Palmer & Harvey (P&H) and Costcutter Supermarkets Group have announced plans to close The BuyCo, the independent negotiating company set up as a joint venture between both businesses to offer value through volume.
P&H aims to take the function back in-house, with the 30-day consultation period about the future of The BuyCo having started today (5 April). P&H managing director Martyn Ward stressed that the move is not solely focused on making cost savings; instead pointing to the fact that both P&H and Costcutter feel that with the changing nature of today’s market, any further benefits The BuyCo could bring are limited.
The BuyCo, which has been responsible for around £5bn worth of negotiated deals each year, was established in 2013 to offer value through volume, enabling retailers to receive competitive prices and promotions in the market.
Martyn Ward, managing director of Palmer & Harvey, said: “This announcement does not affect our supply agreement with Costcutter, and they will continue to be a valued P&H customer.”
The BuyCo office in Crawley, West Sussex, employs around 35 people. It is not yet known how many jobs would be lost as a result of closure of the business.
The BuyCo’s negotiating responsibilities will continue within both P&H and Costcutter. P&H now plans to restructure its category team. In addition, the P&H category team and Costcutter’s trading team will both continue to work closely with suppliers, in an effort to ensure that their customers and retailers continue to receive industry promotions and offers.
Ward added: “We are on a journey to simplify our business, ensuring that we can continue to deliver the best offer to retailers.”
In other news, P&H has agreed to a new lending deal backed by JTI and Imperial Tobacco, and a three-year supply deal with Tesco.