Haldanes is launching a new discount supermarket chain called Ugo.

The retailer, formed last year after buying a number of former Somerfield stores from The Co-operative Group, is launching the chain after acquiring 20 Netto stores from Asda.

Ugo will have a yellow and black fascia like Netto, with the strapline 'where the prices are low'.

Arthur Harris, who this week moved from chairman of the group to CEO, said the new chain would be built on the strengths of Netto, "but will have a stronger and broader core grocery range together with a much wider health and beauty offer".

The stores are predominately situated along the M62 corridor, from Hull to Liverpool, and also in Greater Manchester, West Yorkshire and Nuneaton.

Haldanes opened its first store in November 2009 and rapidly expanded to 25 stores. However, it claimed to have inherited falling sales at the stores it bought from the Co-op Group and was forced to close two stores in the summer. It has remained relatively quiet since then.

Harris said there were no plans to scrap Haldanes, but one store, in Biddulph, Stoke-on-Trent, would be trialled as a Ugo and refitted next month.

He added that Haldanes would also move into the convenience sector for the first time. It has acquired a forecourt and a convenience store that will both trade under the new fascia Haldanes Xpress. The company is in advanced discussions to acquire a further eight c-stores.

"We're really excited by the opportunity and have done a lot of work on it," he added.

The Office of Fair Trading forced Asda to sell 47 Netto stores in order to complete the £778m deal, announced in May last year. As well as Haldanes' purchase of 20 stores, this week Morrisons revealed it had acquired 16 for £28.1m.

"These additional stores are an important next step in Morrisons' growth," said CEO Dalton Philips. "We are building on our strategy to bring Morrisons' unique ­offer of freshly prepared, ­affordable food to more people in Britain."

Iceland acquired three stores, while the remaining sites are still to be sold.