Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Sainsbury's, Dansk Supermarked to bring Netto stores back to UK

Published 20/06/2014, 10:44
Sainsbury's, Dansk Supermarked to bring Netto stores back to UK
SBRY
-
WMT
-

LONDON (Reuters) - British grocer J Sainsbury and Denmark's Dansk Supermarked plan to spend an initial 25 million pounds ($42.64 million) to bring the Netto brand back to the UK, seeking a slice of the country's fast-growing discount sector.

The two companies said on Friday they have formed a joint venture that will see 15 Netto stores opened in the UK by the end of 2015, with the first opening in northern England later this year.

If the trial is successful, the next stage of the joint venture will see the new stores rolled out across the country, in a bid by Sainsbury's to win a slice of the UK discount sector currently valued at about 10 billion pounds ($17 billion) in annual sales. The sector is forecast to double in value in the next five years, according to data from industry body IGD.

The return of Netto is also an attempt by Sainsbury's to stop market share losses to the fast growing German discounters Aldi and Lidl.

The discounters have been winning business from Britain's "big four" grocers - Sainsbury's, market leader Tesco, Wal-Mart's Asda and Morrisons.

The Netto name left the UK market in 2010 after Asda purchased its UK store estate. Asda bought Netto's 193 stores and converted them to an Asda fascia.

© Reuters. BShopping trolleys are seen parked at a Sainsbury's store in London

Under the deal, Sainsbury's and Dansk Supermarked will each initially invest 12.5 million pounds in the joint venture. Taking account of start-up costs, each partner expects to incur a post-tax loss of about of 5-10 million pounds up to March 31 2015.

($1 = 0.5864 British Pounds)

(Reporting by James Davey; Editing by James Macharia)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.