Co-op Retail CEO Jo Whitfield has promised to “do a great job for Nisa members” as she set out plans for the buying group after completing a £173.5m takeover this week.
Whitfield said the Co-op was investing in price, with reductions for retailers across some lines by up to 20%, as well as beginning the rollout of an initial 800 Co-op own brand lines over the next few months. She also looked to allay fears that Costcutter retailers, who will be supplied by the Co-op through Nisa from the end of this month, would get better terms than Nisa members.
Justice for Nisa, a group of rebel Nisa shareholders who unsuccessfully tried to block the final court approval of the takeover last week, had written to Nisa members claiming to have seen a letter from Costcutter to its retailers detailing the terms they would receive as part of the Co-op contract. Justice for Nisa argued clauses in that letter referring to zero surcharges and 6% rebates looked like better terms than they had previously received via Nisa.
Whitfield did not reveal any specifics of the terms for either Nisa or Costcutter, but she stressed to The Grocer that Nisa members would be looked after.
“The relationship we have with Costcutter is a supply relationship, through Nisa,” she explained, adding that it would be Costcutter that would set the rates for its own retailers.
“It’s actually a very separate and distinct relationship than the relationship we’ll have with our Nisa partners,” she said.
Whitfield added the Co-op would ensure “keen prices” for Nisa members. “And there will also be offers and product opportunities that will be available to Nisa partners that wouldn’t be available to Costcutter,” she said. “So, it’s a great relationship to have Costcutter involved as a supply partner because that obviously brings scale for everybody and helps underpin cost prices for everybody. But Costcutter is its own business and therefore, they’ll invest and set their own prices for their retailers. That’s not something we can influence and control. But we will be ensuring we do a great job for our Nisa partners.”
Whitfield went on to say that continuing to drive scale through Nisa, which will be led by new CEO Ken Towle, was a key part of the Co-op’s plan.
“We have high ambition around the ability to win business and to grow the Nisa business. Ken and the team will be laying out their view of opportunities for us to go and win additional contracts,” she said. “We believe it is a great platform for growth and this partnership brings scale that really helps power the Nisa business forward.”
Whitfield reaffirmed the Co-op’s commitment to Nisa’s existing distribution contract with DHL and said it would continue to operate the Nisa supply chain completely separately from its own retail supply chain.
“Certainly for the first few years, we intend to invest in our retail network and ensure that supports our business and run the Nisa network separately,” Whitfield said.
“But we are open to the point that there’ll come the right opportunity to start to bring those two things together in a couple of years, when we want to start to get the right level of cost efficiency that we can then start to invest back into the business.”