Joint venture pays way to savings for shoppers - Palmers Solicitors

Joint venture pays way to savings for shoppers

Shoppers could soon be reaping the benefits of a new joint venture between supermarket giant Sainsbury’s and Danish discount grocery retailer Netto.

The companies announced on 20 June that they are to trial a new format which they described as “bringing a fresh Scandinavian flavour to the UK discount sector”.

The trial will consist of 15 Netto stores to be opened by the end of 2015, with the first up and running in the north of England later this year. If the trial proves successful, the new format will be rolled out across the country.

The joint venture partners – who are each investing £12.5 million in the project – said the new Netto stores would be “a complete departure” from the format that left the UK market in 2010. They will feature in-house bakeries offering Danish breads and pastries and weekly and seasonal “when it’s gone, it’s gone” offers in food and non-food ranges.

Per Bank, CEO of Netto’s parent company Dansk Supermarked, said: “It’s great to be bringing a new twist to the rapidly-growing UK discount sector. We’ll offer market-leading value to customers with the freshness and innovation that customers rightly associate with Denmark.

“The discounter experience, operating model and systems of the Dansk Supermarked group, combined with Sainsbury’s UK market insight, property expertise and logistics excellence will help deliver a discounter format we think UK customers will love.”

Mike Coupe, CEO designate of Sainsbury’s said: “This joint venture provides a great opportunity for us to gain exposure to the high growth discount market for the first time in partnership with Dansk Supermarked, whose expertise and values are a strong complement to our own. If successful, this trial has the potential to open up a new long-term growth opportunity for us.”

While the Netto and Sainsbury’s joint venture is a substantial one, the structure can also form a useful business model for more modest business projects.

As part of our broader company law services, Palmers can provide expert, commercially minded legal advice on all aspects of putting in place joint venture agreements, whether for a single project or on an ongoing basis, to underpin the way that parties work together and help them gain maximum benefit from sharing expertise and risk. For more information, please contact BJ Chong .