SpartanNash to boost spending on ‘emerging growth’

SpartanNash said Thursday it would boost its planned capital spending this year in order to invest in what it called “emerging growth opportunities.”

Officials were light on details citing competitive concerns, but one initiative involves new packaging for items that would emerge from the company’s Fresh Kitchen fresh-food processing facility. CEO Dave Staples described that as “an exciting move into what we think is a really hot space, and a space that is right on trend with where the world is going.” He declined to provided further detail. Another opportunity involves investing in technology to aid efficiency in distribution, which will also differentiate Spartan’s offerings from its peers, Staples said.

These projects will add approximately $5 million to Spartan’s anticipated capital expenditures this fiscal year.

As reported Wednesday (link: http://www.supermarketnews.com/executive-changes/spartannash-appoints-shamber-cfo), SpartanNash’s Fresh Kitchen facility is off to a slower start than anticipated but Staples maintained the facility would deliver its intended results. “We remain confident about the ultimate growth potential and long-term vision for this business in its ready-to-eat categories,” CFO Thomas Van Hall said.

In other topics addressed in Thursday’s conference call, Staples said the company has acquired approximately $20 million to $40 million in new distribution accounts through the bankruptcy and breakup of counterpart Central Grocers.

“We were the only one I think of three or four or five [distributors] who competed for accounts there that don't have a facility in the market yet, but still able to secure $20 million to $40 million,” he said. “I think that's a big win for us and I think that speaks to the type of reputation we're beginning to build.”

While SpartanNash’s own retail business is expected to face continuing challenges this year, the company is pleased with the results of the Fast Lane grocery pickup it launched earlier this summer at 11 stores, with Staples saying the offering could be at 50 stores by year end.

“It's been under a month that we had our first store out, but we're seeing great things, like as the person comes back in their third and fourth times, their purchases keep going up substantially and they get into that $110 to $120 range by that fourth visit,” he said. “ We're seeing 65% to 70% of the sales being new business, whether that be new customers or incremental purchases from existing customers.”

The company has also begun rolling out the Our Family private brand line chainwide, replacing the Spartan brand in Michigan stores. Our Family was acquired when Spartan Stores merged with its larger counterpart Nash Finch in 2013.