Retail: Sainsbury’s to back return to the UK by discount brand Netto

The Netto discount supermarket brand is to return to the UK. The Netto discount supermarket brand is to return to the UK.

Friday, June 20, 2014
4:27 PM

Discount supermarket Netto is to return to the UK as part of a joint venture with Sainsbury’s that will take on booming rivals Aldi and Lidl.

To send a link to this page to a friend, you must be logged in.

The Danish supermarket, which left the UK in 2010, will open 15 stores in the next year in a deal funded by Netto owner Dansk Supermarked and Sainsbury’s.

Sainsbury’s said the move allowed it to enter the fast-growing discount sector, worth an estimated £10 billion a year, without diluting the established reputation it has built up at its supermarkets, convenience stores and online.

The big four supermarkets Sainsbury’s, Morissons, Asda and Tesco are in the middle of a price war as their market shares are squeezed between discount retailers such as Aldi and Lidl and upmarket rival Waitrose.

Tesco, Sainsbury’s and Morrisons all saw their market shares slip in the 12 weeks to May 25, compared to a year ago, according to till-roll figures from Kantar Worldpanel.

But Lidl hit a record market share of 3.6% driven by its highest ever year-on-year growth of 22.7% while rival Aldi grew 35.9% over the year and retained its record 4.7% market share.

Sainsbury’s and Dansk Supermarked will both plough £12.5million into the new Netto operation, and each partner expects to book a post-tax loss of between £5m and £10m up to March 31, 2015.

The first new Netto store will sell a range of fresh food as well as incorporate an in-house bakery.

Mike Coupe, Sainsbury’s chief executive designate, who takes over from long-serving boss Justin King next month, said: “This joint venture provides a great opportunity for us to gain exposure to the high-growth discount market for the first time in partnership with Dansk Supermarked, whose expertise and values are a strong complement to our own.”

When Netto left the UK market nearly five years ago it sold its 198 stores to Asda. The business was first established in the UK in 1990.

The new stores will sell 2,000 products, similar to Aldl and Lidl and up from the 600 stocked at the time of Netto’s sale.

0 comments

Comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Forgotten your password?

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

ADVERTISEMENT

ADVERTISEMENT

loading...

ADVERTISEMENT

ADVERTISEMENT