Industry Intelligence

Spartan Stores Inc. has reported third-quarter consolidated net sales of $797.2 million, up 1.9 percent compared to $782.3 million for the same period last year.

Spartan’s distribution and retail segments each reported increased sales during the quarter. “We are pleased with our ability to generate third quarter earnings in line with our expectations and to consistently increase sales in our distribution segment for the fifth consecutive quarter, despite a more challenging sales environment than anticipated,” said Dennis Eidson, Spartan’s president and CEO. “Our retail team continues to find ways to provide the consumer with value and a quality shopping experience.”

The company’s most recent effort, the Yes loyalty program, provides many benefits, including free groceries and what Eidson called “the best prescription drug program in our markets. In addition, our expanded Speedway fuel rewards partnership allows us to offer fuel rewards to the majority of our consumers in Michigan and provides existing distribution customers an opportunity to offer similar services. We remain confident that our consumer centric focus will continue to resonate well with both existing distribution customers and the end consumer as we position Spartan Stores for increased long-term growth.”

Q3 net sales for the distribution segment increased 2 percent to $353.8 million from $346.9 million in the year-ago period due to new customer growth and increased pharmacy related sales. This is the fifth consecutive quarter that distribution sales have increased.

For the retail segment, Q3 net sales increased 1.9 percent to $443.5 million compared to $435.4 million in the same period last year. The higher sales were due to increased fuel retail selling prices and increased fuel volume, partially offset by a decline in comparable store sales, excluding fuel, of 1.2 percent. The decrease in comparable store sales reflects the impact of unseasonably warm weather in Michigan and the continuing trend of a cautious consumer spending environment, partially offset by the benefit of the company’s Yes loyalty program rollout to the remaining banners.

“The Michigan economy has certainly improved from its lows; however, since the beginning of our fiscal year there are actually fewer individuals employed in the state,” Eidson said. “As we have previously communicated, employment is a significant driver of our sales performance and, therefore, while the current environment is still challenging we remain confident that as the number of people employed in Michigan begins to grow, Spartan Stores is well positioned for increased sales. That being said, we believe our comparable store sales run rate will be negatively impacted by 1 to 2 percent in the fourth quarter.”

Grand Rapids, Michigan-based Spartan Stores Inc. distributes more than 40,000 corporate and national brand products to 375 independent grocer locations in Michigan, Indiana and Ohio, and to 96 corporate owned stores located in Michigan, including D&W Fresh Markets, Family Fare Supermarkets, Glen’s Markets and VG’s Food and Pharmacy.