YORK-BASED convenience giant Costcutter will double in size if its offer to tempt rival shopkeepers with a £30,000 incentive is accepted.

The company, which has its headquarters at Dunnington, claims that in just one day it had been contacted by 115 of the 1,200 Londis stores it approached to switch franchise allegiances.

The company has written to more than half of the present Londis shopkeepers, offering them £10,000 a year for three years, in return for signing a four-year trading contract.

A Costcutter spokesman said the company was keen to expand and saw an opportunity to do so.

KPMG Corporate Finance is evaluating options for the Londis chain, after its board turned down a £40m takeover by Irish group Musgrave.

Costcutter revealed it has written to premier Londis stores or those with "potential for development" and was hoping to set up meetings and complete deals "as quickly as possible". The company could not say whether its contact had included Londis stores in the North Yorkshire region. There are a number within the county.

A Londis spokesman confirmed the organisation was aware of the approaches, but said: "We can see no merit in the Costcutter proposal.

"The Costcutter letter seems to be asking shareholders to hand over to Costcutter the value they have built up over many years and then to be paid back out of their own money."

In a letter to Londis stores, Costcutter managing director Colin Graves, writes: "What do we ask from you in return? Quite simply it is loyalty.

"By bringing your volumes into our company, we also believe that additional benefits can be gained in earnings."

The Costcutter spokesman said: "We want to expand and we have made an offer to 1,200 Londis retailers.

"This would significantly expand our business - doubling it. We are a big buying power, but this would help us (to be) even more so."

Updated: 11:25 Tuesday, February 17, 2004