Netto to expand in Europe

Netto

Discount food retailer Netto is to expand operations in Europe, following the sale of its UK arm to Asda.

Asda, who is owned by Wal-Mart, has seen sales fall for the first time in four years and as such bought the UK arm of Netto for £778 million. The company will see an additional 193 stores added to its number, all of which will be renamed as Asda stores.

With the sales of its stores, all of which will be renamed under the Asda brand, Netto is planning to expand its stores and brand recognition to the likes of Germany, Poland and Sweden.

The news was revealed by German weekly food sector publication Lebensmittel Zeitung, which also added that the group is planning to launch 20-25 stores per year with the money raised from the sale of its UK outlets to Asda.

Speaking of the expansion, Netto International managing director Claus Juel-Jensen spoke to Just-Food.com to explain the company's planned expansion.

Juel-Jensen said while it was "hard to say" how many stores would open overall, the growth in the organization would make it easier to deal with the expansion.

He also added that the money offered for the stores was an offer that Netto "could not refuse".

Five year plan

Currently, Netto is working to a five-year plan and in Juel-Jensen's words, the company "is looking to acquisitions and other options to help it aid faster expansion." The aim of the five-year plan is to make Netto "secure its position as the number two in food and leader in non-food sales, with plans to accelerate openings of smaller stores and launch more Living general merchandise outlets".

Juel-Jensen added that it was "difficult to say how long this will take as we need good, solid stores to buy" and that Netto had no plans to focus on one of the three European countries, but that "expansion would be easier in Sweden than Germany".

The company famously withdrew from Ukraine in 2009.

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