Costcutter stores face ‘massive disruption’ at the beginning of 2026 when Nisa has confirmed it will cease supplying fresh, chilled and own-label into the Bestway-controlled symbol group.
Senior sources told RN that Nisa had angered Bestway by ‘poaching’ its contract to supply Compass Group’s more than 100 stores at the beginning of this year.
One industry insider said: “The Nisa-Compass deal, It’s 100% completed but will take about six months to become operational.” Both Compass Group and Nisa refused to comment on the change. The sources alleged the move had impacted Bestway’s tendering for the Costcutter supply deal.
Separate sources close to Bestway said Sainsbury’s and Morrisons were “frontrunners” in the negotiations to supply Bestway’s approximately 1,464 sites, and an official announcement is likely to be made “very soon”. While Morrisons already has a wholesale supply division for independent stores, Bestway owns a 5% shareholding of Sainsbury’s.
When challenged on these claims, Nisa confirmed to Better Retailing: “We’re not in negotiations and our contract with Costcutter ends on 31 December, 2025.”
Morrisons refused to confirm or deny the claims when approached by Better Retailing.
Bestway also did not confirm or deny the claims, telling Better Retailing: “At Bestway, our number one priority is supporting our customers and, in this case, our Costcutter retailers. Like all businesses we are looking to the future to remain competitive in the market and provide our customers with the best offer, to help our retailers thrive. We appreciate your understanding and will provide additional information when appropriate.”
The impact on Costcutter stores
Many Costcutter retailers confirmed to Better Retailing that their contracts contain a ‘break clause’ allowing them to leave if Bestway fails to supply them with a ‘like for like’ replacement, in the event of Nisa continuing its supply of Co-op own-label.
Reacting to Nisa confirming it would be ceasing Costcutter supply, one retailer told Better Retailing: “This will be massively disruptive, during peak Christmas season we’ll be looking at what’s ahead in January when we will have to completely remove one range and add in another. There’s no space for facings of both lines while stock depletes so there will be gaps, there will be lost sales. My preferred replacement would be Morrisons, but only if they can fix the massive availability issues that independent stores supplied by them are currently facing.”
The impact on Nisa and Co-op
While the Compass Group contract win – accounting for around 130 stores may be some relief to Nisa, an industry source claimed the Costcutter contract represents a significant share of Nisa’s volume. The wholesaler has been dropping in turnover ever since the Co-op acquisition – from £1.6bn full year in 2020 to £700m in its latest half-year results. The source said: “This is truly catastrophic for Nisa. They survived the loss of the McColl’s contract but the loss of Costcutter will really harm their economies of scale. The cost to serve every remaining Nisa store is likely to increase significantly. The real test will be whether the Co-op brand is strong enough to tempt some Costcutter retailers to switch to Nisa.”
However, another source told Better Retailing the contract wasn’t material to Nisa.
Sources confirmed more upheaval lies ahead for Nisa, with potential contract wins and a rebranding on the Horizon.
One senior source said: “Nisa employees have been telling customers that in a couple of weeks, their email addresses will change from ‘Nisa’ to ‘Co-op Wholesale’, it really makes you wonder why this is the case.” Better Retailing has discovered that ‘www.coopwholesale.co.uk’ was registered on 14 February 2025.
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