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Germany: Netto Nord 10% sales growth with 342 stores creating a good customer atmosphere

Updated: Aug 31, 2022

Discount Retail Chain Netto Nord Germany (owned by the Danish Salling Group) has a store network of 342 locations developed during its 30 years presence in Germany. The Corona Pandemie gave Netto Nord a large sales boost after years of stagnation. The growth was approximately 10 percent, which makes sales of approximately 1.25 billion euros (US$ 1.29bn). In 2021, sales could be easily improved with approx. 1 percent plus. Netto is a subsidiary of the Danish Salling Group with around 6,000 employees in Germany. According to the company, 65 people are employed in the administration in Stavenhagen, around 200 in logistics.

For 2022, it is almost impossible to give a more precise sales forecast in terms of all trading companies. The Ukraine War, Delivery problems for raw materials, increased food prices and high inflation quotas, cause precise statements to the current financial year 2022.

The price sensitivity of customers continues to grow...

In addition, there is the effect that customers have generally become more price-sensitive, which Netto Nord can also observe in its stores. Customers are more important than ever. It is all the more important to keep an eye on your regional suppliers for net, as this area is very important for net. Here it is important to avoid delivery bottlenecks as best as possible. Despite unsafe sales forecasts, Netto wants to expand its store network. Three new locations are currently planned, so that the total number increases to 345 stores.

Not all stores have changed to the Netto 3.0 concept. Around 200 stores are currently converted. The new market concept goes in the direction of better look for the customer, in the middle of Scandinavian aesthetics. The customer is to be presented with a new shopping experience and together with a design concept based on the Danish roots of the food discounter. So far, Netto has had additional sales after the retrofits and is satisfied with the success. The company also wants to improve the range policy. This means that ranges should be better and more specifically optimized in the city and country branches.

The Danish sister company is also a role model for Germany

The Danish sister company, which has already implemented this policy in a 250 sqm market, could be a model. Here, even in smaller areas, the non-food range should be kept as low as possible, since the space for it is not available in small shops. Netto also wants to control its central transactions from Berlin after the summer. For this purpose, the administrative areas that are currently located in offices in Stavenhagen and in the Brandenburg Wustermark would move to Berlin. For this purpose, HQ office space on the techno campus in Berlin-Charlottenburg had already been rented. The move should be completed by around the end of 2023. So far, Netto has been the only retail chain that is located in the former eastern German state.

The company's administrative areas have so far been distributed to the two warehouse locations in Wustermark in Brandenburg and Stavenhagen in Mecklenburg. The DCs there remain. In Wustermark, the storage area is to be expanded in order to supply more stores. The warehouse in Stavenhagen remains.

Netto is making good progress in the north of Germany, it remains to be seen whether the Danish discounter will eventually start expanding in the whole of Germany.

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