Dive Brief:

• SpartanNash is pressing its shareholders not to vote for three nominees to its board of directors put forward by an activist investor group seeking to change the grocer's corporate direction.
• The investors — led by Macellum Advisors and Ancora Holdings Group — are focused on a "short-term focused, predetermined agenda," lack "basic knowledge" of SpartanNash's business and would "distract the Company from its current path, which is clearly producing demonstrable results and outsized shareholder returns," SpartanNash said Monday in a letter to shareholders.
• SpartanNash faces withering criticism from Macelleum and Ancora, which claim the grocer is "wed to a flawed corporate structure and has failed to implement basic operating initiatives."

Dive Insight:

SpartanNash's campaign to repel Macelleum and Ancora centers on the grocery company's assertion that it is on a "positive trajectory" after making key changes in recent years, including changing its CEO and adjusting the makeup of its board.

The company emphasized that its stock price has outperformed the S&P 500 in the time since it parted ways with former CEO Dave Staples in mid-2019, reflecting what it described as a "transformation [that] is delivering positive results and driving shareholder value."

SpartanNash said the activist investors — which are seeking to replace SpartanNash Chairman Douglas Hacker and two other current directors with nominees of their own — want to employ "a cookie-cutter playbook" that is not aligned with the grocery company's operations.

"This playbook demonstrates, at best, a basic lack of knowledge and understanding of the Company's vastly different business model, and at worst, a blatant disregard of how SpartanNash's business operates with the largest portion of the Company's revenue being generated from distribution, not retail," SpartanNash wrote in the letter to shareholders.

SpartanNash supplies groceries to retailers including Dollar General, Amazon and grocery store companies. The grocer also operates 145 supermarkets under the Family Fare, Martin's Super Markets and D&W Fresh Market banners as well as commissaries at U.S. military facilities around the world.

SpartanNash added in its letter that it has tried unsuccessfully to work out a compromise with the investors it is fighting with. The company agreed to interview two of the investors' director candidates and later proposed the appointment of one of the candidates, but Macellum "rejected the offer outright," SpartanNash said.

In addition to the letter, which it filed Monday with the Securities and Exchange Commission in conjunction with proxy materials for its annual meeting on June 9, SpartanNash unveiled a website aimed at persuading shareholders not to vote for the three board candidates nominated by Macelleum and Ancora.

The effort by Macelleum and Ancora to exert influence over SpartanNash follows campaigns by the investors to change the course of other retailers. Those companies include Kohl's, which agreed last year to add two directors proposed by a group led by the activist investors.

"Although our preference is to reach a constructive resolution, like we have done in other situations with much larger companies, we are prepared to do whatever it takes to ensure shareholders' interests are finally prioritized in SpartanNash's boardroom," executives of Macellum and Ancora wrote in a Tuesday letter to SpartanNash shareholders.