The clouds rolling down the side of the mountains that cradle Monte Carlo could have been a portent of things to come. It was the opening day of the annual conference for the retail arm of Nisa-Today’s. And as delegates prepared for the business ahead, the main subject of debate was the explosive contents of the letter from Somerfield’s John von Spreckelsen to Nisa-Today’s chairman Dudley Ramsden that had been leaked to the press.
Clearly, the timing of the leak was no coincidence, coming as it did the day before the Nisa conference was due to start. As The Grocer reported last week, the letter was actually sent by von Spreckelsen, a non-exec director of Nisa-Today’s, in July. But it raised a host of issues about corporate governance in the group and revealed that talks had been held with The Co-operative Group about a possible takevover.
It also followed a summer of discontent for Nisa-Today’s. First there were the rows in the group’s wholesale division over subscription rates, then the public debate about Ramsden’s salary, which was in turn followed by supplier concerns over being asked to support the group’s new NDC in Scunthorpe with extended credit for dual stocking as it geared up to open the facility.
If he’s weary of all the recent debate, Ramsden hides it well. He says only: “There’s been a lot of mischief-making - probably from outside the group.”
So what about the reports that wholesalers were thinking of leaving the business in a row over subscription rates?
“It was much ado about nothing,” says Ramsden. “We have 350 wholesalers and about half a dozen or so complained about subscriptions. But subscriptions are an emotive issue and rightly so. It’s all been resolved and it was resolved as quickly as it started. Wholesalers understand that the
wholesale arm can’t be subsidised any more by retailers and we are going forward again.”
He adds: “I am sure our competitors look at us with envy. We are the biggest and best in the sector and I am sure our members, if you asked them, would say they are satisfied with the services we provide everybody.”
After 29 years running the same business, you inevitably create as many enemies as friends. That may explain why some of the attacks have got so personal, particularly over Ramsden’s £400k annual salary and allegations about payments should any bid be made by the Co-operative Group.
Ramsden says: “When we renegotiated my long-term contract three years ago, which does not expire until I am 65, the plan was that I would do a lot fewer hours and take a 75% cut in salary [from £800k to £200k]. But times have changed. I’m doing far more work and far more hours than we envisaged, so the board felt that a 75% reduction was too harsh,” he explains.
But what about possible payments from any Co-op bid? Ramsden says simply: “There was never any discussion about what executives would get.”
As for the letter from von Spreckelsen, Ramsden says: “It’s history.”
Many of the issues it contains were discussed at a recent board meeting, he says, and Nisa-Today’s was already taking steps to improve its corporate governance. He adds: “That’s why it was a surprise that somebody should be disloyal and circulate a private letter to coincide with the first day of the Nisa conference.”
Ramsden accepts the biggest bombshell in that letter was the revelation that informal talks had been held with The Co-operative Group. He says: “The main converation topic at conference is The Co-operative Group supposedly making a bid. I think they were serious. A company of their size and integrity had to be serious when having preliminary discussions. But both parties agreed not to take it any further after these discussions.”
Clearly there was a plenty to discuss in the bars and corridors of the conference hotel the night before the event began. That made for a tricky start for Ramsden and his Nisa colleagues. But they handled it well. And delegates pretty quickly forgot about the mist that had been threatening to swirl around the conference, focusing instead on the more pressing issue of how they can continue taking on the 800lb supermarket gorillas in their midst.
First, there was a frank admission: communication with suppliers could have been better over the support being sought by Nisa-Today’s as it prepares for the opening of its NDC.
But the message from group managing director John Schofield was clear: the group isn’t asking for much when you consider the huge benefits that suppliers will enjoy once the facility is up and running.
Retailers, too, were reminded that they needed to continue supporting the central facilities offered by Nisa. Loyalty and discipline would drive the volumes that were needed to get the best prices from suppliers. With that in mind, Nisa launched its New Era trading terms at the conference to reward its most loyal retailers with an extra 1.5% quarterly rebate.
Delegates heard about a raft of other initiatives and developments under way in the business, from new IT solutions that will make life easier for retailers to new product ranges to the way the group is growing volumes and membership.
It was all positive stuff and well received by the audience. As delegates filed out of the conference room for lunch on that that first day of business you couldn’t help noticing that the sun had broken through while the clouds had lifted over the Alps. And so had pretty much everybody’s mood.