Co-op to Costcutter’s rescue after P&H collapse

Co-op will supply food and cigarettes to Costcutter’s stores after its former wholesaler Palmer & Harvey collapsed into administration on Tuesday night, casting a shadow over the grocery sector in the run-up to Christmas.

The exclusive deal led by Co-op’s Jo Whitfield, which covers 2200 Costcutter, Mace, Simply Fresh, Supershop and kwik save shops, kicks off in spring.

“With P&H no longer able to supply our stores, we have activated our contingency plans that will see our retailers supported by the Co-op and other suppliers in the run up to our deal with the Co-op,” said Darcy Willson-Rymer, the chief executive of Costcutter.

Booker is believed to be in the running to bridge that gap. The move comes after takeover talks between P&H, which delivers thousands of products to 90,000 shops throughout the country, and private equity firm Carlyle fell through. The business has been struggling with debt and money owed to key suppliers.

Around 2500 people were made redundant yesterday, according to administrator PwC, including 237 at P&H’s distribution centre in Hemel Hempstead, just outside London. A further 900 jobs are still at risk of redundancy.