Costcutter to announce new supply contract

Costcutter are expected to announce their new supply contract in the next few days. The retailer is thought to be ironing out the details of its ‘buy and supply’ partnership with The Co-op Group.

The deal comes as Co-op’s long-awaited merger with Nisa was announced earlier this week. These discussions led to a delay on the Costcutter bid, with Co-op taking pains to ensure their merger contract did not influence proceedings.

One source said: “People need to wait for the vote on the co-op takeover of Nisa. It makes sense not to mention it until then, as it could’ve influenced Nisa member’s decision. But rumours of a merger are completely wide of the mark.

The Tesco-Booker merger has made 2017 a protracted chess game for the retail industry, and as that bid reaches its endgame, Co-op’s succession of alliances indicate a growing need to defend against the possibility of a big four monopoly. However Co-op were eager to stress their deal with Costcutter is not another takeover bid.

“It is unlikely to be a takeover like Co-op and Nisa. It will most likely be a deal for Co-op to supply Costcutter, with Nisa expected to supply the wheels (distribution)”, a source said.

Costcutter had previously alluded to a potential supplier deal in August.

A statement issued by the retailer said: “When we wrote to our retailers in late August to update them on discussions we are having in the market, we fully expected this to fuel rumour and speculation.

“However, while we continue to explore all possible opportunities, we will not be making any response until we are ready to make an announcement to our retailers”