Sainsbury and Netto to tackle discounters

Sainsbury, the British supermarket chain known for its relatively upmarket image, is to enter the fast-growing hard discount sector, through a joint venture with Netto, the Danish supermarket chain.

The trial will see 15 Netto supermarkets opened by the end of 2015, with the first to open in the north of England later this year.

Netto, run by former Tesco executive Per Bank, previously operated in the UK, but the British arm was acquired by Asda in 2010 for £778 million and the stores have been converted into Asda branches.

The move underlines the increasing threat of the German discounters Aldi and Lidl in the UK. They have consistently been among Britain's fastest-growing supermarkets, and have been winning more affluent customers. - Copyright The Financial Times Limited 2014