Recent acquisitions fuel fourth-quarter growth at SpartanNashRecent acquisitions fuel fourth-quarter growth at SpartanNash

The fourth quarter allowed SpartanNash to realize the financial benefits of its two acquisitions in late 2024, and the multi-channel company said it has its eye on further growth. 

The biggest news for grocers?

The Byron Center, Mich.-based grocer completed two acquisitions about two weeks apart in October. SpartanNash first acquired 49-unit supermarket chain Fresh Encounter, then purchased the three stores that form Markham Enterprises' convenience-store network.

During the earnings call on Wednesday, SpartanNash CEO Tony Sarsam mentioned that fourth-quarter traffic was soft for the grocer, but stronger-than-expected performance from the acquisitions led to a 7.7% year-over-year increase in net sales. Net sales rose by 0.7%.

It seems SpartanNash isn't finished with mergers and acquisitions. Sarsam stated that the goal is to capture growth in the retail sector through both organic and inorganic initiatives, using a three-pronged approach: expanding SpartanNash's capital deployment for store remodels into select conventional and upmarket stores; focusing on the attractive convenience-store sector; and leveraging the retailer’s expertise in Hispanic food markets by growing its ethnic store footprint in 2025.

Sarsam is also focused on capturing more market share through its wholesale and retail segments.

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Fourth quarter by the numbers

Full fiscal year by the numbers

Proud to serve

SpartanNash’s wholesale business might have been down for the fiscal year but the grocer continues to do well serving the military, where sales have grown for 12 consecutive quarters. Sarsam sees the military as an area of additional organic growth. 

Adding spice to ethnic growth

SpartanNash has good reason to believe it can grow in the ethnic grocery segment. The company has operated three stores in Nebraska catering to Hispanic consumers, and according to Sarsam, they have terrific margins. SpartanNash is looking at other cities where it can expand its ethnic footprint, whether it be through acquisitions or new store construction.

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Grocery growth in 2025

Inflation has returned to pre-pandemic conditions around the low single digits, according to Sarsam, and promotional rates are about what they were in 2019. Sarsam said he expects the grocery industry to grow about 2.5% in 2025.

In the hands of robots

SpartanNash has robots running its largest distribution center in Grand Rapids, Mich. The robots are powering an inventory selection system, and SpartanNash CFO Jason Monaco said during the earnings call the automated solution is streamlining certain processes and removing manual labor hours.

Projecting the future

For fiscal year 2025, SpartanNash is projecting net sales to fall in the range of $9.8 billion to $10 billion and adjusted EBITDA to be between $263 million and $278 million. Food inflation is predicted to be about 1%.

In their own words

“The momentum we have going into 2025 gives us confidence that our strategic plan is working. A winning recipe will serve as our guide to drive results, capture market share, win new business, grow bottom line, and maximize shareholder value.” —SpartanNash CEO Tony Sarsam

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