Retailers previously supplied by Palmer & Harvey (P&H) are making new supply arrangements in the wake of the collapse into administration of the wholesaler, as Costcutter Supermarkets Group (CSG) finalises its contingency plans ahead of the formal commencement of the Co-operative Group supply deal.
P&H’s collapse into administration on Tuesday was followed by confirmation on Wednesday that the Co-op would become the exclusive wholesale supplier to CSG in Spring next year.
Costcutter said CSG stores would be supplied by the Co-op “and other suppliers” in the interim period, but yesterday afternoon conceded it was still finalising those arrangements.
Nimal Navaratnarajah, who owns five Costcutter stores in the South West, signed a secondary supply deal with Bestway three weeks ago in anticipation of the collapse of P&H.
“I had a feeling it was going to cause me a few problems. I’m glad I did it because no-one at Costcutter has been in touch yet about supplying us – I’m surprised and really annoyed. I would be in a really bad situation right now without Bestway.”
Nimal is receiving two deliveries from Bestway per week at his smaller stores and six a week at his larger ones. “We’ve promised them at least £20,000 spend per week,” he told C-Store.
However, when the supply deal with the Co-op commences in the Spring, Nimal is hoping to enter a Co-op franchise agreement. “If I have the Co-op signage it will give me much more credibility to compete with other symbol groups.”
Chaz Chahal, who owns Simply Fresh and Costcutter stores in Worcestershire, said: “Instead of wasting time waiting for HQ to tell us things yesterday I decided to put my own plans in place. I spent hours breaking down the categories and putting new plans in place for individual ones. We are fortunate to have a van and lots of cash and carries in the area so getting hold of branded stock hasn’t been too much of a problem.
“I’m also very lucky to have good retailer friends within the industry who have been able to help me out by making orders on my behalf. It’s at times like this that all the industry networking events that we go to throughout the year really prove their worth!”
One Costcutter retailer told C-Store: “We just don’t have the resources to send people out to cash and carries to pick up stock and then pay for it cash in hand.
“It’s been really hard to find stock and the communication from Costcutter has been really bad. Apart from a text to say P&H had gone into administration and another telling us we can order milk and bread, we have heard nothing about any contingency plans going forward.
“I’ve heard from retailers and another source that a contingency plan won’t be in place for another four weeks. That would be crippling for retailers and may bring down a lot of businesses.”
A CSG spokesperson said: “At this time our priority is providing immediate support for our retailers this week and then putting in place interim supply measures.
“For supply over the next few days we are finalising our contingency arrangements with temporary wholesale and cash & carry accounts being opened for all our retailers. These contingency arrangements are with a variety of wholesale and cash & carry suppliers. We have already increased capacity with our existing bread and milk suppliers who already supply direct to our stores.
“For the interim supply for our stores we will be adding additional contingency supply arrangements that will be introduced through next week and beyond. The aim is to provide a delivered wholesale service wherever possible.”
Dean Holborn, who owns two Holborn’s stores in Surrey, cannot rely on a contingency plan as an unaffiliated retailer. He was in the cash and carry when C-Store contacted him. “I hadn’t had any notification from P&H but I saw the news coverage so I knew I had to make a contingency plan,” he said.
“I think the ramifications for this are enormous. It’s hard work for us retailers to go to the cash and carry and try to find where everything is, but also a lot of suppliers will have lost a lot of money and I don’t see how the system will cope with everyone looking for a new source of supply.
“It takes time to set people up with credit accounts and so on so it will mean paying cash on delivery for a while. And its not just P&H either, it’s all the third party suppliers that we dealt with via them as well.”
The Today’s Group said it was working in collaboration with key suppliers to ensure an increase stock holdings and key pricing on critical items “in order for independent businesses to be confident in making their local Today’s Group member wholesalers first choice to support this change”.
Booker is encouraging retailers to contact their local Booker cash and carries. “Following the administration of P&H, Booker is working with suppliers to minimise disruption in the supply chain. We are proud to serve thousands of brilliant, independent retailers and we are here to help any new customers.
“Booker understands that there may well be many P&H customers in urgent need of immediate support to purchase goods for their business. We have over 200 cash & carrys nationwide and would like to let any affected retailers know that we are here to help and we are easy to do business with.”