Unrest on an uneven playing field
A forecourt operator sent me an anonymous update on the Nisa/Co-op situation re price differences (last raised in this column in October). He began by posting some copy from another retailer that had appeared on the Nisa retail online forum.
It went like this: "Had to pop into my local Co-op this morning to use the post office and spent one minute walking one aisle. Only looked at a few products, wow! Heinz beans 4pk Co-op £2.60, Nisa £3.60. Dolmio all variants Co-op £1.80, Nisa £2.40-£2.75. Colmans packet sauce Co-op 80p, Nisa £1.05.
"All non-promotion prices and I am sure there are hundreds more. Why such a huge difference?"
And then my anonymous correspondent writes: "This was just one post there are many like this on the Nisa forum. I firmly believe that Co-op has a long-term agenda to increase their company store sales at the expense of Nisa partner stores. The long-term future for our stores is not looking good under Co-op and unfortunately all of us ex-shareholders of Nisa have to wait until April 2021 for our third and final share payment. If you have a Nisa store in your area just pop in and take a note of their prices and then compare them with the local Co-op store, and all Co-op own-brand in Co-op stores pays out a 5% Divvy.
"It is most definite that Co-op are making ex-Nisa shareholders pay for our own shares."
A reminder is in order here. Back in November 2017 the Co-op clinched a £143m deal to take over Nisa. More than three-quarters of Nisa members voted in favour just over the number required for the deal to go through. The deal for the 1,190 Nisa owners included £20k upfront and deferred payments worth more than £410,000 for those with 250 shares in Nisa, which was the maximum allowed. At the time the Nisa chairman assured members that Co-op would be adding buying power and product range to the offering.
Back on the forum, a member of the trading team responded to one of the cost comparisons, saying: "Thank you for highlighting the recent change in the Co-op’s rsp on Heinz 4-pk beans, this was unexpected and a change we were not made aware of until your post. We are challenging the Co-op in relation to Nisa’s cost price, with a view that we receive a reduction that we can then share with our partners combined with a reduction to the current rsp."
This cut no ice with my correspondent. He says: "I believe Nisa has lost control of its operating costs, and Co-op wants a slice on top, hence rising wholesale prices. Co-op is taking advantage as most Nisa partners are ex-shareholders and are tied to Nisa until April 2021. They cannot buy outside Nisa as the share price payout is dependent on them maintaining their previous years’ buying levels from Nisa. On top of this Co-op is enjoying the lower buying-in prices from their suppliers with their increased buying power from Nisa partners’ purchases.
"Their main justifications for the rising prices do not stack up as Booker etc are not increasing prices at the same rate."
I put all this to Nisa and the Co-op but, by the deadline, neither had responded.
The rumble has now died down
The dispute between Manoj Agnihoti at Brentford Service Station and TLM, which has rumbled on for over a year now, seems to have come to a grumbling end.
Manoj had TLM’s evoPOS system installed in March 2019 on the recommendation of Kash Khera, director of Simply Fresh, to which Manoj belongs. He had several issues with the system, as reported in our June issue.
Following that episode, TLM offered him six months’ free SaaS (software as a service) as a "goodwill gesture".
This did not impress Manoj particularly as he said that six months’ service was part of the original deal and that a top-up service had also been discussed. There is still disagreement on whether the system could interface with ePay regarding top-ups. TLM is adamant that it cannot and says even ePay agrees. The problem was Manoj had been assured previously that it could.
TLM has now offered a further three months’ free SaaS and Manoj now says: "Reluctantly we accept TLM’s goodwill gesture."
All along TLM has offered to remove the equipment and return any monies paid. Manoj, worn out by all the hassle, has decided to stay with them.