale back and withdraw” the Independent brand, with retailers gaining access to the Co-op own brand. 

“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,” Willson-Rymer said.

Co-op Food chief executive Jo Whitfield said: “We are operating in a dynamic market environment and this deal, coming shortly after our Nisa announcement, shows how we are positively responding to the changes occurring within the sector.     

“Our Food business is going from strength to strength in what is clearly a challenging retail market. We recently reported our 14th consecutive quarter of like-for-like sales growth and this agreement will further strengthen our ability to offer customers great products at great prices.

“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.”