SpartanNash's retail sales continue to drive positive results

Miami Herald

5 days ago

Dive Brief:
SpartanNash's first quarter net sales grew 3.7% during the first quarter of fiscal 2025, to $2.9 billion, with strong retail sales growth offsetting lower volumes in the company's wholesale segment, CFO and Executive Vice President Jason Monaco told investors Thursday morning. The company's retail net sales increased nearly 20% to just over $947 million, driven by incremental sales from acquired stores. Wholesale net sales dropped nearly 3% to just shy of $2 billion. SpartanNash plans to lean into its strong retail performance as it moves forward with growth initiatives, executives told investors.
Dive Insight:
SpartanNash's first-quarter results mark the fifth consecutive quarter that the grocery solutions company reported an increase in retail sales and the second consecutive quarter that its wholesale sales have dropped.
Retail performance was primarily driven by SpartanNash's recent acquisitions as well as a 1.6% increase in comparable-store sales. SpartanNash CEO Tony Sarsam noted that the segment was "up against a tough backdrop" due to an ice storm in late March that impacted nearly 10% of the company's stores for multiple days in its "core market," implying that retail sales could have boomed even more if not for the adverse weather.
The next phase of SpartanNash's ongoing strategic plan will put more focus on its retail business. Sarsam noted that the company has already begun onboarding retail-focused executives - like Matt Plum - and said the company will focus on improving the shopper experience with offerings that balance value, low prices and a differentiated offering.
SpartanNash plans to continue investing in its retail segment through three growth platforms: expanding capital deployment into "slight conventional and up-market store remodels;" leaning into the convenience store sector; and growing in the Hispanic foods market by expanding its ethnic store footprint, Sarsam said.
In late October, SpartanNash acquired three Michigan-based convenience store operator Markham Enterprises. At the time of that acquisition, SpartanNash operated 36 c-stores. Earlier this month, SpartanNash opened its fourth Supermercado Nuestra Familia in Omaha, Nebraska, and plans to open two or three more stores under the banner in the Midwest later this year as well as one or two in the first quarter of 2026, according to Sarsam.
During Q1, the company made progress with its "margin-enhancing initiatives," which include supply chain and merchandising transformation, marketing innovation work and its go-to-market plan, Monaco said on the earnings call.
The company recently launched a cost leadership program, which will includetapping into its scale to offer more procurement benefits, implementing automated solutions in distribution centers, and establishing new retail processes that are more time-efficient and labor-effective, Sarsam said.
"The [cost leadership] program is expected to deliver $50 million of annual benefits with in-year gains this year of approximately $20 million. The program enables us to invest in growth and expand margins, all while offsetting industry headwinds," according to Sarsam.
The company reaffirmed its 2025 guidance because "despite the macro environment, our results to date, as well as our expectations for growth programs, give us confidence that we will achieve the 2025 targets we laid out in February," Sarsam said.
SpartanNash currently operates nearly 200 grocery stores across 10 states and distributes groceries to more than 2,300 independent retail locations. The company's banners include Family Fare, Martin's Super Markets and D&W Fresh Market.
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