Discount supermarket chain Rema 1000 announces 130 new stores

Norwegian chain steps up its offensive on Netto’s domination of the Danish discount grocery market

The Norwegian discount supermarket chain Rema 1000 is stepping up the competition with its main rival Netto by announcing that it will open 130 new stores in the coming years, Børsen reports.

READ MORE: Rema 1000 Denmark tops 10 billion kroner turnover in 2014

Raising the bar
Rema 1000 opened a new supermarket in Aalborg last week – bringing its total number of locations in Denmark up to 272. Netto has 460 locations, but Henrik Burkal, the head of Rema 1000 in Denmark, announced yesterday that his company plans to close the gap.

“We have raised the bar for the number of Rema 1000 shops there is room for in Denmark. We said 300 before, now we’re saying at least 400,” he said.

Last year Rema 1000 opened 11 new stores, but Burkal said that the goal is to up the rate of openings significantly.

“The goal is 15-25 shops per year. We have previously said up to 20 shops, but we would like to increase that figure,” he said.

According to Retail Institute Scandinavia, an industry consultancy and knowledge centre, Rema 1000 has 23 percent of the Danish discount grocery market, while Netto sits on 36 percent.

Competition for addresses
Netto has a different strategy for its network of supermarkets, planning to open ten more a year and focussing on renovating and upgrading existing locations.

Henning Bahr, a retail expert at Retail Institute Scandinavia, sees Rema 1000’s franchise model, which motivates the franchisees to make each store a success, and the company’s focus on organic products and reducing food waste as a successful formula. However, he anticipates that Burkal will encounter competition in securing the best addresses for the new stores.

“If he wants 400 stores, he can get them. But he will find that colleagues will want growth in exactly the same locations,” he said.