Dive Brief:

• SpartanNash is investing $18.3 million to re-brand 18 Family Fare supermarkets in West Michigan, according to a company press release. The banner has unveiled a new look and expanded offerings under the tagline "keeping it real."
• As part of the re-brand, Family Fare is emphasizing a commitment to value, local products, affordable wellness and socially smart practices. The updated stores will include features like energy-efficient refrigerated cases; the Fresh Divide, which offers fresh-cut produce; and in-store taquerias.
• SpartanNash announced mixed results in its Q1 2019 earnings Monday, reporting a 6.6% net sales growth year-over-year to $2.54 billion. Operating earnings were $22.2 million, a drop from $25.7 million a year ago, due in part to lower food distribution and retail margin rates and higher supply chain costs, the company said.

Dive Insight:

SpartanNash has been hard at work to make improvements across its banners as price pressure, operating expenses and competition have hindered the company’s recent performance. This is the second mediocre quarter for SpartanNash, which also missed expectations for Q4 2018, when the top-line business failed to translate to bottom-line growth.

Family Fare is a token banner for SpartanNash, with 88 retail locations serving Michigan, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming. The chain's store updates, which include more cut fruits and vegetables, new meal solutions and an expanded health and beauty department, began testing in several locations last year before the 18-store rollout. 

With competitors like Kroger, Whole Foods and Meijer also updating stores, Family Fare wants to make sure its stores are relevant, and will likely continue refreshing locations across its footprint. During SpartanNash's earnings call Monday, CEO David Staples said the company incurred higher marketing and promotional costs during Q2 but said it would see a benefit later this year and into 2020.

"This positioning will be key to the differentiation of our operations and sharpening our focus on affordable wellness, value beyond price, a fun and indulgent shopping experience with a focus on local products and providing a socially smart and community focused store operation," SpartanNash CEO David Staples said during the company's earnings call.

The grocer-wholesaler also launched a scan-and-go pilot for two Family Fare locations in Wyoming last November and a mobile app last spring for its major retail banners. Company-wide, SpartanNash has embarked on a private label product rebrand to reformulate hundreds of products with cleaner ingredients and redesign packaging to make labels easier to read.

Although SpartanNash missed its goal to improve adjusted operating earnings and adjusted EBITDA growth in Q1, it has continued to make progress on five key objectives it identified for 2019, the company said in its earnings press release. In addition to its sales growth, SpartanNash identified more than $20 million in savings opportunities and strengthened its management team with a new chief merchandising and marketing officer and chief information officer. SpartanNash also paid down $20 million in debt during Q1.

In January, SpartanNash completed the acquisition of 21 Martin’s Supermarkets, boosting its total store count to 160.