NETTO

Most Netto stores in the UK were sold to Asda

Netto, which announced a new partnership with Sainsbury’s today, exited the UK in May 2010 when it was bought by Asda in a deal worth £778m.

The discounter had 193 stores at the time of the surprise purchase, averaging around 8,000 sq ft each.

The deal was investigated by the Office of Fair Trading, and in September that year, the now defunct watchdog said Asda had to sell 47 of the stores to resolve competition concerns in local markets.

But what happened to those 47 stores?

Haldanes took on the most number of stores. Despite being in operation for little over a year and amid concerns over its trading, the fledgling supermarket chain snapped up 20 Netto stores in January 2011 to create a new discount chain called Ugo Stores.

Ugo was up and running by May 2011, but it was shortlived. Haldanes fell into administration in June 2011 with debts of £8.6m, and Ugo followed in February 2012 when it was bought out of administration by Poundstretcher in a pre-pack deal.

Morrisons also took on a large number of stores. It bought up 16 for £28.1m in January 2011 and a further two four months later for an undisclosed sum.

The stores’ makeover to the Morrisons format was rapid. In fact, Morrisons beat Asda in the race to open former Nettos, with the first three rebranded stores re-opening in May.

Six stores were bought by Iceland (in January 2011) and The Co-operative Group (in July 2011), who bought three each for an undisclosed sum.

Among the trio bought by The Co-op was the most controversial Netto store in the Asda sell-off – in Birtley, Durham.

The store was a key talking point in the OFT’s consultation. The majority of responses received in that consultation had related to the Birtley store, with respondents expressing concern Asda would be unable to find a buyer and that competition would not be reduced if Asda kept the store. The OFT also received a 600-signature petition asking it to overturn its decision and allow Asda to keep the site.

Asda’s Nettos

Asda, meanwhile, has rebranded its Netto stores as Asda Supermarket and has been looking at how it can make the most of these smaller stores. In November last year it used a 4,000 sq ft former Netto in Sheffield to trial a high-street format store with click & collect storage, improved hot food to go and bakery.

ASDA SUPERMARKET

A former Netto in Sheffield became a trial format store for Asda

The trial was a success and Asda CEO Andy Clarke declared last month: “You will start to see smaller Asda supermarkets from 3,000 sq ft upwards on the high street and we are looking at getting one into central London.”

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