Costcutter terms package in Co-op deal starts Nisa row

The publication of new trading terms for Costcutter members as a result of the new supply deal with the Co-op has kicked off a row within Nisa, as some members believe they could be unwittingly subsidising the deal.

The completion of the society’s takeover of Nisa means that Costcutter retailers will now be supplied via Nisa on a permanent basis. Retailers from both symbol groups will be ordering from the same product catalogue, but unlike previous supply deals there will be no surcharges for Costcutter retailers under the new terms, effective from May 28. In addition, a ‘spend and save’-style rebate programme will also return up to 6% of spend to Costcutter retailers who remain loyal.

Nisa retailers will be receiving rebates based on trading, as well as a number of fixed payments, over the next three years in return for selling their shares, but will not be receiving additional loyalty payments.

The new arrangements have led some to question whether Costcutter retailers will be benefiting disproportionately from the arrangement. Nisa retailer Kishor Patel told C-Store: “If there are different terms for Costcutter retailers, then us Nisa retailers will be paying for it, which I’m not happy about. I’ve heard it’ll be like the previous Costcutter contract with Nisa, but with extra over-riders, no surcharges and extended credit.”

Another Nisa retailer said: “Nisa is now the wholesale arm of the Co-op, whereas Costcutter just has a wholesale contract, so they are separate, but the Co-op has to understand the behaviour of Nisa retailers. We don’t know the Costcutter prices, so they will need to reassure members.”

Co-op Retail ceo Jo Whitfield said: “Costcutter is its own business and will have its own pricing and can invest its own terms as its chooses. They will bring additional scale, and we are looking forward to a great relationship with them.”