Nisa retailers are still considering switching over to other symbol and franchise groups despite Michael Fletcher’s promises to overhaul its operating and cost structure.
The Grocer revealed last week that the Nisa CEO was planning to review the group’s key distribution contract with DHL, while looking to reassess the rebates given to retailers and the price of Co-op own brand products to help boost their competitiveness.
The topic of price has been a growing issue for retailers since The Co-op’s takeover in 2018. Fletcher said that more work was ongoing to bring the inbound price Nisa pays suppliers for goods in line with the price paid by the Co-op, while promising a “reset” of wsp and rrp for the Co-op own-label range.
The reset of the own-brand range, which covers 2,400 Co-op, Pioneer, Honest Value and Irresistible products, looks set to be imminent and despite the concerns among retailers over the price they can buy and sell the items at compared to Co-op stores, is understood to be in double-digit growth across Nisa retailers.
However, retailers have told The Grocer that these plans have come “too late”, and the increases in product prices have become “too great to sustain”.
One retailer said: “The investment in price has not happened in the years Co-op have owned Nisa, so I can’t see it happening now.
“Product is getting too expensive from Nisa and a lot of business is going elsewhere. There are better wholesalers out there with much better price files.”
Alex Kapadia, who has a Nisa store in Northampton, said: “We already compete with a Tesco Express nearby and when I first opened up as a Nisa selling Co-op own label three-and-a-half years ago, we were very competitive with them. But now I see my chilled sales declining because my own-label price is just getting far too expensive.
Kapadia is soon to switch over his Nisa store to Morrisons Daily. He added: ”I’ve got another Tesco Express opening on the other side of me in three months’ time, so if I don’t do anything I’m going to lose even more business.”
Several Nisa retailers have told The Grocer that they were also in open conversation with other symbol and franchise groups, including Morrisons Daily, Costcutter and Budgens over doubts as to when Fletcher’s plans will come to fruition. Nisa retailer Kishor Patel said: “These changes won’t have an immediate fix, and we’ve already been patient a long time.”
However some retailers have welcomed the pledges. Matthew Hunt, MD of Filco Supermarkets said he was confident that Fletcher could bring back competitive pricing.
”I’ve spent a fair bit of time with Michael Fletcher during the sale process of Nisa to Co-op and have some confidence in his ability, but also perhaps more importantly his attitude towards the mindset of an independent business owner,” he said. “I feel he will have a lot of work to do to get Nisa back on track. He seems to have identified a cultural clash between corporate staff and independent businesses owners which may need further work. But given the space to make decisions, I hope Fletcher can make a difference and bring competitive pricing back to the Nisa business.”
Greens Retail head of retail David Bateman, who was a former retail development manager for Nisa in Scotland, welcomed the prospect of better margins and pricing but said “positive actions and a clear plan” were crucial in “mending bridges” between retailers and Nisa.
A spokesman for Nisa said: “The food retail sector has gone through unparalleled change, and Nisa is also changing to ensure our customers have a more competitive, flexible and simpler wholesale offer.
”We understand that independent retailers will be considering the best source of supply and are confident that in the short, medium and longer term our proposition will be a winning one – this is reflected in our double-digit recruitment and strong retention in a competitive market. Our changes follow feedback from hundreds of our retailers; we are excited about these plans and have received good customer feedback. We’re now focused on implementing them to offer greater value to our customers and their communities.”
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