Nisa Retail chief executive Nick Read has shrugged off the loss of the McColl’s contract to Morrisons after a competitive tender process that he says was concluded nine weeks earlier than expected.
As a result, Morrisons will start to supply McColl’s stores in a phased roll-out from January 2018, although existing supply contracts with Nisa do not expire until June 2018 in the case of its core business, and March 2020 in the case of the 298 stores McColl’s recently acquired from the Co-operative Group.
Read said: “We are disappointed that the tender process has been halted nine weeks early - before there had been a chance for follow up conversations and proposals - especially when sales at Nisa-supplied McColl’s stores were 8.4% ahead of budget. Nevertheless, Nisa has contracts in place with McColl’s that continue until June 2018 and March 2020, and we remain well placed to deliver our award-winning product to the specialised convenience sector.”
He continued: “Nisa’s third party distribution model is highly flexible, enabling the company to quickly adapt to changes in demand. Moreover, current trading at Nisa is strong, and while we value all our members, the McColl’s business was a low margin contract. Accordingly, with strong trading, our recently announced new bank financing, and several new business wins, we remain well positioned to provide a sustainable business model for the benefit of all our members.”
Nisa recently announced full-year results for the 52 weeks ended 2 April 2017, reporting a pre-tax profit of £2.8m. The business also announced a cheaper and more flexible banking facility in June.