Costcutter to introduce value brand

Costcutter is preparing to introduce a non-branded store fascia to fulfil the lower end of the convenience market as part of its strategy to elevate perceptions of the core brand.

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The as yet unnamed brand will be the third tier in Costcutter’s new approach to segmenting the convenience market and offer separate propositions to target the upper, core and lower end of the market.

Costcutter revealed its upmarket MyCostcutter brand fascia last week.

The symbol group operates 1,600 convenience stores as part of its franchise business and expects to convert 300 stores under the non-Costcutter brand from next year. Around 100 will become elite MyCostcutter branded stores while 1200 stores will retain the core Costcutter brand and white fascia.

Ian Bishop, Costcutter marketing director, says the chain has had the same look for 25 years, adding that the business hasn’t changed much in more than a decade.

The symbol group says it did not know enough about its retailers or customers so carried out a segmentation study and found three distinct tiers that didn’t exist 10 years ago, but it only had one offer to serve all three.

“We want to make people look at our brand again but the difficulty is that the standards of retailer vary across the estate and we are only as good as our worst retailer,” he says.

“What we want to do is improve standards across the estate and take the Costcutter brand upwards. If we look at our bottom end, some stores aren’t as good as they should be, but we don’t have a product that fits the lower end of the market. We want to create a product that fits that need, protect our core brand and develop an elite offering in MyCostcutter.”

The value chain will compete with the likes of Netto, the core Costcutter brand takes on Nisa Today’s and Londis while the “elite”

MyCostcutter brand has been developed to compete with chains such as M&S Simply Food and Waitrose.

The group plans to launch a TV and national press ad campaign next year to communicate its positioning.

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