The Rise and Fall of Netto UK Supermarkets

Netto UK supermarkets had a remarkable rise in popularity, but their story ultimately ended in closure.

Their first UK store opened in 1995 in Peterborough, marking the beginning of the Danish supermarket chain's expansion into the British market.

Netto UK's popularity soared in the late 1990s and early 2000s, with over 200 stores across the country.

However, the chain struggled to compete with larger retailers like Tesco and Asda, and by 2011, Netto UK had begun to close stores.

Netto UK has a fascinating history that spans over two decades. The company was established in the UK in 1995 as a subsidiary of the Danish retail group Dansk Supermarked Group.

Its first store opened in 1995 in Scunthorpe, North Lincolnshire, and was initially met with a mixed response from customers.

Netto UK focused on offering a unique shopping experience, with a focus on providing a wide range of products at affordable prices.

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The company's business model was based on the "outlet store" concept, where products were sold at discounted prices due to their proximity to expiration dates or packaging changes.

Despite its initial struggles, Netto UK managed to establish a loyal customer base and expand its operations to over 200 stores across the UK.

However, in 2015, Netto UK announced that it would be closing all of its stores and ceasing operations due to poor sales and increased competition from other retailers.

Sainsbury's had to make a difficult decision about Netto UK, deciding not to pursue the opportunity further.

This decision was likely due to the significant investment required to grow and expand the store estate in a challenging property market.

Mike Coupe, chief executive of Sainsbury's, stated that Netto would need to grow at pace and scale, requiring substantial investment and rapid expansion.

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In May 2010, Netto UK was bought by Asda for £778 million to increase its smaller store portfolio.

This significant acquisition allowed Asda to expand its reach in the market and tap into new customer bases.

Asda completed the rebranding of 147 former Netto stores under the Asda brand by 29 November 2011, marking a successful integration of the two companies.

However, competition laws required Asda to sell the remaining forty seven stores to other companies.

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Mike Coupe, the chief executive of Sainsbury's, admitted that it was a difficult decision to abandon the Netto opportunity due to the need for significant investment and rapid expansion in a challenging property market.

The company had invested £20m in the trial, which would now be written down to zero.

Sainsbury's had to focus on its core business and the opportunities arising from its proposed acquisition of Home Retail Group.

The company expected to incur £10m in wind down costs, but these would not affect its underlying results.

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Netto UK has a total of 195 stores across the country.

These stores are located in various regions, including the North of England, Scotland, and Wales.

Netto UK stores are open seven days a week, with typical store hours between 8am and 10pm.

In 2011, 193 Netto stores were sold to Asda, which then disposed of some of these stores to other companies.

Asda rebranded 165 of these stores to carry their own brand.

Twenty stores were initially sold to Haldanes, who unfortunately went into administration in 2012.

These 20 stores were later sold to Poundstretcher.

Twenty-seven stores were sold to Morrisons.

Three stores were demolished, with one of them being the Netto store in Halifax, West Yorkshire.

This store was later proposed to be turned into offices, with the car park being developed into an entertainment complex.

The store in Wolverhampton City Centre was also demolished in 2015 and developed into a new market area.

The store in Canterbury was demolished and rebuilt into student accommodation called St Georges Centre.

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Netto stores operated under a discount supermarket style store format, mirroring the concept of Kwik Save brand.

Many prices at Netto stores were similar to wholesale prices, which made shopping more affordable for customers.

To ensure fairness to all shoppers, Netto implemented a limit of six offers per person.

Netto stores sold brand name products, such as Pepsi and Walkers Crisps, which were often parallel imports.

Netto UK has undergone significant changes in recent years. The company has been working to improve its logistics and supply chain, which has resulted in a more efficient distribution process.

Netto UK has reduced its carbon footprint by implementing a more sustainable transportation system, which includes the use of electric vehicles. This change has not only benefited the environment but also improved the company's overall efficiency.

The company has also been focusing on reducing food waste, with a goal of donating excess food to local charities and food banks. This initiative has helped to reduce waste and support the local community.

Netto UK has been working to improve its store operations, including the introduction of new store formats and layouts. This has resulted in a more streamlined shopping experience for customers.

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