Amazon-Linked Grocer SpartanNash Plucks Up Existing Supermarkets

Grand Rapids, Michigan-based SpartanNash, a publicly traded food distributor and retailer with ties to Amazon, is growing its retail footprint by buying up existing grocery brands.

On Tuesday (June 14), the company announced that it has acquired northwestern Michigan grocery chain Shop-N-Save Food Centers, which has three stores in the region, converting them to SpartanNash’s Family Fare brand.

“As a People First company, we welcome the Shop-N-Save team into the SpartanNash family, and we look forward to earning the loyalty of our new community members,” SpartanNash president and CEO Tony Sarsam said in a statement.

“Our grocery stores are an important contributor to our business strategy, allowing us to provide a full portfolio of solutions for independent and chain customers that go beyond food distribution,” Sarsam said. “We leverage the insights from our retail stores to continuously innovate our products and operations across our global network.”

SpartanNash is on its way to being 15% owned by Amazon, with some viewing this deal as a way for Amazon to expand its Amazon Fresh grocery brand quickly, piggybacking off of the food distributor and retailer’s infrastructure.

In October 2020, Amazon entered into a deal to purchase its 15% stake by October 2027. Through the deal, Amazon must buy $8 billion worth of goods from SpartanNash over seven years, according to multiple reports at the time. Weeks after this agreement was announced, BISNOW reported that that SpartanNash closed a $25.8 million deal to lease distribution centers for seven years.

Related news: Is Amazon About To Start A Food Fight With Walmart Over Physical Stores?

The ties between the two companies do not end there. In January of this year, SpartanNash named Bennett Morgan as their new senior vice president and chief merchandising officer. Morgan had previously worked for Amazon as the Amazon Fresh Category Leader, helping to launch the company’s grocery business and extend it into the brick-and-mortar space. Now, as SpartanNash buys up existing grocery chains, those efforts could be an indirect boost to Amazon’s grocery business as well.

“We think we’re developing a really great partnership with Amazon,” Sarsam told analysts on a call in June 2021. “We’ve picked up additional business with this new agreement. … We also opened up a distribution center in Maryland that will be focused on Amazon business in the Northeast. And so, we’ve got a lot going on with Amazon right now, and I think we’re still early in this new agreement and learning about how to grow into that. … It’s an exciting part of our future.”

According to data featured in PYMNTS’ study, Amazon vs Walmart Q4 2021: The Ongoing Battle For Consumer Retail Spend, food remains a sticking point for the mega retailer, with the average American household spending roughly 10 times as much on food and beverages at competitor Walmart than at Amazon. In fact, Walmart’s food and beverage business brought in $264 billion in sales in 2021, while Amazon’s totaled $27 billion.

See also: US Consumers Spend 10x More on Groceries at Walmart Than Amazon