Netto UK MD Richard Lancaster has resigned as the discounter announced job losses and scaled back its expansion plans.

The company is to make up to 12 staff redundant in its property and distribution departments, and its plans to build a £25m distribution centre near Manchester next year have been shelved indefinitely. Netto has also scaled back its store opening plans from 31 at the end of 2009 to about 23.

A spokeswoman for the Danish discounter claimed it was a coincidence that Lancaster’s departure had been announced at the same time as the cut-backs.

In a statement Lancaster said: “I have thoroughly enjoyed my time at Netto and would like to thank the entire team for their hard work and commitment that was so fundamental to our progress over my near two-year tenure.

“I am not in a position to disclose which business I will be joining at this stage but I am looking forward to a new challenge.”

TNS figures show that the economic downturn has helped discounters Aldi and Lidl over recent months, recording double-digit sales growth. But the figures show Netto’s sales being in only modest growth and in some months were in decline.

One industry insider said Netto was too focused on the lower end of the demographic scale, while other discounters were appealing to a broader range of shoppers.

However, Lancaster is credited with helping to turn the discounter around since he took over in 2006, after its operating profit tumbled from £8m to £3.2m. In 2007 profi ts were back up to £9.3m.

“I am sorry to see Richard leave but understand his reasons for moving on,” said Claus Juel-Jensen, chairman of Netto International. “I wish him success in his new role and would like to thank him for his significant contribution over the past two years.”

Netto property director William Smith will assume the position of interim MD until Lancaster’s successor is appointed.