1. ITV Report

Budget supermarket chain Netto to close down in the UK

Netto will close down 16 of its UK stores in August. Credit: PA Wire

Budget supermarket chain Netto is close down in the UK.

Netto UK, a joint venture between Sainsbury's and Denmark's largest retailer Dansk Supermarked, said it will close its 16 UK-based stores in August, a move that is expected to put hundreds of jobs at risk.

Both companies said they reached the decision based on a number of factors, including trading data, expansions costs and the changing food retail market.

A spokesperson for Sainsbury's denied that the closure was linked to Britain's recent vote to leave the EU.

Mike Coupe, Chief Executive of Sainsbury's, said: "To be successful over the long term, Netto would need to grow at pace and scale, requiring significant investment and the rapid expansion of the store estate in a challenging property market.

"Consequently, we have made the difficult decision not to pursue the opportunity further and instead focus on our core business and on the opportunities we will have following our proposed acquisition of Home Retail Group."

Netto was relaunched in the UK in 2014 as part of the joint venture with Sainsbury's, after initially departing in 2010.