Discounter Netto brings much-needed expertise to Sainsbury

“Our job is to be close to customers in the UK. We’re not experts in running low-cost sites, we’re not experts in running limited ranges – that’s their core expertise,”​ King told FoodManufacture.co.uk at the Consumer Goods Forum 2014 in Paris. “If you look at Netto stores in Denmark, it’s a different kind of proposition.”​

In addition to its strength in discount formats and cut-price ranges, Netto offered the organisational abilities and functions to execute them effectively, King said. “They bring their supply chain, system and operational skills to the UK.”​

He also pointed to the fact that Netto had prior knowledge of UK retailing, having only exited the market in 2010 after Asda bought its UK store estate.

‘Radical change’​

In an earlier presentation, King stressed the impact of the recession on UK consumers had led to a lasting change. “There has been a radical change in the shopper in terms of household budget from the first quarter of 2010.​

“Overnight, the weekly grocery shopping basket in the UK was one item fewer and it stuck. The consumer started spending money in a different way and our view is this is a permanent state of affairs.”​

That was why it was vital to meet the needs of increasingly frugal shoppers and why Sainsbury and Netto had announced their joint venture earlier today​ (June 20), he said.