Costcutter is placing a greater focus on the forecourt sector as the symbol group wholesaler seeks to reassure members amid the ongoing negotiations over its future distribution arrangements.
In the wake of chairman Colin Graves departure last month, Costcutter chief executive Nick Ivel said an announcement on Costcutter’s supply chain post 2014 – when its existing contract with Nisa Today’s expires – was about eight weeks away.
“We have narrowed it down to three options and hope to announce something in eight weeks,” said Ivel. “That will give our members what they want, which is better prices, better promotions and a service equal to – if not better than – what they have now. It could possibly be a very different arrangement; it’s taking a long time but we’ve got to get it right. Our overall message is we are changing, there’s a lot happening and with Bibby behind us we’ve got a lot of financial clout to grow.”
Costcutter is also poised to open stores on more forecourts. “One area we are highlighting is the forecourt sector and we are talking to a few people so watch this space for Costcutter fascias joining more forecourts,” said Ivel.
Costcutter currently supplies 234 Murco-branded forecourts as part of its 15-year partnership with the oil company, and that venture now contributes £90m turnover a year for the wholesaler.
“This year started well for Costcutter and was helped a lot by the extension of the Murco contract until the end of December this year,” said Ivel. “Murco is still up for sale but we are speaking with them weekly and sometimes daily and are hoping it will stay as it is because it’s a good contract that works well.”
Ivel added that since Bibby’s acquisition of Costcutter at the end of last year, the group has made a “huge amount of investment” in its IT structure, and is making further investment in marketing, including category management software to help range management and boost retailers’ sales, along with digital media screens to display promotions outside stores.
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