Private Label Expansion Key to Long-Term Growth at SpartanNash

Focused on the company’s continuing effort to reestablish SpartanNash’s corporate identity, company president and CEO Tony Sarsam is feeling bullish about the future.

As he looks at 2023 and beyond, Sarsam said a key goal for SpartanNash is its ongoing effort to further strengthen its operations inclusive of enhancing its supply chain, improve supplier relationships and developing new ways to meet consumer demands.

A significant part of this effort is continued expansion of its private label assortment, a carryover from 2022 when SpartanNash grew its store-branded products.

At the recent FMI Midwinter Conference in Orlando, Sarsam spoke with Store Brands and shared some insight into the year ahead at SpartanNash.

STORE BRANDS: What are your bigger goals for SpartanNash in 2023?

TONY SARSAM: We’re continuing to move forward on a number of initiatives from 2022. We are continually looking for new ways to strengthen our operations and strengthen our supply chain. A big part of this is identifying new ways to invest in our people, which is part of our people-first agenda. We’re also working to improve our engagement with our suppliers. Following the numerous price increases we saw last year, we realized we need to change how we engage with our vendors as we continue working to get the best deals for our customers. This also includes identifying ways to pull cost out of the supply chain as well. 

SB: During 2022, SpartanNash spoke a great deal about the expansion of its private label assortment. What’s the focus for 2023?

TS: Last year we started to think more critically about the overall quality of our private label products. We want to make sure that we have quality products that offer attractive prices to our shoppers. During 2022, our family of private label brands grew about three-times the rate of national brands.

SB: What areas of growth are you targeting in private label this year?

TS: We are doing a lot more with fresh. When you look at categories such as deli, meat and bakery, I see a great deal of opportunity for growth in each of those categories.

SB: Will SpartanNash enhance its marketing efforts of store brands this year to drive additional growth?

TS: We are making strategic investments in marketing and advertising of our private label products. It is important to have the visuals in front of consumers to highlight our brands. This is part of the growth strategy within the segment.

SB: How does sustainability play into SpartanNash’s private label mix?

TS: We are focused on the real things that can work pertaining to sustainability. We see a lot of companies putting out 10 year goals for sustainability. But many of the people putting out those goals won’t be with their company to make sure those goals are met. For us, it’s about making an impact short term. For example, we entered into a west coast partnership for our supply chain that allowed us to take miles out of our network. We saved a lot of money and also reduced our carbon output. 

SB: Does SpartanNash get a lot of feedback from shoppers about sustainability?

TS: Not really. Our investors are looking for a return and our shoppers are focused on making ends meet. That said, we are focused on being responsible citizens and make sure we are marching forward with issues pertaining to sustainability.

SB: Supply chain has been a major issue over the past couple of years. Have things calmed a bit?

TS: What’s interesting is that order compliance bottomed out in early 2022, some two full years after the start of the pandemic. We turned the corner in the back half of the year as fill rates at the end of ‘22 were in the low 70s. But it’s important to remember that this was an industry that ran at 98% efficiency in 2019, and we’re still a long way from that.