The cheapest supermarket in the UK has been given the green light by the Office of Fair Trading to purchase the low-price discount supermarket, Netto’s.
Netto’s, which is currently owned by the Danish group, Dansk will sell its stake over to ASDA, but under the regulation, ASDA must sell 47 of the existing 195 Netto stores in the UK. Netto’s certainly struggles to attract a decent reputation, especially against its rivals in the low-cost supermarket industry, such as LDL and ALDI. Also, with the emergence of the Poundland and £Stretcher stores, Netto’s has gradually slipped down the order in recent years. However, this news can only be seen as good news for the company, as it not only secures their long-term future, but they are now in the hands of a well-respected and a national leader in the supermarket industry.
ASDA has said that customers will expect to see a wider range of products for customers due to the impending takeover, which is set to create over 1,000 new jobs in England and Wales. ASDA has also confirmed that it in talks with several potential buyers over the selling structure of the 47 stores it must get rid as part of the deal. All Netto supermarkets that remain after the cutbacks will be renamed ASDA with the completion of all activities expected to be in the summer of 2011.
The chief financial officer of ASDA, Judith McKenna was delighted with the commitment and the decision that the Office of Fair Trading had made:
"We’ve already learned so much from Netto colleagues and I appreciate their hard work and commitment. "I’m looking forward to continuing to work together to ensure we make the transition to ASDA a success and putting into practice what we’ve learned. "I continue to be excited at what we can achieve together."
Although on a financial basis, ASDA is having its worst economic year since 2006, slipping 0.6% on its expected profits from 2009, this news can only been seen as a winning move for all beneficial parties. There will be more exposure for ASDA, a secure future for Netto’s and the public sector, as more jobs are set to become available in these tough climates.
