Wholesaler Bestway is in advanced talks with Costcutter over a supply deal as the symbol group looks to sever ties with current wholesaler Palmer & Harvey (P&H), a top industry source has told RN.

The wholesaler is one of several rumoured to be in talks with Costcutter, however Bestway is believed to be the frontrunner. 

Bestway would not confirm the speculation, but a spokesman said: “We are always in talks with companies that we think we can help and this covers a variety of businesses.”

Meanwhile a spokeswoman for Costcutter said: “When we wrote to our retailers in late August to update them on discussions we are having in the market, we fully expected this to fuel rumour and speculation. However, while we continue to explore all possible opportunities, we will not be making any response.”

The speculation comes as the Bibby Line Group, the mini-conglomerate that includes the Costcutter chain, announced its first loss in 30 years.

Owner Sir Michael Bibby, who heads up the family-run business, described 2016 as “one of the most challenging years in recent memory”, and cited Brexit as one of the reasons profits had plummeted from pre-tax profits of £30m to a loss of £66m. 

Retailer Mike Nicholls, who owns Costcutter and Mace stores in Yorkshire said: “There are a lot of rumours going around, we are hoping for an announcement soon. Last week availability got so bad I ended up using Booker.”

Another Costcutter retailer, who did not want to be named, told RN: “This has been the worst three years of my life. Costcutter has been really supportive as a symbol group, I can’t fault them in any other way, but supply issues have been a nightmare.”