SpartanNash’s recent growth spurt may be just the beginning

SpartanNash announced its second retailer acquisition of the year on Monday, this time involving Fresh Encounter, Inc., and its network of 49 stores in Ohio, Indiana, and Kentucky.

In April, the Byron Center, Mich., food distributor and grocery retailer acquired Metcalfe’s Market, a three-store grocery chain in Wisconsin.

The Fresh Encounter purchase expands SpartanNash’s retail footprint by 33%. Fresh Encounter operates under the retail store banners Community Markets, Remke Markets, Chiefs Markets, and Needler’s Fresh Market. The transaction, the details of which were not disclosed, is expected to close in late November and will increase SpartanNash’s reach to 196 stores across 10 states.

The deal had been months in the making and involved a deep-rooted wholesale customer of SpartanNash. And it might be the beginning of a growth spurt for SpartanNash. 

Supermarket News Senior Editor Bill Wilson talked to Amy McClellan, executive vicepresident and chief customer officer at SpartanNash, about the Fresh Encounter acquisition and how it dovetails with the company’s growth strategy; what, if any, changes are involved in the deal; and how the Metcalfe’s transaction is coming along.

Bill Wilson: How does this move fit SpartanNash’s overall strategy?

Amy McClellan: This is really an exciting milestone in our strategic-growth plan. So we will welcome 2,500 associates [with Fresh Encounter]. It will bring top-line revenue through the retail business and is also it is consistent with our desire to grow in wholesale as we expand distribution to the additional store portfolio.

BW: How long was the deal with Fresh Encounter in the works?

AM: It’s been a journey and just over the last few months things have come together with Fresh Encounter. They've been a long-time wholesale customer of ours. So for 58 years, we’ve been serving a portion of their stores. And so really the relationship with Fresh Encounter has been many decades in the making. And when the family was ready to sell, we were the trusted partner that they looked to complete that transaction.

BW: So can you give me an idea of what this transition might look like? Are there any store closings planned? Anything like that?

AM: No store closings are planned and, importantly, we are retaining all of the Fresh Encounter associates. It’s business as usual. We want to prioritize business continuity for the communities we serve. Of course, over time, we’ll thoughtfully consider any banner consolidation. The Fresh Encounter brands are strong in the communities that they serve, and so we’ll seek to understand the value proposition that we want to make sure we continue to deliver in those communities as we think about consolidating the portfolio. But there are no immediate plans to do so; taking care of those communities and the associates for a smooth transition into the SpartanNash family is our priority.

BW: This is SpartanNash’s second acquisition since April. Are you looking to push more into retail?

AM: We’re looking to grow in ways that add value to the overall portfolio consistent with what we’ve shared in our overall growth strategy.

BW: Do you have any more acquisitions in retail planned?

AM: We have a strong appetite, always looking for growth.

BW: Are you looking to bring in any changes to Fresh Encounter? Are you looking to still run locations under the Fresh Encounter name?

AM: Really, it’s understanding how we can maximize share in those communities through the scale that we can bring with innovative solutions. But again, we want to preserve business continuity and serve shoppers through the holidays in the ways that Fresh Encounter has done really, really well. They’ve delighted customers, nourished their communities, and inspired pride in their teams. We’ll continue that as we onboard those associates into our people-first culture and really thinking about the service levels that we provide to shoppers.

BW: How is the Metcalfe’s Market acquisition going? Any updates there?

AM: Metcalfe’s is a great new addition to the SpartanNash family and portfolio of retail stores. They’re actually represented here at our summit this week. We honored one of their frontline associates in our Circle of Excellence and so they’ve really adopted the people-first culture we have at SpartanNash and are a super important part of our retail portfolio going forward. Lots of innovation and excitement in the Metcalfe's stores.

The stores are fully integrated now but continuing to serve their communities in unique and different ways. Our banner portfolio allows for unique value propositions that are really relevant to the neighborhoods and communities that we serve. And so we've been able to preserve that approach with Metcalfe’s while leveraging our scale as a wholesale distribution and retail company.

BW: So with the two acquisitions over the last few months, what message is SpartanNash sending to the rest of the grocery industry?

AM: We’re growing. We’re growing because we are leveraging insights to create solutions in retail, both in the distribution side and in stores continuing to meet and exceed customer expectations, whether that’s on the wholesale side of our business, our independent customers and in our retail stores. It’s really thinking about how we meet and exceed those expectations that our customers have. If we stay focused on the customer, we will continue to grow and that's where our focus is at.