Yorkshire is first stop for discount retailer’s roll-out
NETTO returns to the UK today with the launch of its first store in West Yorkshire.
The new-look Danish discount retailer takes the form of a joint venture between Netto owner Dansk Supermarked and Sainsbury’s.
The trial, following Netto’s departure from the UK in 2010, will consist of 15 stores to be opened by the end of 2015, the first being in Leeds’ Moor Allerton Retail Park today.
The JV said that if the trial proves successful, the next stage will see the new format rolled out across the country, tapping further into the UK discount sector, which is currently worth an estimated £10bn in annual sales and is forecast to double in value to approximately £20bn in the next five years.
Both Dansk Supermarked and Sainsbury’s invested £12.5m in the venture and given start-up costs, each business expects to incur a post-tax loss in the region of £5-10m by the end of March 2015.
Earlier this year, Per Bank, CEO of Dansk Supermarked, said: “It’s great to be bringing a new twist to the rapidly-growing UK discount sector. We’ll offer market-leading value to customers with the freshness and innovation that customers rightly associate with Denmark.
“The discounter experience, operating model and systems of the Dansk Supermarked group, combined with Sainsbury’s UK market insight, property expertise and logistics excellence will help deliver a discounter format we think UK customers will love.”
Mike Coupe, CEO designate of Sainsbury’s added: “We are very excited about helping to bring the new Netto to British shoppers. 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.
“If successful, this trial has the potential to open up a new long-term growth opportunity for us complementing our fast expanding convenience, online and non-food businesses, as well as our existing supermarket estate.”
Netto will be led by Morten Möberg Nielsen, previously managing director of Netto International in Germany.
