Sainsbury’s pulls plug on its chain of Netto stores

SaInSBurY’S has killed off the netto chain it had hoped would take on the German budget grocers aldi and lidl.

The company started opening netto stores two years ago in partnership with the Danish grocer behind the chain, Dansk Supermarked Group.

The idea was to win back middle income shoppers who had switched to aldi and lidl. But Sainsbury’s bosses have decided to change their focus to the purchase of the Home retail Group, which owns argos, and a new business that will rival amazon.

as a result, the company has abandoned the netto project and will close the 16 convenience stores in the chain next month.

This will be the second time that netto has come and gone from the high street. The company operated in the uK from 1990 to 2010, building a network of 193 stores in less affluent areas.

netto then sold its British stores to asda in 2010 in a deal worth £778million. The second incarnation lasted just two years.

The decision clears the way for aldi and lidl to continue their rapid growth, with each chain opening a new store a week.

Sainsbury’s chief executive Mike coupe said the company did not have the time and resources to make netto a serious rival to the Germans.

He added: ‘To be successful over the long term, netto would need to grow at pace and scale, requiring significant investment and the rapid expansion of the store estate in a challenging property market.’