UK supermarket chain Sainsbury’s will be closing its Netto stores after abandoning the joint venture deal with Danish retailer Dansk Supermarked Group (DSG).
As part of the move, the 16 Netto stores will close in August, putting around 400 jobs at risk.
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Sainsbury’s and its joint venture partner jointly stated that the two-year trial was ended because Netto required expansion and investment.
The establishment of the joint venture was an attempt to challenge rival discount supermarkets such as Aldi and Lidl.
Sainsbury’s chief executive Mike Coupe was quoted by BBC as saying: "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.
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"Consequently, we have made the difficult decision not to pursue the opportunity further and instead focus on our core business and on the opportunities we will have following our proposed acquisition of Home Retail Group."
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By GlobalDataNetto initially had 200 stores across UK, but in 2010, all Netto stores were shut after it was taken over by Asda.
In 2014, Sainsbury’s entered a joint venture with DSG to reintroduce Netto in the UK.
