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Published in Food/Agribusiness
Tony Sarsam, CEO of SpartanNash Co. Tony Sarsam, CEO of SpartanNash Co. COURTESY PHOTO

Grocery exec: Pandemic forces long-term shift in consumer habits

BY Sunday, December 20, 2020 04:20pm

Consumers relied on grocery stores and supermarkets like never before during the pandemic. As the state transitioned through various stages of shutdowns, these businesses had to keep their shelves stocked amid challenges like panic buying and stockpiling. Tony Sarsam took over as CEO at SpartanNash Co. in September as the industry was six months into the new dynamic. The former CEO of Texas-based Borden Dairy Co. shares his views on the challenges that await his company with 155 corporate-owned retail stores and a distribution business that delivers to 2,100 independent locations.

Are grocery stores still contending with stockpiling of food and essential products, and has SpartanNash recovered from the panic buying we saw in the spring? 

In anticipation of the fall surge, our distribution and merchandising teams have worked proactively with our suppliers to ensure we can provide our customers the essential food, medicine and household products they need. While we are experiencing some challenges with a limited number of products like spices and pre-packaged lunch meats, our supply chain has recovered from initial shortages. Within some categories like the high demand paper and cleaning products, our store guests may find a reduction in selection, but we do offer several options.

What can these ongoing shortages be attributed to?

Ongoing shortages in high demand categories reflect the labor challenges food producers, manufacturers and packaging companies are experiencing due to the pandemic. They also are a result of suppliers limiting the assortment of certain products so they can maximize production efficiencies. A good way to think about the initial shortages is it takes time for manufacturers and the supply chain to pivot distribution. For example, our favorite product — toilet paper — was earmarked for distribution to schools and businesses, which then closed. SpartanNash worked with other non-retail closed institutions to secure needed products, but it took time.

What will be some key issues grocery stores have to contend with in 2021? 

Until the number of COVID cases decrease, we anticipate labor shortages in our stores, distribution centers and throughout our supply chain will continue to be a challenge. Safety is our top priority and we must account for leave of absences. We have doubled down on recruiting and training initiatives to support our standards of operational excellence. 

Before COVID, 23 percent of consumers prepared more than 90 percent of meals at home. Now, 43 percent of consumers prepare more than 90 percent of meals at home. We must — and will — continue to evolve our product and service offerings to provide the diverse types of food and formats our wide variety of customers deserve.

Has the pandemic driven SpartanNash to place a greater emphasis on sourcing products locally, perhaps as a means for creating a steadier supply chain?

SpartanNash’s vision is to be a best-in-class company that feels local, where relationships matter. Our people-first culture is built on the success of the relationships we form with our associates, customers, suppliers, vendors and communities. Consequently, local product sourcing has been one of our corporate social responsibility dashboard initiatives for years — along with corporate and foundation financial and volunteer support to build stronger local communities. 

When possible, we work with local farmers, food producers and manufactures throughout our supply chain. Buying local not only fuels the local economy, it minimizes ‘food miles,’ improves product quality, and reduces the environmental impact associated with transporting the product. 

And how important is social responsibility to consumers?

Not only is our corporate responsibility for social and environmental initiatives the right thing to do, it makes strong business sense. Ninety percent of shoppers worldwide are likely to switch brands that support a good cause, 32 percent of associates would consider leaving a company if it had no social responsibility, and 65 percent would leave if they felt the company harmed the environment.

Do you foresee online grocery shopping being a permanent trend?

Since the pandemic, our Fast Lane e-commerce business has grown over 300 percent. While it has leveled off to some degree, 90 percent of online shoppers are expected to continue shopping online post-pandemic. In 2021, we will continue to invest in e-commerce solutions and operational efficiencies to exceed customers’ appetite for this shopping convenience.

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