Dive Brief:
- SpartanNash recorded a slight increase in net sales during the fourth quarter of fiscal year 2024, as the grocery company’s retail division sales grew nearly 8% while its wholesale segment posted a decline of more than 2%.
- Net sales moved up in Q4 by 0.7% year over year, to $2.26 billion, while comparable-store sales decreased by the same percentage. The company recorded a net loss of $1.04 per diluted share during the quarter.
- SpartanNash’s retail operations surged during Q4 as acquisitions the company made last year boosted its financial performance.
Dive Insight:
SpartanNash significantly expanded its retail portfolio during 2024, and the new grocery and convenience stores the company purchased have helped it build momentum while also setting the stage for other potential acquisitions, executives said during an earnings call on Wednesday.
The company’s acquisitions include its purchase of regional grocery chains Metcalfe’s Market and Fresh Encounter as well as c-store and fuel station operator Markham Enterprises.
SpartanNash is looking to both organic initiatives and M&A to help its retail operations grow, CEO Tony Sarsam said during the call, adding that the company is focusing on remodeling “select conventional and upmarket stores” in addition to expanding its presence in the Hispanic grocery store space.
The grocer operates three ethnic grocery stores in Nebraska and found that they grow rapidly and generate “terrific margins,” according to Sarsam. That success has prompted SpartanNash to look for other opportunities to expand its ethnic grocery store presence in the Midwest, he added.
“We’re looking at opportunities amongst other cities within our current footprint where we can look at either acquisitions or brownfield or even greenfield startups of Hispanic stores,” Sarsam said, noting that the company hopes to double the number of ethnic grocery stores it runs this year and grow even faster in the future.
Sarsam said SpartanNash has also made progress toward building foot traffic and improving its same-store sales, noting that Michigan, which is its largest market, had positive comps during the last two quarters.
In addition, SpartanNash has made progress in boosting its private brand penetration, which the company’s CFO, Jason Monaco, said was above 27% at the end of Q4.
SpartanNash believes that it will be able to achieve positive same-store sales growth in 2025 as it makes improvements to its retail operations and expands its store footprint, according to Monaco.
As it looks to improve its retail operations, SpartanNash also wants to expand its role as a c-store operator and is looking for potential acquisition opportunities, Sarsam said.
“The base idea around convenience and being able to offer the one-stop for fuel and picking up snacks or whatever — that’s a trend that we think is going to continue,” he said.
Sarsam indicated that the company could be getting close to adding to its c-store fleet: “We talked about the acquisition we did with the Markham group this past year, and I would expect you’d see us doing more of those types of things in 2025.”
