Bestway buys Costcutter group serving 1,500 stores

Bestway said the acquisition, which will complete on approval from the Financial Conduct Authority, follows the improvement in CSG’s financial performance over the last two years.

During the 12 months to 31 December 2019, CSG’s sales rose by 10% to £426m, it said, with sales and profitability continuing to rise throughout 2020 as consumers increasingly shopped locally as a result of the Covid-19 pandemic.

The acquisition takes Bestway Wholesale’s annual turnover to almost £3bn, alongside a symbol, franchise and company-owned store retail estate of more than 3,795 stores in the UK, including 2,682 fascia and 195 company-owned.

Under the terms of the acquisition, CSG and its brands will become part of Bestway Wholesale’s retail division and continue to operate as normal.

Approximately 1,500 stores branded under Costcutter, Mace, Supershop, Kwiksave and Simply Fresh, along with 20 Costcutter and four Co-op franchises, will join Bestway Wholesale’s retail estate, which already includes Bargain Booze, Best-one, Wine Rack, Select Convenience and Central Convenience.

Dawood Pervez, managing director of Bestway Wholesale, said: “Costcutter is a great brand with a long heritage and a history of success alongside industry-leading and loyal retailers, with some of the best in-store execution in the business.

“As part of Bestway Wholesale, the team at Costcutter will be able to build upon the amazing results they have been achieving in partnership with their retailers, helping them to innovate and adapt to an ever-changing market in order to grow their businesses and sales.

“We are keen to reassure CSG’s retailers that it is ‘business as usual’ and they will see no change in how they currently work with CSG.  The existing CSG supply contract with Co-op/Nisa is not affected by the acquisition and Nisa will continue to supply CSG stores.

“The 2,000 Co-op SKU range has proven to be an important driver of footfall and sales, as well as providing CSG retailers with an exceptional range of fresh produce.

“This means Costcutter retailers will continue to benefit from access to the same range they have today, including a fresh offer that is right for today’s convenience shopper, as well as the Co-op’s own-brand range.

Darcy Willson-Rymer, CSG’s chief executive of nine years, will be leaving the business following completion of the acquisition.

He said: “Joining the Bestway family could not have come at a better time for our retailers. Joining a business of Bestway Wholesale’s size, scale, and expertise will unlock new opportunities to help CSG’s independent retailers thrive.”

John Cresswell, chief executive of Bibby Line Group, said: “Over the last two years, CSG has transformed itself into a profitable and much stronger business.

“We hope CSG will continue to prosper and grow as it becomes part of a larger business with deep retail expertise.”

Bibby Line recently sold off its logistics operation, Bibby Distribution, to Menzies.

The company took control of Costcutter in 2011, with founder Colin Graves departing the following year.

Costcutter is understood to have rejected a £15m takeover deal from the Co-op in 2018.