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Netto targets British shoppers

The Danish discount supermarket chain joins forces with Sainsbury's in an attempt to woo British bargain hunters.

Netto targets British shoppers
Photo: Thomas Kohler/Flickr
British supermarket chain Sainsbury's is teaming up with Denmark's Netto to compete in Britain with "hard discount" retailers currently gaining market share, the companies said on Friday.
 
Each partner would invest 117 million kroner (£12.5 million, 15.6 million euros, $21.3 million) in the joint venture that will open 15 Netto stores in northern England by the end of next year.
 
Low prices will combined with "the freshness and innovation that customers rightly associate with Denmark," Per Bank, the chief executive of Netto's parent company Dansk Supermarked, said in a statement.
 
Netto operates 1,200 stores, out of which 430 are in Denmark and the rest in Germany, Poland and Sweden.
 
The chain pulled out of Britain in 2010 after operating there for 20 years when it sold its 193 stores to Wal-Mart division Asda.
 
"The new Netto stores represent a complete departure from the format that left the British market in 2010," Sainsbury's said in a statement. "They will … feature a great fresh food offer as well as an in-house bakery."
 
If the trial is successful, the new budget chain will be rolled out across the country.
 
They said the start-up costs for the initial trial would result in a 47-94 million kroner (£5-10 million) post-tax loss for each partner by the end of March.
 
Britain's biggest retailer, Tesco, earlier this month suffered its largest quarterly sales drop in four decades. The world's third biggest supermarket group is facing fierce competition from German-owned discounters Lidl and Aldi, as well as from traditional supermarket rivals.
 
Sainsbury's, which posted a 19 percent rise in profit after tax in the year ending March, said the British discount sector is worth £10 billion in annual sales and that the figure is forecast to double in five years.

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SHOPPING

Record retail sales in Denmark after post-lockdown ‘ketchup effect’

Sales of shoes and clothes Denmark leapt by close to 100 percent in May in what the Danish Chamber of Commerce is describing as a post-coronavirus "ketchup effect".

Record retail sales in Denmark after post-lockdown 'ketchup effect'
Danes have been buying shoes like they're going out of fashion (which these Moshi Moshi shoes from 2008 clearly are). Photo: Jan Jørgensen/Ritzau Scanpix
According to Statistics Denmark, retail sales overall rose 9.4 percent in the month after shopping malls were reopened, hitting a new record after the largest month-on-month increase since it first started reporting retail statistics at the start of the year 2000. 
 
“This is of course positive and clearly shows that the Danes have had the courage to increase consumption as the reopening takes place,” said Tore Stramer, chief economist at the chamber, in a press statement
 
“However, it must be borne in mind that there has been a saving in consumption that has been let loose in May. So we are also seeing a ketchup effect in consumption.” 
 
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Denmark's government shut down all shopping malls in the country in mid-March, with most high street shops also closing their doors until the restrictions were relaxed on May 11. 
 
 
The surge in sales will make up for some of the financial hit taken by Danish retailers during the lockdown, indicating that profits for the year might be less affected than feared. 
 
But Stramer warned that higher unemployment and a fall in Danish exports would continue to drag on Denmark's economy over the rest of the year, meaning May's bumper sales were unlikely to continue. 
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