Nisa-Today’s has awarded a £500 million contract to DHL Supply Chain to manage its distribution requirements. The contract, which will start in April 2011 and run for seven years, will see DHL handle all of the retail buying group’s central distribution activities to its national members.
The deal follows a decision by Nisa-Today’s to reject a second takeover bid by Bibby, which currently handles the group’s ambient distribution. The bid reportedly valued Nisa-Today’s at £133m.
For the past 15 months Nisa-Today’s has been running a tender process with six potential suppliers. Selecting DHL allows Nisa Today’s to consolidate its UK distribution operations.
As part of the new composite distribution model, DHL will manage ambient, frozen and chilled products through all three of the group’s warehouses to optimise flow of product across the network. This will allow smaller and more frequent deliveries to be made to all stores.
“After a period of consideration, taking into account all elements of the tenders, we are delighted to award the future distribution contract for post 2011, to DHL Supply Chain,” said John Sharpe, managing director central distribution trading and logistics at Nisa-Today’s.
Nisa Today’s is owned by its retailer members. Bibby holds a majority stake in Costcutter, which is a member of Nisa Today’s, and launched its bid for the group in July saying that “the intention was to create the largest integrated distributor to independent retailers in the UK with the many mutual benefits this could bring.”