Sainsbury’s has named its first two Netto locations. They will be in Moortown, Leeds, and Heaton Park in Manchester.
The two shops will open by the end of this year and both will be around 10,000 sq ft. Heaton Park will be a co-location at the existing 100,000 sq ft Sainsbury’s store.
Sainsbury’s struck a deal with Netto last month to bring the Danish discount format back to the UK. The partnership will open 15 Netto stores by the end of next year in a bid to take on discount leaders Aldi and Lidl.
Grocery blogger Steve Dresser, who revealed the two locations, said: “The initial stores will be of varying locations to allow them to ascertain what works.
“Moortown is an affluent area and home to one of the most expensive housing areas in the city, so it looks a curious choice.
“However shopping at Aldi can be a badge of honour even for this sort of customer. Discounters don’t have a stigma any longer, so it could work well assuming Netto is able to overcome the brand equity issues after their first stint in the UK.
“Heaton Park is a huge store - likely too big, given how the market has moved. Co-locating a food discount store in the main store appears risky.
“However faced with losing basket to Aldi, Sainsbury’s would rather ‘lose’ it to Netto and keep 50% of the spend as a result of the joint venture.”
The partnership will see Netto return to the UK after exiting in 2010 after selling its stores to Asda. Sainsbury’s boss Mike Coupe said the business will be a separate entity to Sainsbury’s, but will give the grocer exposure to the discount sector - one of the few fast growing areas of grocery at present. Netto will return with a revamped discount format with a focus on fresh.