Sainsbury’s makes merger model progress with Nisa

Sainsbury’s is likely to propose a deal to Nisa members, according to industry sources who told Retail Express that “strong progress” is being made.

Three options for how Nisa’s retailers would operate post-merger were allegedly discussed with Nisa retailers at six regional meetings, with access to Sainsbury’s own-label range and increased buying power said to be a focus of the talks.

Regardless of what model the merger takes, for any deal to be approved at least 75% of members’ votes would have to be in favour of the proposition.

Nisa is legally obliged to take any reasonable deal to shareholders for approval.

Describing the six meetings as “well attended”, a spokesperson from Nisa told Retail Express: “The overwhelming sentiment of Nisa’s members is their firm wish to be able to evaluate an offer for their business, should one be forthcoming.”

One Nisa retailer told Retail Express: “I think Nisa has got to the point of ‘if we can’t beat them, join them.’ A deal may be the only way we can remain competitive.”

Another said that the proposal was “promising” if the margins were right. “We’re not in the business of having a name above the door that doesn’t deliver margins for us,” they said.

Of the meetings, one Nisa member said: “There were a lot of questions for any potential new owners to answer, but even more for the current owners.

“We need to know where we stand and how we can plan for the future.”

Sainsbury’s-Nisa three-tier supply model

• An option to become Sainsbury’s Local franchise stores. This would be dependent on footfall, revenue, store size and not being in a location that cannibalises an existing
  Sainsbury’s Local.
• A continuation of the Nisa symbol model, with limited access to Sainsbury’s own-label products redressed under Nisa’s Heritage brand. No products would include reference to Sainsbury’s.
• A ‘business as usual’ approach to the Nisa symbol model. There would be no access to Sainsbury’s products, but these retailers would benefit from improved buying power.