Netto’s UK Return

Region

United Kingdom

Associated With

J Sainsbury and Dansk Supermarked - 50:50 joint-venture partners

Defining Feature

A sixteen-store discount supermarket trial tailored to British shoppers

Status

Closed - trading ceased on 30 July 2016

Overview

Netto’s UK return was a short-lived discount supermarket trial run by Sainsbury’s and Dansk Supermarked.

Its first shop opened at Moor Allerton in Leeds in November 2014, bringing back the Netto name with fresh food, an in-store bakery and rotating weekly offers aimed at British shoppers.

The partners reported that the trial had reached sixteen stores. Trading ceased on 30 July 2016.

Why It Mattered

For Sainsbury’s, the partnership offered a way into discount retail through a separate supermarket brand. But testing the idea in a handful of shops was different from building a lasting competitor: the partners said continuing would require rapid expansion, further investment and suitable sites.

Venture Launch and Rollout

• J Sainsbury and Dansk Supermarked announced the 50:50 UK venture on 20 June 2014, initially planning a fifteen-store trial by the end of 2015.
• The first shop opened at Moor Allerton in Leeds on 6 November 2014.
• The partners described the launch range as exceeding 2,000 products tailored to British customers.

Closure and Reported Costs

• On 4 July 2016, the partners announced that they would end what they described as the sixteen-store trial.
• The July announcement expected trading through that month and closures in August; Sainsbury’s later reported that the operation ceased trading on 30 July 2016.
• July estimates separated a £20 million investment write-down from approximately £10 million in winding-down cash costs; the November statement later recorded a £23 million Netto closure charge.

Conflicting Counts and Record Limits

• Colliers later claimed that 22 stores opened, conflicting with the partners’ closure-stage count of sixteen used in this record.
• The consultant said disposal deals for open stores and pipeline sites had been agreed by March 2017, but did not establish completion dates for individual properties.
• A complete branch-by-branch opening and closure schedule has not been recovered beyond the Moor Allerton launch and the venture-wide cessation date.
• The reviewed records do not establish customer satisfaction or the profitability of individual branches.

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