Asda has announced is to takeover the UK arm of Danish discount retailer Netto as it looks to expand its small store portfolio.
The UK’s second largest supermarket chain said on Friday that it hoped to finalise a £778 million deal to buy all 193 Netto stores in the UK later in the summer, subject to approval from the Office of Fair Trading .
The small grocery outlets will continue to trade under the Netto name until summer 2011, when they will then be converted to the Asda brand.
Asda said it plans to integrate the Netto stores into its new supermarket division for shops that are smaller than 25,000 square feet. The average size of a Netto outlet is 8,000 square feet – less than one-fifth of the size of an average Asda store .
Commenting on the move, Asda’s newly-appointed president and chief executive Andy Clarke said: “We very much look forward to welcoming Netto’s colleagues into our business and joining our team.”
“Customers will benefit from low prices on a significantly broader range of quality products, complemented by the wide range of services we offer in all our smaller stores.”
Netto, which is currently owned by Danish group Dansk Supermarked, has been operating in Britain since 1990. The food chain won ‘Discounter of the Year’ award in 2009 and currently holds a 0.7 per cent share of the UK grocery sector, according to latest market figures.
Claus Juel-Jensen, managing director of Netto, said in a statement: “We have substantial opportunities for growth in Scandinavia and northern Europe and believe that the time has come to focus our efforts on the development of our business in these countries.”
He added: “As a major league player, Asda is the ideal purchaser of our UK business.”
