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SpartanNash Reports Uptick in Net Sales for Q3

Michigan retailer positions itself for growth through continued supply chain transformation
Lynn Petrak, Progressive Grocer
a sign on the side of a road
SpartanNash is out with its third quarter financial report, which showed higher retail comparable store sales.

SpartanNash ended its third fiscal quarter with a slight rise in net sales, attributed to an increase in comparable retail store sales and continued growth with some existing food distribution customers. The Michigan company, a grocery retailer and wholesaler grocery distributor that also provides service to military commissaries and exchanges, adjusted its full year outlook in anticipation of better-than-expected performance.  

For the three-month period ending Oct. 9, net sales at SpartanNash were 0.6% higher than the third quarter of 2020, reaching $2.07 billion. Retail comparable sales rose 3.1% over last year and 13.5% from 2019. SpartanNash's net sales for retail climbed 2% in the latest quarter, coming in at $608.7 million from $596.6 million in the third quarter of 2020.

From a profitability standpoint, the business reported a higher gross profit rate in third quarter, largely driven by inflation in its food distribution and military segments. Gross profit for the third quarter was $329.5 million, or 15.9% of net sales, compared to $324.8 million, or 15.8% of net sales, in the prior year quarter. On the expense side, operating expenses rose to 14.8% of net sales from 14.4% during the same quarter last year, linked to higher labor and transportation costs during a turbulent time for both areas.

Looking ahead, the company updated its range of full fiscal year retail comparable sales expectations, from a decline of 5% to 3% to a decline of 2% to 1%. Adjusted EBITDA for the year is now expected to range from $205 to $210 million.

“We are proud of these solid third-quarter results, and we are appreciative of our frontline associates who continue to execute on a daily basis through industry-wide labor, inflation and supply chain challenges," said SpartanNash President and CEO Tony Sarsam. "Across our organization, we have shown great resolve and discipline, helping to deliver strong performance and allowing for us to once again raise our full-year earnings outlook."

To maintain its positive growth, Sarsam said the company will continue to invest in its supply chain transformation initiative, which comes at a pivotal time. Earlier in 2021, the company announced a multi-year initiative to revamp supply chain processes across it network, from warehouse management to labor use to technology upgrades.

SpartanNash’s 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. No. 39 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America, the Grand Rapids, Mich.-based company serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar and Djibouti. SpartanNash operates over 150 supermarkets, mainly under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery and Dan’s Supermarket. 

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