Morrisons to buy 16 Netto stores from Asda

12th Jan 2011 16:14

Supermarket chain Morrisons is planning to buy 16 Netto stores from the Danish discount supermarket's owner Asda as it seeks to catch up with larger rivals.The stores, which are costing Morrisons £28.1m, are mostly in its northern English heartland. The purchase depends on Asda's acquisition of Netto being approved by the Office of Fair Trading (OFT).Asda, which until recently was Britain's number two supermarket, is divesting some of the Netto stores to meet the OFT's concerns over competition.Asda's share of Britain's supermarket trade fell to 16.5% from 16.7% in the four weeks to Boxing Day, according to figures from the retail analyst Kantar, while J Sainsbury's climbed to 16.6% from 16.3%. Tesco occupies the number one spot, with Morrisons in fourth place. The Netto acquisition will lift Asda back to the number two spot.Morrisons, which currently has 437 stores, said the handover of the stores is expected to take place in March, with their conversion into the Morrisons format taking three months."These additional stores are an important next step in Morrisons' growth," said chief executive Dalton Philips. "We are building on our strategy to bring Morrisons' unique offer of freshly prepared, affordable food to more people in Britain."Morrisons recently announced plans to create 6,000 jobs this year. It has kept its forecasts for the full-year unchanged after growing like for like sales excluding petrol and VAT by a better than expected 1% in the six weeks to January 2.In his first Christmas as chief executive, Philips reported total sales excluding fuel and VAt rose 3.1%, or 4.7% including fuel, while like for like sales were up 4% when fuel is included.