Why did asda buy netto

L , which account for over two-thirds of grocery sales, fight to reach new customers with smaller format shops. It also underscores the failure of limited-range discounters like Netto to make big inroads in Britain, where the top four groups are adding more products and services to their customer offer.

However, analysts said Wal-Mart was paying a full price to Netto owner Dansk Supermarked, which said it would now focus on growing the chain in Scandinavia and Northern Europe. CO , which owns a majority of Dansk Supermarked, were up 4. It bought Asda, which grew strongly in the recession but has recently lost ground to rivals, in The ultra low-cost retailer opened its first UK store in August and already has another three in the pipeline.

Site powered by Webvision Cloud. Skip to main content Skip to navigation. Most Netto stores in the UK were sold to Asda. A former Netto in Sheffield became a trial format store for Asda. Topics Asda Discounters Supermarkets. Recommended for you.

Sign in to comment on this article Not logged in before? Register for FREE guest access today. It included overtaking Tesco to become Britain's biggest non-food retailer and opening small supermarkets.

The grocer had previously stuck to opening superstores of up to 8, sq metres because they are more profitable than small outlets. But Asda has now conceded that it will have to open smaller shops to make any headway. Philip Dorgan, an analyst at the broker Ambrian, said the Netto deal showed that Asda might be ready to buy market share in the home and fashion sectors too.

He said the move was "likely to increase speculation that it could do the same in non- food" and said that could be good news for shareholders in Home Retail group — owners of Argos and Homebase. Asda expects to finalise the transaction after approval from the OFT this summer and then plans to refurbish the Netto outlets and change the fascia to Asda. The deal will face opposition. James Lowman, chief executive of the Association of Convenience Stores, which represents 33, small independent retailers, said: "The UK already has one of the most concentrated grocery markets in the world with four companies controlling three-quarters of the market.

That leads to serious concerns about consumer choice.