Two major convenience store players - Spar and The Co-operative Group - have joined forces in an own-label buying alliance, in a bid to make them more competitive with the grocery multiples.
The two groups will be pooling volumes across key product categories including: tissues and toilet rolls; cooking oils; sauces and pickles; fruit juice; carbonates; and frozen food.
The alliance will be managed by the Co-operative Retail Trading Group (CTRG), which currently handles more than £5bn-worth of food sales.
Spar managing director, Jerry Marwood, said the deal would mean both parties could compete more effectively in an increasingly competitive market, which is dominated by the four major multiples. Describing the joint venture as a ’bold and positive move’, he said: "It will give both parties greater scale and greater leverage with suppliers and improved service levels. It also gives us access to improved product specification and other products where Spar volume alone is not considered viable for suppliers. We see this as a route to improving our product proposition while retaining the specific differences between our stores and those of the Co-op."
Marwood said the Spar brand would remain a key element of the symbol group’s overall offer.
Both Spar and the Co-op were keen to stress that the buying deal was not the start of a merger. Guy McCracken, chief executive, food retail for the Co-op Group, said there would still be "healthy but friendly competition" between the two groups.