Nisa retailers: Pricing concerns are threat to Co-op deal

A tie-up between Nisa and Co-op could be blocked by members concerned over pricing and the proposed payment structure.

A national roadshow co-run by both companies launched last week with events in Scotland, Leeds, Manchester, Birmingham, London and Northern Ireland, and more scheduled for the next two weeks.

If the deal goes ahead, shareholders will receive an initial payment of £20,000 followed by additional rebates over four years.

Retailers fear they could end up paying a higher cost price than Co-op stores due to additional inbound costs. They also alleged Co-op refused to guarantee the deal would make Nisa retailers’ purchasing more competitive, or supply price lists or other evidence supporting this.

Julian Hull, of Nisa Local in Southminster, who attended the London roadshow last week, said: “It’s difficult to say whether this will be a good deal for us. There’s a concern we won’t get the same prices when buying as Co-op’s existing stores.”

Siva Thievanayagan, who owns five Nisa Locals in Peterborough, added: “We asked the Co-op if it could guarantee a pricing model. It said it couldn’t. Why would it put an offer on the table if it can’t do that? It would be confusing to stock Co-op products alongside Nisa ones too.”

Another Nisa member, who asked not to be named, said: “We asked for evidence and a guarantee that prices would be cheaper and they said we’d have to trust them, but it’s clear from the drip-fed share payouts proposed that they do not trust us.”

Meanwhile, another retailer who asked not to be named said there is a divide between retailers with multiple stores and those with one or two.

“The silent majority were positive but the loud minority were not,” he said.

“A lot of people were getting wound up about the fact Co-op is going to pay over five years, but smaller retailers will suffer in the next two years if a deal isn’t done.”

Harj Dhasee, of Nisa Local Village Stores in Mickleton, Gloucestershire, said: “I was 60/40 in favour before I went but now I am 80/20. My main concern was about maintaining independence and making sure my voice would still be heard. They were very reassuring about that.”

A Nisa spokesman said: “We’ve been very pleased by the large turnout at the first round of regional meetings. We look forward to meeting with members again in the coming weeks, but ultimately it will be for each Nisa member to decide whether or not they wish to accept it.”

The Co-op said “input costs” will be the same as for Co-op stores, but could not confirm equal cost prices due to “different operating and cost models.”

A spokesperson for the company said: “You can’t compare like for like in terms of net cost price, but we believe this deal will make Nisa members more competitive in terms of the price, breadth and quality of product.”

Retailers also told Retail Express that Nisa execs painted a “bleak picture” of the company’s future if the Co-op deal was not made and said they wanted to see a “Plan B” option for if the deal is rejected, but none was presented.

Asked to outline its plans in the event of a no vote, a Nisa spokesperson responded: “The focus will be on value for members; low prices, effective promotions, customer choice, and ensuring we are as competitive as possible in this fast-changing convenience environment.”