Shoppers are heading back to local stores as they realise that they are competitive on price, Costcutter managing director Nick Ivel has told Convenience Store, revealing that the group's sales figures for the financial year 2009/2010 were above £600m for the first time in its history.

"Recession may have forced people to shop locally, but they have been surprised at what our stores can offer," he said. "At Christmas, we matched Tesco on beer and were cheaper on vodka, and it's encouraged shoppers to look again at what their local store can offer.

"The result is a higher basket spend, and in some cases stores have had to introduce trolleys."

The year's 8% sales uplift was above expectations, but Ivel warned of a harder year to come. "The first year out of recession can be difficult as businesses may have underspent in tough times, and the challenge is to know when and how to invest in growing your business."

The group's membership grew by 60 to 1,560 over the period, with some smaller stores leaving and being replaced by higher quality businesses, Ivel added.

Plans for the summer include the return of TV advertising featuring Darren Gough.