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Published in Food/Agribusiness

SpartanNash adapts to shifting consumer behavior

BY Sunday, November 08, 2020 06:10pm

The COVID-19 pandemic has led many households to bear down in their homes over the last eight months, leading to an uptick in grocery store sales. In fact, many grocery stores struggled to keep shelves stocked with the panicked buying that took place in the pandemic’s early stages. Grand Rapids-based SpartanNash Co. — the fifth largest food distributor in the U.S. — was on the front lines of those efforts with its 155 corporate-owned retail stores and distribution business that delivers to 2,100 independent locations across the country. It’s also a leading distributor of grocery products to U.S. military commissaries. 

MiBiz spoke with Lori Raya, a member of SpartanNash’s corporate leadership team who is responsible for merchandising and marketing strategy, including product assortment, sales planning, sourcing and distribution for SpartanNash’s independent customers and corporate-owned stores.

Lori Raya, executive vice president and chief merchandising and marketing officer at SpartanNash Co. COURTESY PHOTO

With COVID-19 cases rising once again ahead of the holiday season, do you foresee consumers stockpiling food and supplies similar to how they did in the spring?

We’re seeing some early indicators right now that customers are starting to increase their basket size again — certainly not to the levels that it was in March, April or May. 

We are forecasting that basket size will continue to grow on kind of the key commodities. I don’t think it becomes — and I don’t really want to use this word — but the panic that it was. I think people have learned how much food they need to kind of navigate a week or two or maybe they don’t want to go out and shop. I think they’ve managed through that but we are starting to see several categories where customers are starting to buy more products again.

Having weathered the early portion of COVID already, do you feel like SpartanNash has made adjustments and learned lessons that will better equip it for a potential second wave of demand surge?

Absolutely. I’m so proud of our company for how we really stood to support. With our business model, we have over 2,000 independent retailers and our corporate stores, and we have our military segment. We learned a lot on how we have to work with suppliers to get products. Whether it’s the farmers or what we’re doing with meats and produce to make sure we keep the product flowing. We learned a lot about different suppliers and different resources we have — and how to communicate.

Are consumer demands and habits hard to forecast during such an uncertain time?

I think we learned a lot on where we feel like customers will go if there is this surge. I think it will be the same categories as it was previously — it will be the soups, the baking products, the pasta-type items, the pasta sauce — quick, easy and convenient meals. So I think we feel like we’re in a really good spot knowing those categories and we’re working with our suppliers to have the product and make sure we send it out to our stores to take care of our consumers.

How has SpartanNash automated the grocery shopping experience, and has the pandemic advanced the evolution of any of those concepts?

For us, one of the biggest accelerations was our e-commerce business — the whole platform. We have (online grocery shopping platform) FastLane, which is what we leverage here in the greater part of the Michigan market, and our Martin’s (Super Markets) stores have groceries to-go. We were proud of our results and as the pandemic hit, just the useage. Much like other folks that use e-commerce, we had spots where we were so busy that we couldn’t take orders and deliver for a week. We learned very quickly that we had to add more technology into our stores to pick and add more slot windows and capacity.

I think the pandemic accelerates the e-commerce usage from customers three to five years and expands it into other demographics and age groups. Our Boomers have really been the group that accelerated this and are using that platform.

How crucial is it that customers feel safe in your store and how is that achieved?

I can’t underscore (enough) the effort that went underway from our corporate retail stores and the guidance we provided to our independent retailers. I think if you go back and look at SpartanNash for quarter one and quarter two, our corporate retail comp sales surpassed most others in the rest of the market. We had great results. … We mobilized very quickly to put hand sanitizer stations, we put our plexiglass up at our checkout stands literally almost overnight in 155 stores and the social distancing and one-way aisles, staff wearing the face coverings.

I think that’s part of the reason that we performed so well during those time frames is because our customers trusted us. And, when you earn that trust, you gain new customers and we did gain thousands and thousands of new customers in our stores during that time frame.

Do the trends as of late leave any other pressing issues inside your organization?

I would tell you that our business growth continues to be strong and we’re looking to hire associates at our stores and DCs (distribution centers). We have a huge effort underway to staff up. And I know people are looking for employment.

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