Dive Brief:
- SpartanNash recorded lower net and comparable-store sales during the first fiscal quarter of 2024, with the grocer’s wholesale and retail operations both posting weaker numbers for the second straight quarter.
- Net sales moved down 3.5% year over year during Q1, while comparable-store sales slipped 2.5%. SpartanNash’s net earnings moved up to 37 cents per diluted share during the period as factors including changes to the company’s merchandising strategy helped boost its gross profit rate.
- SpartanNash’s sputtering results during its latest quarter underscore the company’s heavy reliance on Amazon to drive its business.
Dive Insight:
SpartanNash saw sales to Amazon fall “in the 40-ish percent range” during Q1, a decline that helped bring its overall wholesale business down, SpartanNash CEO Tony Sarsam said during an earnings call Thursday. Sarsam added that SpartanNash expects to see “negative overlaps” stemming from its business with Amazon for the rest of the year.
Sarsam noted that SpartanNash extended its supplier relationship with Amazon during the first quarter. He added that the company saw growth with other customers that helped to blunt the impact from its declining sales to Amazon.
SpartanNash’s net sales during Q1 fell to $2.8 billion, and retail sales were off by 3.6%, to just under $800 million.
Headwinds including declining SNAP benefits and rough weather in markets where it runs stores hindered the company’s same-store sales during the quarter, CFO Jason Monaco said.
House brand sales were a bright spot for SpartanNash during Q1 even as overall shopper volume trended lower, according to Sarsam. Private label penetration was up by about half a percentage point compared with the first quarter of 2023, he said.
Sarsam added that SpartanNash’s newly launched Finest Reserve by Our Family private brand, which includes products like pasta, sauces and dressings, exceeded the company’s sales expectations across its wholesale and retail channels.
“We are seeing a strong repurchase rate from consumers in our retail stores who share positive feedback on the quality and the value of this line,” Sarsam said during the call.
SpartanNash is also making progress with store updates. The company, which operates 147 supermarkets under banners including Martin’s Super Markets, Family Fare and D&W Fresh Market, has started remodeling projects at seven stores and expects to finish four of them in June, according to Sarsam.
