The £25 million (30 million euros, £33 million) venture was launched in 2014 in a market where Sainsbury's continues to face fierce competition from rapidly expanding German discounters Lidl and Aldi.
"The scale of the business has been a challenge due to the limited availability of suitable store locations, and therefore we have together with Sainsbury's decided to end our joint venture," Per Bank, chief executive of Netto owner Dansk Supermarked, said in a statement.
Closing Netto's 16 British stores would result in £20 million (24 million euros, $27 million) in write-offs for Sainsbury's and around £10 million in cash costs for winding down the business, the British company said.
The stores would close in August.
"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," Sainsbury's chief executive Mike Coupe said in a statement.
The company would now focus on its core business and on its £1.4 billion March takeover of Home Retail Group, owner of catalogue chain Argos, it said.
Netto pulled out of Britain once before, in 2010, when it sold 193 stores to Wal-Mart division Asda after operating there for 20 years. The Danish chain currently has 1,336 stores, out of which 459 are in Denmark and the rest in Germany, Poland, Sweden and Britain.
One of Britains "big four" supermarket chains, Sainsbury's currently operates 1,375 stores.
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
