Costcutter Supermarkets Group is introducing a range of measures it claims are designed to improve its delivery on-time service for all retailers, support key growth categories, and reduce the group’s overall carbon footprint.
To improve delivery times and maximise the efficiency of existing deliveries, the convenience symbol group is increasing the minimum order quantity for ambient products from 80 cases per order to 120 cases per order. It is also introducing a £55 (+VAT) charge for any retailer that does not use their delivery slot.
Mike Hollis, Retailer Director at Costcutter, said: “We are constantly looking for ways to improve the delivery service our retailers receive. Retailer feedback has been consistent about the need to improve the accuracy and consistency of Delivery On-Time windows. Having worked on the right solution for some time, we consulted retailers during our January 2020 Retailer Roadshows, where the principles of a solution were discussed and received enthusiastic support.
“By both charging retailers who do not use their delivery slots and maximising the efficiency of existing deliveries by increasing the ambient MOQ, we will be able to settle down into a regular delivery pattern which in time will provide our supply partner with a greater opportunity of operating to their delivery time windows.”
The group stressed that the vast majority of its 1,550 retailers are already maximising both their orders and delivery slots, and the changes will improve the consistency of service with no cost impact for the majority of businesses.
Meanwhile, as part of Costcutter’s drive to “support key growth categories”, it will no longer pay any rebate for spirits purchases. However, all spirits purchases will still count towards a retailer’s average weekly spend calculation which helps them towards the maximum rebate of up to 6%. To qualify for their rebates, Costcutter retailers will also need to correctly display key deal ends.
At the same time, to support the growth of fresh foods category, the group is trialling an additional fresh rebate of 1% in Northern Ireland that will be considered for wider national rollout.
Hollis commented: “This small change in our rebates scheme forms part of a wider initiative to focus on growth categories, particularly fresh foods. Removing rebates on spirits is, like tobacco, part of our aim to place less emphasis on declining and low growth categories.
“In addition, when every Costcutter store is displaying the correct deal ends, we will be able to reinforce the Costcutter brand perception of price and value with shoppers. As we enter a recessionary period, ensuring all shoppers receive this same brand experience of price and value will be even more important than before.”
Costcutter also announced that a new £6/week recycling charge is being introduced to support a commitment to reduce its carbon footprint. Retailers will have the choice to opt-out.
“We know that the vast majority of our retailers share our ambition of reducing the carbon footprint of all our businesses,” said Hollis.
“So that we can provide the best possible recycling service, we need to introduce this small levy which is a common charge across the Symbol sector. By allowing retailers to opt out, we are ensuring that this is a competitively priced service.”
The changes come into effect from 20 July onwards with the exception of the rebates changes which come into effect from 3 August.
NAM Implications:
- Key will be retailer behaviour pending acceptance of the new rules.
- Watch this space…
