Danish budget supermarket Netto are expanding their bid on the Swedish market and are set to double the number of Swedish stores over the next ten years.
“We have a very aggressive investment plan in Sweden, where we see great potential,” Bent Holm, Managing Director of Netto in Sweden, told Jyllands-Posten.
“Next year we will open 10 new stores, and then the goal is 15 new stores per year. I see no obstacles to Netto Sweden reaching the same size as it is in Denmark, “ he added.
Netto – owned by Dansk Supermarket Group – currently have 157 Swedish stores but are now looking to accelerate growth. Established in Sweden in 2002, the discount chain had initially suffered profit deficits until 2014, with the exception of just one year.
But 2015 marked a significant turnaround for the business when Netto Sweden’s profits rose steeply to around 82 million Danish kroner, with a turnover of 3.8 billion kroner.
Now with a firm foothold in Sweden, the hope is to hijack the Swedish discount market away from its core competitor, the ICA group, who presently control over half the market share. Although sales from discount stores only cover 6.7% of overall supermarket sales in Sweden – in comparison to 40% in Denmark – Bent Holm believes the market is now primed for a budget supermarket.
“Discount is relatively new in the country, but now the Swedes are getting used to the concept,” he asserted.
This new roll-out is expected to be costly, with the total investment from Dansk Supermarket reaching the billions over the next 5-6 years.