Costcutter and P&H announce closure of The BuyCo

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Costcutter and Palmer and Harvey’s joint negotiation company The BuyCo is to shut, the companies have announced.

Established in 2013, the BuyCo was designed to combine the volumes and align the terms of Palmer & Harvey (P&H) and Costcutter after the latter split from Nisa. However, no other large groups joined the organisation, and feedback from suppliers both directly and via the industry-recognised Advantage survey was that the presence of the BuyCo made the execution of plans in the sector too complicated.

The BuyCo’s negotiating responsibilities will continue within both P&H and Costcutter on an in-house basis, with P&H planning to restructure its category team following a period of consultation. Both organisations were keen to stress that price negotiations will still be based on the combined buying power from all of P&H’s customers and partners and the terms that retailers benefit from will remain unaffected by the closure of the BuyCo.The decision does not affect Costcutter’s supply agreement with P&H either.

P&H managing director Martyn Ward told C-Store: “The marketplace is ever-changing and suppliers want us to be easier to do business with, and more approachable. BuyCo was an entry point for net terms, but for specific implementation suppliers have to speak to Costcutter and P&H as well and, while we wanted these conversations to run in parallel, we often ran out of time.

“Closing the BuyCo is a supplier-facing efficiency to make things simpler and easier, and we will get better engagement as a result. But it has absolutely delivered what we expected in terms of harmonisation of terms and stronger promotions, and we now have a structure of range, price and promotions that wasn’t there before.”

Costcutter Supermarkets Group chief executive Darcy Willson-Rymer added: “The case for consolidation in the marketplace is as true today as it was four years ago but, given all that has happened, consolidation is not happening at the buying level so the BuyCo is not the vehicle that it could have been.

“But the point about ‘value for volume’ has been established and we can continue to achieve this. We have also built up considerable expertise in negotiating special offers in the last four years, which we were never able to do before with Nisa.”

Readers' comments (8)

  • Its the buying teams at P&H branches who were made redundant that i feel sorry for.The Buyco never worked for Independent Retailers, nor was it meant to.It was all about CSG.Dual pricing however will no doubt continue.P&H pricing especially on tobacco and soft drinks off promo will always be cheaper than what CSG charge their retailers.

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  • THEY RUINED ALOT OF COSTCUTTERS WITH THEIR ARRAGANCE AND BULL. NEVER TRUSTING THIS GROUP EVER AGAIN.

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  • A partnership made in hell...each blaming each other.
    No surprise here. Both parties dont understand independents at all.

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  • A great shame for both parties A Singh because from what I understand both companies were once excellent with independent retailers.

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  • To A Singh, P&H independent sales used to account for around 40%of the business.Now it is less than 4%.The CSG distribution deal has been a disaster for a lot of reasons not least the poor relationships the CSG field team have wth their retailers regarding loyalty buying.Far too many of them are pennywise , pound foolish ,cash and carry numptys.The sooner Bibby buys NISA as is rumoured the better for all concerned.

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  • RETAILER whilst a Bibby/Nisa deal would benefit the rettailers it's getting on for a decade since that was first mooted and a separate ongoing rumour is Bestway and Nisa. Whichever occurs the sector does need consolidation and more disciplined buying from retailers to take on the modern market.

    Regarding cash & carry buyers correct me if I am wrong but is that not the ideal behind P&H 'Central' fascia as a disciplined franchise away from symbol group territory to bring orders to the wholesaler? If it is and others such as Conviviality are operating on simplants lines it may end up being the future for symbol wholesalers.

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  • Cant see Nisa members agreeing to any takeover by Bibby or Bestway especially as this would undermine the purpose of mutuality, Nisa seem to be doing fine without. Maybe a new supply agreement could be forthcoming

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  • Headed up buying at branch level for over 10 years and was there right through the start up of the Buyco/ Costcutter project. Whatever the structure, name etc etc it will not matter as the same people making poor decisions and arrogantly assuming everyone's wrong except them. Too much spin and not enough listening, Glad Etherington is gone (albeit with millions in his back pocket) as to quite the man himself "....let's not talk of excuses to fail, but reasons to succeed...." never a truer word spoken

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