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All Netto stores to close down as Sainsbury's joint venture trial ends

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All 16 of Netto’s UK stores will close down by the end of next month, just two years after the discount grocery retail brand was launched.

The parent company of Netto, Denmark-based Dansk Supermarked Group (DSG) and Sainsbury’s confirmed today their joint venture of trial Netto stores will end after a comprehensive review that assessed trade data, customer and operational insights, expansion costs and long term strategies.

“Since we first envisaged the trial, almost three years ago, the grocery sector has evolved significantly and we launched our strategy 18 months ago to address these changing dynamics,” Sainsbury’s chief executive Mike Coupe said.

 “Against this backdrop, as planned, we carried out a detailed review with DSG on the future of Netto. To be successful over the long-term, Netto would need to grow at pace and scale, requiring significant investment and the rapid expansion of the store estate in a challenging property market.

“Consequently, we have made the difficult decision not to pursue the opportunity further and instead focus on our core business and on the opportunities we will have following our proposed acquisition of Home Retail Group."

DSG chief executive Per Bank said they “thoroughly enjoyed” the collaboration with Sainsbury’s.

“Whilst we are pleased with the performance of the stores to date, it has become clear to both partners that the business requires greater scale over a short period of time to achieve long-term success,” he said.

“Reaching scale has been challenging due to appropriate site availability and therefore we decided together to end the joint venture and focus on other opportunities within our respective businesses.” 

Both DSG and Sainsbury’s have said they were working together to minimise the impact of store closures on Netto colleagues and would consult and support colleagues through this period of change.

Published on Monday 04 July by Elias Jahshan

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