“Our job is to be close to customers in the UK. We’re not experts in running low-cost sites, we’re not experts in running limited ranges – that’s their core expertise,” King told FoodManufacture.co.uk at the Consumer Goods Forum 2014 in Paris. “If you look at Netto stores in Denmark, it’s a different kind of proposition.”
In addition to its strength in discount formats and cut-price ranges, Netto offered the organisational abilities and functions to execute them effectively, King said. “They bring their supply chain, system and operational skills to the UK.”
He also pointed to the fact that Netto had prior knowledge of UK retailing, having only exited the market in 2010 after Asda bought its UK store estate.
‘Radical change’
In an earlier presentation, King stressed the impact of the recession on UK consumers had led to a lasting change. “There has been a radical change in the shopper in terms of household budget from the first quarter of 2010.
“Overnight, the weekly grocery shopping basket in the UK was one item fewer and it stuck. The consumer started spending money in a different way and our view is this is a permanent state of affairs.”
That was why it was vital to meet the needs of increasingly frugal shoppers and why Sainsbury and Netto had announced their joint venture earlier today (June 20), he said.