SpartanNash's recently announced acquisition of Caito Food Service provides the distributor with an opportunity to improve sales in the perimeter of the store, and "that's where the action is today," Dennis Eidson, CEO, said Thursday.
"We wanted to be even more influenced in our business by the perimeter and the increase in volume that comes with that," Eidson said during a conference call discussing the company's third quarter financial results, released Wednesday. "We think Caito is very foundational, as it relates to being able to look at this very fragmented part of the business ... and be able to take advantage of opportunities going forward."
He said that while SpartanNash executives researched potential targets to acquire "one company just jumped off the page and it was Caito."
SpartanNash announced the $217.5 million deal last week, which will expand SpartanNash's presence in serving some of the industry's fastest-growing categories including fresh produce, value-added foods and vegetables, and protein-based prepared meals.
"It's a great company, it's got a great management team," Eidson said. "They have a great vision, there is whole fresh kitchen opportunity that will come along with it that is right on point, exactly what the consumer is looking for today."
SpartanNash, based in Byron Center, Mich., in the meantime is continuing to fight difficult industry conditions, Eidson said. Deflation worsened during the third quarter and still show no signs of letting up. In SpartanNash's wholesale division, Eidson said, deflation ran about 80 basis points worse in the third quarter than the second.
"Q3 was our fifth consecutive in our distribution segment and there is no reason to believe that Q4 won't be our sixth." And although SpartanNash will shortly begin to cycle significant dips in meat and other proteins, "we don't see deflation going away early next year."