Dansk Supermarked’s discounter Netto is to introduce a new fresh-focussed store concept in Sweden. Swedish retail magazine Market reported that the Danish retailer is to offer 100 additional fruit & vegetable items; a wider meat selection; and increased chilled and frozen departments – all at the expense of a reduced promotional area. According to the interim country director, Jan Richter, Swedish shoppers find the temporary promotions section too confusing. The changes will be implemented in two pilot stores which will open in the next couple of weeks.
With this move, Netto aims to duplicate its competitor Lidl’s recent ability to reach a wider audience than in the past. Given Dansk Supermarked’s goal to double the turnover of its international store network, this trial is also surely part of a wider plan. With an ambitious store opening agenda of 15 new outlets per year in Sweden, Netto needs these new stores to live up to the standards set by Lidl in the country.
Interestingly, while Netto is reducing the promotional areas in Sweden, it is expanding them in Germany and Poland. This highlights one of its main strengths, which is its ability to customise its operations in each market. This is not to say that temporary promotions cannot be successful in Sweden; rather that they need to be structured and follow a seasonal pattern – which is another lesson Netto could learn from Lidl.
A wide fresh assortment is imperative if Netto wants to benefit from the changing shopping behaviour among Swedish shoppers, who are currently favouring the discount channel. Lidl – with its wider sales areas – has the edge over Netto in that department. Netto meanwhile could leverage its proximity advantage to offer more ready meals and expand other typical convenience categories in the future.