Independent shopkeepers in the Nisa convenience chain are mobilising in an attempt to block a potential £130m takeover by Sainsbury’s. Britain’s second largest supermarket group has started due diligence on member-owned Nisa, which sources groceries for 2,500 small shops, all owned by families and entrepreneurs.
But many Nisa members, 75% of whom must approve the deal for it to go ahead, are unhappy at the prospect of joining a big corporate rival. “The members are in shock,” said one. “Members joined Nisa because of what it stands for – the I is for ‘independents’.”
Influential member groupings in the Midlands, Ireland and London, some of which are able to pool votes under a proxy voting system, are planning to oppose the Sainbury’s deal even though they are yet to see how the numbers stack up.
The potential takeover by Sainsbury’s comes after Tesco’s takeover of Booker, the wholesaler behind the Londis and Budgens chains, raised expectations of a wave of consolidation in a market where about 80% of the UK’s 41,000-plus convenience stores are independent or belong to buying groups such as Nisa or Costcutter.
Only Nisa remains owned by its shopkeeper members, who have a say over its running, including executive pay, rules governing the proportion of stock that members must buy centrally, and the price of goods. Its 1,400 member shareholders own between one and 250 shares out of almost 60,000 in total. Only about 30 people are thought to own the maximum; most own less than 100. Under the terms of the Sainsbury’s deal, shareholders are thought to be in line to receive £2,500 per share.
One long-term Nisa member said: “The deal for one share is not going to get people excited. The devil will be in the detail, but giving up our sovereignty is a big issue for independents. There might be fresh bread today, but tomorrow it could be very stale and hard.”
Another says: “If we take our independence away, we are inadvertently creating a cartel. There will be nobody else there but the big four … Every single supply route will be corporately owned.”
One shopkeeper said a comparison with the £3.7bn that Tesco had agreed to pay for Booker suggested Sainsbury’s bid seriously undervalued Nisa.
Stephen Jempson, a Nisa member whose family has 14 outlets in East Sussex, said he would back a deal only if it offered members an element of independence and suggested that the mooted £130m price tag looked too low. He said: “Any suitor needs to remember Nisa shouldn’t be valued by its profitability or asset base,” he said. “The value to members is its lean route to market and the added benefit to the retailer bottom line.”
Another long-term member agreed: “Potentially, this deal undervalues Nisa. This is the only distributor owned by retailers, and I don’t know how it can get any better than that. Under Sainsbury’s, we are likely to be told what to do and what not to.”
But Harj Dhasee, who owns a store in Mickleton, Gloucestershire, said a tie-up with Sainsbury’s could offer opportunities: “On a personal level, running a Sainsbury’s Local franchise would be a game changer for me, because for consumers it’s all about brand loyalty and recognition. If the Tesco/Booker merger happens, they will have all the volume, and the whole industry works on sales volumes.”
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