UK retailer Sainsbury's and Dansk Supermarked have announced the termination of their joint venture, which has seen 16 Netto test stores open across the UK since 2014.
The stores are expected to close next month.
Netto UK was launched by Sainsbury's and Dansk Supermarked in 2014, to test the viability of a new discount chain entering the British market.
Per Bank, managing director of Dansk Supermarked, said in a statement that while the group is "pleased with the performance of the stores to date, it has become clear to both partners that the business requires greater scale over a short period of time to achieve long-term success.
"Reaching scale has been challenging due to appropriate site availability and therefore we decided together to end the joint venture and focus on other opportunities within our respective businesses."
Sainsbury's chief executive Mike Coupe added, "'Netto is an excellent retailer with talented leaders and colleagues and we have learnt a great deal about the discount grocery retail market from this trial venture. Since we first envisaged the trial, almost three years ago, the grocery sector has evolved significantly and we launched our strategy 18 months ago to address these changing dynamics."
Dansk Supemarked operates more than 1,300 Netto stores in markets including Denmark, Germany, Poland, the UK and Sweden.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.