The introduction of Nisa’s innovative wholesale fresh produce service has seen sales soar in the stores of the independent grocery chain. Produce Business UK speaks to Greg Goodwin its head of fresh and frozen to see why the service was launched and how other promotional activity has seen a spike in produce sales
In March, the independently owned grocery chain Nisa rolled out a new wholesale fresh produce service in order to give its members the opportunity to buy loose produce in greater quantities.
Launched with the intention of improving efficiencies and increasing profit margins, the launch has been an unequivocal success. Nisa members have been enthusiastic about the service and its potential, and this has been reflected in the numbers. In just four months (the service began on March 7), sales of loose fresh fruit and vegetables have increased by 40.2%, with retailers keen to take advantage of the competitive deals available.
Moreover, the new service has seen 65 new members source fresh produce from Nisa for the first time.
As part of Nisa’s increased focus on promotional activity for the coming year, a number of fresh produce items are now featured on the consumer leaflet each promotional period, driving sales in member stores and helping Nisa retailers to stay competitive in the market. Further to this, the cost of 33 fresh produce items were also recently reduced to enable members to benefit from a competitive retail price whilst maintaining strong profit margins. Since this additional promotional activity began, produce sales have seen an uplift of 16.4%, with a number of products experiencing significant growth, including cucumbers, which saw a 103% uplift, bananas, which saw growth of 124%, and button mushrooms which experienced a huge uplift of 274%.
After a period of uncertainty for the chain – and its 2,500-plus stores nationwide – Nisa is on the up once more. Produce Business UK spoke to Greg Goodwin, head of fresh and frozen at Nisa, about its wholesale fresh produce service, its other exciting plans and what the future holds.
PBUK: Can you explain what your new fresh produce wholesale service is?
Greg Goodwin: “The fresh produce wholesale service allows Nisa members to buy fresh produce in larger quantities rather than the traditionally smaller cases associated with the convenience sector. Buying in larger quantities enables members to buy at better costs and lower their retail prices for their consumers.”
PBUK: Why did you launch it?
GG: “With fresh produce in the convenience supply chain generally supplied in smaller quantities, getting a competitive price which allows the retailer to be more competitive on retail price is a challenge. Many Nisa members purchase larger quantity loose produce from local markets, which is very time consuming, Nisa has therefore given its members the opportunity to purchase a selection of loose produce in larger quantities, helping them to save time and be more competitive in the market.”
PBUK: How does it work?
GG: “Nisa members have visibility of weekly wholesale pricing, they can order these products with their normal Nisa orders and get great wholesale prices on produce delivered to their door.”
PBUK: Was it in response to requests from members?
GG: “Yes, the members challenged Nisa on this as many were buying produce outside of the group. Furthermore, fresh produce has become increasingly competitive in the market, as discounters and multiples drive down the price, so Nisa members were looking for ways of being more competitive.”
How has it been received by your members?
GG: “The new fresh produce wholesale service has been received very well by members. Nisa member Richard Cox, OF Nisa Local, Southminster told us: ‘We have been buying fresh fruit and veg from the new wholesale service on Nisa’s [order capture system] OCS and we are really happy with the quality, while prices are beating those delivered direct from the market,” said ‘So a BIG THANK YOU to the buying team on a job well done everyone, should give it a trial and see profits increase.’”
PBUK: What benefits does it bring to suppliers? Are suppliers happy with the new service?
GG: “The suppliers of our fresh produce have supported the initiative and have been pleased with the increased volume it is driving through their businesses as well as bringing increased supply chain efficiencies. The fresh produce initiative enables suppliers to be proactive when it comes to crop flushes. As suppliers are always first to see an increase in supply and they are happy to give the benefits of these to Nisa members before anyone else.”
PBUK: What has been the result?
GG: “The initiative has already seen volume increases on these fresh produce lines rise by 80%. In addition the new service has opened the door to Nisa fresh produce for 65 new members who had previously not taken it.”
PBUK: Can Nisa now compete with the discounters more robustly and competitively?
GG: “The intention is to give our members a convenient and efficient way to purchase fresh produce, ordered online and delivered to their door, which offer sector leading prices and a healthy profit margin, enabling them to perform competitively in a market place where the discounters and multiples are chasing the lowest price.”
PBUK: What other services are you looking to launch? Anything else in the pipeline?
GG: “Nisa is always looking to launch new initiatives for its independent retail members most recently this has included a member delivery app, a bank holiday bonanza, a wine festival, a newly launched order capture system and a reformulated award-winning own label range.”
PBUK: Nisa looks to have turned itself around this year, what has been the secret behind this?
GG: “2015-16 was a challenging year as the new executive team, strongly supported by all employees, focused on stabilising Nisa while restoring confidence and profitability to the business. Considerable credit is also due to our members for remaining loyal throughout the year. Our retail teams have enjoyed a positive year of recruitment, boosted by a pleasing fourth quarter, which is testament to the faith members place in the long term future of Nisa’s mutual model and its unrivalled offer, making Nisa the partner of choice for independent retailers.
“Nisa’s turnaround strategy, which started following the appointment of Nick Read as CEO in February 2015, has led to an improvement in performance, driven by sales and volume growth, an enhanced trading margin, better distribution efficiencies and a successful reduction of overhead costs.”
PBUK: What does the future look like for Nisa?
GG: “Nisa will continue to provide a sector leading offer for independent retailers, providing a complete retail support package which comprises a strong retail focused team, an enhanced category management system, a bespoke staff training facility under the Retail Academy banner, and a comprehensive marketing package. All of this is in addition to the award-winning supply chain, a strong own label range and over 13,000 SKUs.”