Costcutter discovers that a listening ear reaps rewards

The York-based retailer, founded 25 years ago, said sales at its 1,550 stores rose four per cent for the 12 months to April.

Nick Ivel, managing director, said a series of innovations had helped Costcutter to grow despite Britain’s sluggish economic recovery.

“The last year has seen lots of changes and increased competition in our industry. At Costcutter, we’ve focused our attention on listening to our retailers and adjusting our package to reflect their changing needs.

“We’ve undertaken a massive programme of retailer feedback, using research specialists Harris International to carry out independent telephone interviews with more than a third of our membership, plus 500 non-members, as well as the introduction of our marketing forum and national retailer forums to give retailers a voice on key aspects of our offering.”

The firm, which operates a franchise operation, has had to contend with the move of several major multiples into the convenience store sector.

Tesco and Sainsbury’s have opened new branches in city centres and Morrisons plans to open three in Yorkshire and the North West this year.

Costcutter has also doubled its television exposure and made its consumer loyalty scheme free to retailers using its electronic point of sale system.

It is also trialling a Costcutter diploma in convenience retailing, taking in the management of retail operations, finance, managing people and business development, which will be available later this year, and has introduced a ‘Proud to be Local’ strapline.

Mr Ivel said: “Costcutter’s robust performance at the top end of the industry average and continued growth over the last 25 years, demonstrates just one of the many benefits to independent retailers joining our group.

“These results represent great news for the group, but even better is the success for independent retailers who are continually threatened by the impact of the multiple supermarket groups.”

This year will be vital for Costcutter and it has begun adding more retailers as well as carrying out an internal shake-up, Mr Ivel added.

Colin Graves bought the Costcutter name and set up a rival to Spar in 1986. He was 37 and had spent 17 years with the supermarket chain.

Mr Graves, now executive chairman, has previously ruled out a third attempt to merge with Britain’s biggest buying group for independent retailers Nisa-Today’s after it rejected a £51m takeover approach from Bibby Line Group, which owns a majority stake in Costcutter, in August 2009.

The two firms previously held fruitless merger talks five years ago.

Mr Graves is also the chairman of Yorkshire County Cricket Club having taken over after the departure of chief executive Stewart Regan last year.