Retail a drag at SpartanNash

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Retail a drag at SpartanNash

By Gina Acosta - 02/22/2018
SpartanNash currently operates 143 supermarkets, primarily under the banners of Family Fare Supermarkets, D&W Fresh Market, VG's Grocery, Dan's Supermarket and Family Fresh Market.

The CEO of SpartanNash says the company is making progress toward key strategic initiatives despite another decline in retail sales during its latest fiscal quarter.

Same store sales in the company's retail segment decreased 3.2% in the fourth quarter ended Dec. 30, the retailer's third consecutive decline in comps. Consolidated net sales for the fourth quarter increased $96 million, or 5.3%, to $1.92 billion from $1.83 billion in the prior year quarter. The increase in net sales was driven by sales growth in the food distribution segment, primarily due to contributions from the Caito Foods Service (“Caito”) acquisition.

"Our fourth quarter capped a year of continued progress against our key strategic initiatives," said David Staples, President and Chief Executive Officer. "Our strong sales growth in food distribution demonstrates our ability to both expand our relationships with existing independent customers and drive new business. We achieved sales growth in our military segment in the second half of the year, consistent with our expectations, and experienced a strong sequential quarterly improvement as we continue to partner with DeCA (Defense Commissary Agency) on its key initiatives. During the fourth quarter, we remodeled several retail locations under our refreshed Family Fare brand positioning, which provides customers with a more experiential and unique shopping experience. We continue to pilot and test numerous innovative concepts and incorporate these learnings into our retail operations and distribution customer offerings. We are confident that these strategies and investments will serve to strengthen our competitive positioning in 2018."

Gross profit for the fourth quarter of fiscal 2017 was $254.8 million, or 13.2% of net sales, compared to $259.3 million, or 14.2% of net sales, in the prior year quarter.

Net sales for the food distribution segment increased $111.6 million, or 13.3%, to $950.2 million from $838.6 million in the prior year quarter, primarily due to contributions from the Caito acquisition and organic sales growth from existing customers.

Net sales for the military segment increased $13.6 million, or 2.7%, to $524.0 million from $510.4 million in the prior year quarter. The increase was primarily due to new commissary business in the Southwest and incremental volume from the private brand program, partially offset by lower comparable sales at DeCA operated locations.

During the fourth quarter, as part of its store rationalization plan, the company closed one retail store and sold another to an existing food distribution customer, ending the quarter with 145 corporate owned retail stores compared to 157 stores in the prior year quarter. Early in the first quarter of fiscal 2018, the company closed two retail stores in connection with its store rationalization plan.

For the first half of fiscal 2018, the company expects adjusted earnings per share to be flat to modestly below the prior year, driven primarily by sequential improvements in Caito operations and cycling certain vendor programs. 

SpartanNash currently operates 143 supermarkets, primarily under the banners of Family Fare Supermarkets, D&W Fresh Market, VG's Grocery, Dan's Supermarket and Family Fresh Market. Through its MDV military division, SpartanNash is a leading distributor of grocery products to U.S. military commissaries.