About Seaway Food Town, Inc.

In the grocery and distribution wars, SpartanNash is up for the fight. The grocery retailer and wholesaler operates 157 supermarkets under the Family Fare Supermarkets, D&W Fresh Market, VG's Food and Pharmacy, Sun Mart, and more than a dozen other banners. Besides selling national brand-goods, stores offer private-label items under the Spartan, TopCare, Valu Time, and Full Circle names. SpartanNash is also a leading grocery wholesaler, distributing over 7,100 private brand items to 2,100 independent supermarkets in Michigan, Indiana, and Ohio. It is also a leading grocery distributor for the US military. Founded in 1917 as a cooperative grocery distributor, Spartan Stores came into its current being after it acquired Nash-Finch in 2013.

Operations

SpartanNash operates three main business segments: Food, Military, and Retail.

Food Distribution, which makes up some 45% of the company's total revenue, comprises 11 distribution centers that ship 60,000 stock-keeping units of food, general merchandise, floral, pharmacy, and health and beauty care products.

Living up to its namesake warrior city, SpartanNash's Military segment (nearly 30% of revenue) contracts with manufacturers to distribute grocery products to US military commissaries and exchanges. The company is the largest distributor to such US military properties.

Its Retail division (nearly 30% of revenue) sells items from its some 160 company-owned retail stores operating under more than 15 banners (including Family Fare Supermarkets, No Frills, Bag 'N Save, Family Fresh Markets, D&W Fresh Markets, Sun Mart and Econo Foods). It also runs 30 gas stations and 90 in-store pharmacies.

By product, SpartanNash generates over 60% of its revenue from non-perishable items, while around 30% comes from the sale and distribution of perishable items. About 6% of revenue comes from fuel and pharmacy sales.

Geographic Reach

Grand Rapids, Michigan-based SpartanNash owns more than 160 stores in 10 states, and distributes to 2,100 independent grocers across 47 US states. Its military operations serve commissaries and exchanges in 37 US states, the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain, and Egypt.

Sales and Marketing

SpartanNash's largest Food Distribution customer is Dollar General. The company sells to more than 13,000 Dollar General retail locations yearly, accounting for about 11% of SpartanNash's consolidated net sales.

Financial Performance

In 2016 SpartanNash's revenue recovered by 1% to $7.7 billion following a 3% fall the previous year. Gains came from new and existing customers in the Food Distribution (4.5% growth) and Military (0.5% growth) segments. Food and Military growth offset the negative impact of food deflation across the board, as well as lower comparable retail store sales and the closure of retail stores. Retail revenue fell 3%.

Net income fell 10% to $56.8 million as food price deflation ate into margins. Cash from operating activities also fell, by 30% to $154.5 million.

Strategy

Through SpartanNash's neighborhood market strategy, the company endeavors to distinguish itself from other food retailers, such as supercenters and limited-assortment stores, by emphasizing convenient locations and offering demographically targeted merchandise, high-quality fresh foods, and value pricing. It's been expanding its product offerings in its stores, adding more than 1000 new items (and 300 unique items) during 2016 and 2017. The acquisition of Caito Foods Service expanded its presence in prepared fruits, vegetables, and proteins categories.

To drive sales and foster customer loyalty, SpartanNash has been renovating its stores, completing seventeen remodels across 2015-16. It also opened a new fuel center. The company expects to close or sell ten stores during 2017.

Another part of SpartanNash's growth strategy includes select acquisitions of retail grocery stores, grocery store chains, or distribution facilities. Other initiatives outlined in early 2016 included driving a "lean and efficient" operating cost structure to remain competitive in the Retail segment, streamlining and obtaining better scale for its supply chain, and leverage the size and scale of its Food Distribution and Retail segments to drive new customer business for its Military segment.

Mergers and Acquisitions

In early 2017 SpartanNash acquired Caito Foods Service's produce distribution business, as well as its fresh produce and prepared foods businesses. The deal, which included two processing facilities and temperature-controlled distribution and logistics company Blue Ribbon Transport, expanded the company's presence in the prepared fruits, vegetables, and proteins grocery categories. SpartanNash paid $217.5 million in cash for Caito's assets.

SpartanNash acquired Dan's Super Market and its six retail locations in 2015, expanding SpartanNash's presence in North Dakota.

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Seaway Food Town, Inc.

850 76th St Sw
Byron Center, MI 49315-8510
Phone: 1 (616) 878-2000
Fax: 1 (419) 891-4211

Stats

  • Employer Type: Public
  • Chb Chief Executive Officer: Dennis Eidson
  • President Chief Operating Officer: David M Staples
  • Employees: 4,496

Major Office Locations

  • Byron Center, MI
  • Grand Rapids, MI