The chief executive of Netto International, Michael Løve, has told ESM that last week’s bid by Coop Sweden to take over its Swedish operations “was an offer we didn’t see coming”.
In one of his first interviews since the deal was announced last Friday, Løve said that the bid came at an opportune time for Netto, which is in the process of rolling out its ‘Netto 3.0’ store concept in the markets in which it has a presence.
Speaking to ESM on the sidelines of the World Retail Congress in Amsterdam, Løve admitted that the offer "came out of the blue, and it's enabled us to focus our investments more”.
Sweden Performance
In Netto parent Sailling Group’s full-year results, also released last Friday, the Danish retailer said that the performance of its Swedish operations ‘disappointed’ last year, with Løve telling ESM that the business has “struggled a bit in terms of getting a good solid foothold” among consumers.
“Over time, we have not made a lot of money [in Sweden],” he explained, “but we had every confidence we could turn it around. We also knew, however, that it was going to be a long journey.”
Løve believes that while Sweden is tailor-made for a good discount operator – Netto entered the market in 2002 – consumer shopping habits differ from the group’s other markets of Denmark, Germany and Poland.
“The way [consumers] shop in Sweden is how we used to shop in Denmark,” he said. “They tend to do a big purchase for the week, so they are looking for everything in one place. For discounters, that’s a challenge.”
Market Value
The deal, announced last Friday, will see all 163 Netto stores converted to Coop outlets after a transitional period, as well as the transfer of some 2,000 employees.
The transaction is expected to be completed in the summer of this year, and is subject to approval from Swedish competition authorities. Following the completion of the deal, Netto International will operate stores in Germany, Poland and its native Denmark.
The full interview with Michael Løve can be found in the next edition of ESM.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
