After a summer of speculation over the future of Nisa, The Co-op made a formal offer in October that was unanimously recommended to Nisa retailers by the buying group’s board. Nisa members voted 75.79% in favour of the deal, a whisker beyond the 75% threshold required.
The Co-op deal consists of an equal initial payout for all Nisa shareholder retailers followed by a deferred share payment payable over three years as well as additional rebates payable over four years. It will now be subject to scrutiny from the Competition and Markets Authority.
Dan Brown, manager at Nisa store Giacopazzi’s in Kinross, who has previous experience in Co-op stores, said he believed taking the deal was the right move, particularly as the Tesco Booker merger means the competition has beefed up its buying power.
“I think really the reason we voted for it was if it wasn’t going to be The Co-op it was going to be someone else. There was going to need to be a scaling up at some point realistically,” said Dan, who added that the deal with The Co-op could bring some real improvements to Nisa retailers’ ranges.
“I think one of the key things in convenience is having a really good fresh range. Having worked with The Co-op before, I think they do have that. I think the quality of their chilled range is also better than what we have had at Nisa.
“I’m not convinced by their ambient range prices but we have the ability to still be able to use other wholesalers,” he said.
Aberdeenshire-based Nisa retailer Sid Ali said he has mixed feelings about the deal, partly because he believes the buying group was undervalued and partly because he reckons a deal with earlier suitor Sainsbury’s would have brought even more buying power – although he does believe some kind of deal was always going to be required.
“I think this deal prolongs our lifespan a little bit but we’ll see,” said Sid.
“I think it’s a stopgap, an elastoplast moment. I think there will be more consolidation in the market.
“That still leaves the smaller players. Where do KeyStore go? Where do Day-Today go? And I wouldn’t be surprised if someone buys Bestway.”