It has been reported that all 16 Netto stores in the UK will close at the end of August this year, just two years after launching.
Dansk Supermarket Group (DSG), the parent company and Sainsbury’s have confirmed the joint venture will end after a review that assessed trade data, expansion costs, long term strategies and customer and operational insights.
Mike Coupe, Sainsbury’s chief executive, commented: “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.
“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.
Adding: “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.
“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 Sainbury’s will work together to support colleagues through this period of change.
