Costcutter maintains it has put measures in place to help retailers’ short-term cash flow issues by setting up direct accounts with wholesalers, billed through their normal Costcutter account.
A number of Costcutter retailers suffered cash flow difficulties following the P&H collapse, when they needed to restock via cash and carry wholesalers in the same week their regular direct debit for earlier deliveries was due.
One retailer who contacted C-Store at the time said: “It was inevitable that all of this was going to happen, but this close to Christmas it’s made things very difficult for us. It’s really frustrating and annoying because we are still expected to find between £8,000 and £10,000 to pay for old stock.
“We just don’t have the resources to send people out to cash and carries to pick up stock and pay for it in cash.”
However, Costcutter maintains that it has now fixed these concerns by setting up credit facilities on interim accounts with other wholesalers.
Jenny Wilson, customer director at Costcutter Supermarkets Group, said: “We are mindful of the cashflow pressure that some of our retailers may be facing and are working to support any retailer who contacts us with difficulties or concerns.
“All of our retailers now have access to either a direct wholesale delivered service or a cash & carry account that is billed through Costcutter Supermarkets Group, meaning our retailers continue to have access to our standard payment terms.”
For the first time since 2014, Nisa is delivering to “selected” Costcutter stores until the Co-op’s supply deal begins in the spring. Nisa has also agreed a new short-term supply contract with McColl’s Retail Group to cover the McColl’s stores that were previously supplied by P&H – roughly 700 in number. Morrisons will supply McColl’s in a new deal rolling out from January 2018.
Bestway has set up “hundreds” of ex-P&H customers for delivery on a “case by case” basis. Musgrave has begun delivering to Northern Irish stores, while the Co-op is delivering to a few more geographically-isolated stores where alternative sources of supply are difficult to find.
Additional cash & carry solutions are being provided by Dhamecha, Bestway and Musgrave.
Sandeep Bains, of Simply Fresh Faversham, Kent, said: “It’s been a struggle, I’ve got 12 metres of chiller space to fill. I’ve been sourcing from everywhere and anywhere. It’s a massive relief that Nisa have now started delivering.”
Chaz Chahal, who owns Costcutter and Simply Fresh stores in Worcestershire, also welcomed the short-term Nisa contract. “We were managing to keep things running smoothly thanks to alternative supplies through some of my Nisa retailer friends and trips to cash and carries,” he said.
“We are now being supplied by Nisa and I’m happy to say that everything is running really smoothly with deliveries on time and as ordered. We can now get back to the important job of preparing for Christmas.”
Philip Moutray, of Costcutter Moygashel in Northern Ireland, had sourced from a range of wholesalers until Musgrave deliveries began last week. “We were quick to set up a contingency plan when the P&H news came through. There are a number of wholesalers we used who we’d built up a relationship with – it’s the advantage of being independent.”
Musgrave deliveries have been reliable and in full, although he has had to revert to writing orders down. “It’s a big loss of time in the run up to Christmas, but Costcutter is updating the system so we can use the handheld device again. In the longer term I welcome the chance to stock Co-op own brand products as there aren’t many Co-ops around here. I doubt I’ll become a franchisee, though, as Costcutter has been good to us.”