Costcutter retailers have been promised a formal announcement on the future of the group, relating to “exciting opportunities on the table”.

In a letter to retailers, Sir Michael Bibby, managing director of parent company Bibby Line Group, suggested that collaboration was on the cards.

“I believe we are making real progress on a number of fronts which will allow you to unlock significant growth for your business…” he wrote.

“The good news is that the market is moving quickly. There are exciting opportunities on the table right now which mean that Darcy [Willson-Rymer, Costcutter CEO] and I hope and expect to be able to make a formal announcement soon. Due to confidentiality agreements we are unable to give a running commentary on progress until any changes are confirmed.”

He said any collaboration that Costcutter enters into must resolve supply chain issues; continue to build volume through great prices and promotions; and strengthen the own brand offering.

The proposed Tesco-Booker merger had taken the entire market by surprise and had prompted discussions across the sector “that would not have seemed imaginable just one year ago,” Sir Michael wrote. “Bibby Line Group and Costcutter Supermarkets Group have been working together to ensure we are at the forefront of these conversations, exploring all options available.”