Palmer and Harvey (P&H) has announced it will be moving away from direct management of symbol group convenience retailing with the 800 Mace, Your Store and Supershop stores joining the 1,600 Costcutter and Kwiksave stores in the Costcutter Supermarket Group on April 7.

At the same time, P&H and Costcutter have announced the formation of a new joint venture buying company, The Buyco, with £5bn-worth of spending power.

In addition, Costcutter has signed a new eight-year wholesale distribution contract with P&H, which will take effect in July 2014, when its current distribution deal with Nisa ends.

Darcy Willson-Rymer, chief executive officer of Costcutter Supermarkets Group, said: "Through the creation of The Buyco with P&H, we will have unrivalled purchasing power within the UK convenience sector meaning that we can ensure the best prices, promotions and range for our members.

"Combine this with the industry-leading distribution capabilities of P&H, and Costcutter Supermarkets Group will be offering the best possible service to our members.

"This will now also include the 800 independent Mace, Supershop and Your Store retailers who I am delighted to welcome to Costcutter Supermarkets Group."

Costcutter Supermarkets Group also announced the introduction of a new, bespoke range, negotiated on its behalf by The Buyco. This will include an extensive chilled and fresh proposition, and a new three-tier own label range which Costcutter Supermarkets Group is developing.

Martyn Ward, chief executive officer of The Buyco and managing director, commercial and sales at P&H, said: "The Buyco’s sole reason for being is to create value through volume. We will be working closely with suppliers, both those already working with P&H and new suppliers that we will be bringing on board to meet the needs of Costcutter Supermarkets Group members and all of P&H’s existing independent retailers, to ensure we are providing not simply the largest range but the highest value range possible."