World Retail Congress 2010
The major supermarkets in the UK fought very effectively against the competition posed by the discount food retailers and this ultimately contributed to Netto selling out to Wal-Mart earlier this year. By Glynn Davis in Berlin
Claus Juel-Jensen, managing director of Netto International, told delegates at the World Retail Congress in Germany that although Wal-Mart made an “extremely good offer” for the business that was hard to turn down he admitted that Netto had suffered from the aggressive competition it had faced from the major UK grocery chains.
“The UK market is not like the Continental market as the chains have been more effective at fighting the discounters. In the UK they fought us from day one,” he revealed. The major grocers’ fight has been especially effective at giving consumers the impression that the discounters’ products are of a lesser quality.
“The UK keeps fighting for the illusion of a difference in the quality of the quality of the products. They’ve big marketing budgets for this,” suggests Juel-Jensen. This has been a major contributory factor to why the food discounters in the UK have the lowest market share of anywhere in the world with only 3.4% compared with 33% in Germany and 28% in the US.
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