Costcutter is “ahead of where it wanted to be” by this stage and right on course for the full transition of the business to a new buy and supply arrangement next summer, according to chief executive Darcy Willson-Rymer.
Speaking at Costcutter’s Expo in Manchester, Willson-Rymer, who has been in the role for a year, admitted that the delay while waiting for OFT clearance of the new supply deal with P&H put them behind schedule in some areas, but they have already made better-than-expected progress in others.
He said: “In my first few months I met 250 retailers and it’s clear what they want: price, range, promotions, and service, so we need to get these right. We’ve done all the range work, and we’ve had a successful trial with P&H delivering to our 27 company-owned Ebor stores, so we have been able to learn and refine that process ready for the migration of member stores.”
Sales at the Ebor stores are up by 7% since June, he revealed, and P&H will start delivering to seven independently-owned Costcutter stores next month as the next stage of the transition. The contract with Nisa expires on July 1, 2014.
A new product range of around 10,000 lines has been identified, with P&H listing around 2,500 additional skus in order to meet Costcutter’s requirements. Central to the new portfolio is a three-tiered own-brand range named Independent and the first 300 lines, primarily in dairy, soft drinks and basic grocery, will be available before Christmas to retailers already supplied by P&H.
Willson-Rymer also maintained that retailers would benefit in other areas too, through upgraded and flexible IT systems, and a new category management programme that will be able to produce store-specific planograms.
In the long-term, Willson-Rymer set a target of 6,000 stores for the combined family of Costcutter, Kwiksave and Mace brands.
“We need to grow the business and ensure that our members can compete in the market, but it is our absolute belief that convenience retailing needs to be dominated by independent retailers,” he added.
The Costcutter plan
- New product range of 10,000 skus
- Three-tier Independent own-label range comprising core, Trader (value) and Specialist (premium)
- Flexible deliveries through P&H’s network of 12 depots
- Technology-assisted category management
- Focus on chilled, top-up and alcohol
- New Activ epos system launched in January 2014
- Further development of member services
- Growing the group to 6,000 stores