‘We are a business-owned co-operative’

Nisa is a recognisable brand on many UK high streets, but this mutual has only recently recognised its co-operative status. Nisa was founded in 1977 by two entrepreneurs,...

Nisa is a recognisable brand on many UK high streets, but this mutual has only recently recognised its co-operative status. Nisa was founded in 1977 by two entrepreneurs, Dudley Ramsey and Peter Garvin, as a buying group for independent retailers in Yorkshire. Buying on behalf of 30 independent shops, it turned over £20m in its first year.

Today, Nisa turns over £1.5bn a year and serves over 4,000 independent retailers across the UK and beyond, providing them with a lot more than a bulk-buying service. The retailers that Nisa serves are primarily small, local shops, but also include larger chains such as Costcutter and McColls, just over 1,000 expat stores abroad, and around 50 larger supermarkets.

In 1989, Nisa opened its first distribution base in Scunthorpe, closely followed by three more around the UK, meaning that it could bulk-buy products at lower prices and deliver them too.

This was followed in 2004 by a further development: offering independent retailers the opportunity to use Nisa branding and promotions for their stores. It has since developed its own ‘Heritage’ product range, which currently has annual sales of £200m.

Because it was founded by two entrepreneurs, the current CEO of Nisa, Neil Turton, explained that the business has only recently recognised its mutual nature. “We didn’t think of ourselves as a co-op,” he said, “and have only recently become involved in Co-operatives UK and the wider co-op movement.”

There is a sense that Nisa’s involvement in the movement is intended to help it strengthen engagement and commitment among its independent member businesses in order to see off attempts at demutualisation, including “two take-over bids we fought off over the last few years”.

Nisa’s mission to deliver a benefit to its members is very clear. For Mr Turton, Nisa exists to offer its members quality products at cheaper prices, with better service, than its competitors.

This means, first of all, that Nisa members are not obliged to buy from Nisa or to use its branding. Stores choose each week whether to order from Nisa or to use another wholesaler, depending on the market and promotional deals being offered. “Members don’t have to buy from us,” said Mr Turton, “they do because we get it right.”

Equally, many retailers choose not to trade under the Nisa brand. “Independent retailers like trading under their own name, often having a family history.”

Significantly for its members, Nisa’s aim is to generate very little profit for the business itself, but instead works to keep costs down so it can provide financial returns to its members through rebates and dividends.

In the last financial year Nisa made an operating profit of £5.4m (0.38%), while in the last six months alone, £17m was returned to members as rebates.

This low level of profitability means Nisa has “tiny margins of error” and it can be hard for the organisation to demonstrate its commercial success to banks and insurers. But it makes a big difference to its members, and the single-minded focus on financial member benefit provides a strong incentive for independent retailers to join Nisa.

Mr Turton recognises the relatively unique position this puts Nisa in: “Not many chief executives are worried about explaining to the board that the profits are higher than expected,” he said.

More from the conference:

James Walton: ‘There is no room to be complacent’
Professor Tim Lang: ‘I have a very sober view of the food system’
Lukáš Nemcik: ‘Get to know the Customer’
Todor Ivanov: Euro Coop encourages European co-operatives to share best practices
Professor Johnston Birchall: Governance lessons from the world’s largest co-operatives
Steve Murrells: ‘We have fallen out of love with food’

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