Sainsbury's exits Netto supermarket venture

Sainsbury’s has pulled the plug on its cut-price convenience stores venture Netto, saying it will close all 16 stores next month and take a £30 million hit on the experiment.

The closure, which will threaten 400 jobs, is the latest blow to the High Street which has seen thousands of jobs endangered at BHS, Austin Reed and My Local.

Netto was relaunched by Sainsbury’s and Dansk Supermarkets two years ago after it had quit the UK in 2010 and sold its stores to Asda.

Mike Coupe, chief executive of Sainsbury’s, said: “To be successful over the long term, Netto would need to grow at pace and scale, requiring significant investment.”

He added the recent £1.4 billion takeover of Argos was going to take additional management focus.

Sainsbury’s said the carrying value of Netto in its accounts was £20 million and it expects to spend a further £10 million winding it down.