said a new distribution customer — a little company called Amazon.com — is doing greater volume than expected and holds "significant growth potential" for the Byron Center, Mich.-based wholesaler.
Spartan has been been distributing dry and chilled groceries to the e-commerce giant's distribution centers — primarily in support of the Amazon Prime Now offering — but more recently expanded to support its burgeoning Amazon Fresh business, Dave Staples, SpartanNash's CFO, said during a conference call Thursday discussing quarterly financial results.
"We are excited about our relationship with Amazon," Staples said. "While still a relatively new account, the volume has been greater than we expected and we believe that it has significant growth potential. This relationship is a great example of our commitment to pursuing solutions for difficult logistic issues, and we continue to look at opportunities to grow sales with other non-traditional customers.
"It's been a great relationship," Staples added. "I think we were able to solve some operational issues for them, and I think our reputation with them expanded. That's how the Fresh group has gotten interested."
The company did not reveal the volume of business Amazon was providing, but it was one element of a wholesale distribution segment that grew sales and earnings in the quarter, helping to offset challenges to the company's military and retail segments, as reported by SN Wednesday.
SpartanNash on Thursday detailed several initiatives intended to boost retail sales, which have suffered under competitive pressures and low inflation:
- The company will complete the conversion of all of its stores in the Omaha, Neb. region to its flagship Family Fare banner. Spartan last year introduced the Family Fare banner at five stores in Omaha where it acquired stores under the price focused Bag n' Save and No Frills names in its merger with Nash Finch. The company will relaunch the entire market, including its loyalty program, when conversions are complete. Three stores that did not fit the rebranding were closed recently, Staples added.
- The company will also invest further in analytical capabilities, making "greater inroads into the areas of targeted and personalized marketing and more relevant product and assortment selections," Staples said.
- An in-store marketing program will be rolled out to Family Fare stores highlighting unique products and value offerings. Spartan also intends to launch a new fresh private label, known as Open Acres for products in meat, deli, bakery and produce. These items "will deliver national brand or better quality and a significant savings to our customers in company-owned and independent stores," Staples said.
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