Motor Fuel Group (MFG) has drastically downsized its four-year partnership with Costcutter, removing around 300 stores from the symbol group.
The forecourt operator announced today that the changes will come into effect on July 1, after which “some 300 of MFG’s 374 station network” will be serviced instead by Booker Retail Partners.
The new contract will see those stations undergo “a major rebranding programme” as Londis and Budgens are introduced into MFG’s network.
Dan Quest, retail director of Costcutter Supermarkets Group, revealed that the reduction in partnered sites came as the result of conflicting terms.
“It is extremely regrettable that we were unable to reach mutually acceptable terms to retain the whole MFG estate,” he said. “We are disappointed that MFG is reducing the number of stores they have with us. However, we are pleased that we will maintain our long-standing relationship with them through the remaining stores that we will continue to service.”
Vitally, he added that Costcutter retailers would remain in a strong position despite the change.
Costcutter’s next move is to showcase a “new forecourt approach”, which was developed during its partnership with MFG, to the more than 400 forecourt retailers it still holds.
“In the trials, we achieved impressive sales uplifts through the introduction of a much wider offering of fresh, locally-sourced foods and food to go,” Quest said, adding that the strategy focuses on increasing retailer profit.
Meanwhile, Jeremy Clarke, chief operating officer of MFG, said that the new partnership came “after many months of trials and negotiations”, but would “provide a rewarding offering for MFG’s contract managers and customers”.
Clarke added that Costcutter will continue to be an important supplier to MFG.
Steve Fox, managing director of the Booker Group’s retail operations, referred to the new alliance as a “fantastic opportunity”.
“We’re delighted that the stores are joining the Londis and Budgens brands,” he added.