Nisa-Today’s creates bright future for tomorrow’s retailers
THE CHIEF executive of Nisa-Today’s, the UK’s largest buying group for independent retailers, believes its future stands as an independent business after revealing further details of why a takeover approach was rejected by members.
Neil Turton said Nisa-Today’s business model, which returns profits to its member companies and reinvests them into the business, was a block to potential suitors.
But Mr Turton said the mutually-owned company was more than pleased with its progress and did not want to entertain a possible takeover approach in the future, following two failed attempts by shipping to financial services company Bibby Line Group last year.
Speaking to TheBusinessDesk.com at Nisa-Today’s headquarters in Scunthorpe, Mr Turton said: “I don’t think the company will ever be sold or demutualised, certainly not over the next few years. For starters the profit isn’t there for a buyer.
“We don’t need the money. Our profit level makes it less attractive. I would see a chance of someone taking a very small minority investment if we needed cash.”
Nisa-Today’s, which is owned by almost 1,000 shop owners and wholesalers, rejected a £133m offer from Bibby Line last year, saying it was not in the best interest of members, would have demutalised the company and undervalued the business.
Commenting on the failed approach by Bibby Line, Mr Turton said: “The last thing we needed was a hostile bid but in the end it all worked out quite well.”
Mr Turton, who describes the group as a “hidden gem” in the region, said the episode united Nisa-Today’s’ members and reinforced the culture of the business.
“The members saw it all as being a bit patronising,” he said. “We came out of it very creditibly, with the board enhanced and a united agenda. It was six months of pain but it delivered unexpected consequences.”
Nisa-Today’s has 765 retail members serving 5,000 stores, with retailers spread across the UK and Ireland in stores ranging from 800 sq ft to 60,000 sq ft. It has 228 wholesale members serving 270 depots.
Membership ranges from multiple retailers, including Bargain Booze, to out-of-town superstores, individual retailers and cash and carry stores.
Nisa-Today’s does not own any of the stores – although some carry its branding – but negotiates the lowest cost price of products using their combined turnover powerbase.
Turnover for the year ended March 28 was £1.42bn, up from £1.22bn the previous year, while pre-tax profits were £500,000.
Nisa-Today’s made a payment of £4.5m of trading surplus to the group’s members – the highest ever in the company’s 32-year history.
Mr Turton believes that without groups like Nisa-Today’s, the number of independent retailers going out of business because of the recession, coupled with the growth of the ‘Big Four’ supermarket chains – Tesco, Asda, Morrisons and Sainsbury’s, would be higher than it currently is.
However, Mr Turton, who joined Nisa-Today’s as a buyer in 1991 and became chief executive in 2007, argues: “Independent retailer numbers have been in decline but we’ve grown and provided a safe harbour.
“We’ve been able to engender more professionalism within the sector. It’s a brilliant success story.”
Mr Turton said that although he is concerned about the march of the multiples opening convenience stores close to independent retailers, he believes many consumers would rather spend money at their locally owned shop.
“These guys are running very successful, entrepreneurial businesses and part of our job is to show people it’s a good life. We’ve got to provide the systems to do that.
“What we’ve provided is a business model where you can go and compete with Tesco Express and the big supermarkets. The purpose of our model is to create benefit for the members.”
Nisa-Today’s has a 625,000 sq ft ambient warehouse in Scunthorpe. It employs 860 people in the warehouse and a further 260 in adjacent offices.
The group, which was founded by Dudley Ramsden and Peter Garvin, also has warehouses in Harlow and Stoke.
Next week: Neil Turton on the campaign to halt the spread of the supermarket giants and why stopping cigarette displays could be bad for the health of independent retailers.
