Amazon Seeks Stake in SpartanNash

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Amazon Seeks Stake in SpartanNash

By Thad Rueter - 10/09/2020
Amazon Seeks Stake in SpartanNash
Amazon Go is also part of online retailer's increasing push into grocery.

Amazon is getting even deeper into the grocery business, this time courtesy of SpartanNash.

The food wholesaler and distributor has issued warrants to an Amazon affiliate — Amazon.com NV Investment Holdings LLC — to buy up to 5.43 million shares of stock through Oct. 7, 2027, according to a filing with the U.S. Securities and Exchange Commission.  

According to that document, the warrant vested with respect to 1,087,455 warrant shares upon issuance, and the remaining warrant shares will vest in accordance with the terms of the warrant. 

The deal could potentially result in Amazon owning about 15% of SpartanNash’s outstanding shares. SpartanNash declined to comment and Amazon offered no immediate comment. On Friday, Oct. 9, SpartanNash stock was selling at $19.20 per share at the market opening.

Amazon and SpartanNash have a relationship that stretches back to at least 2016. That’s when SpartanNash agreed to supply Amazon’s distribution centers with grocery products.

Amazon, of course, has kept expanding into the food retail space. Among its most recent moves is the launch of its first stand-alone supermarket banner: a 35,000-square-foot, digitally perfected store in Woodland Hills, California, called Fresh.

The Fresh banner isn't an offshoot of Whole Foods, nor does it look like one of those checkout-less Amazon Go stores that have been popping up in urban areas across the United States, nor does it resemble the 365 banner that Amazon scrapped last year, either.

The new Amazon Fresh supermarket takes elements of all of those concepts -- micro fulfillment, contactless features, a curated assortment of premium and conventional products, and highly personalized service -- and melds them into one innovative store that offers something for every type of food shopper.

No. 2 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America, Seattle-based Amazon is also planning grocery stores in the Los Angeles and Philadelphia markets, according to media reports. Amazon-owned Whole Foods, based in Austin, Texas, is No. 24 on the list, while Grand Rapids, Michigan-based SpartanNash, whose core businesses include distributing grocery products to independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges, as well as fresh produce distribution and fresh food processing, is No. 40.