Michigan company buying Martin’s Super Markets says it won’t change name or close stores

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SOUTH BEND — Martin’s Super Markets has dominated the local grocery scene for decades, becoming a retail powerhouse in the region, and the Michigan company considering buying the chain says shoppers have nothing to worry about.

Grand Rapids-based SpartanNash says customers won’t notice any changes after the deal is finalized and it has no plans to close any stores.

“It’s going to be business as usual,” SpartanNash spokeswoman Meredith Gremel said. “The same people will work in the stores and the same people will run the stores.”

The Martin’s name will also remain on the 21 stores, which employ around 3,500 people in the area.

“We have a number of different banners that really work in the local communities they serve,” Gremel said. “We’re not going to come in there and suggest there should be changes. Martin’s (has) understood this.

The Michigan-based grocer and retailer announced its intention to acquire Martin’s Super Markets on Tuesday morning, but Martin’s officials decided to wait until Wednesday morning to hold a press conference on the deal, which is expected to be concluded in the first quarter of 2019.

SpartanNash is no stranger to Martin’s, which has been the grocery chain’s main supplier since 2005. That includes Spartan-branded foods sold in Martin’s stores, which it recently rebranded as the “Our Family” brand.

Regional food retailers have been rocked in recent years by changing consumer preferences, the merger of Whole Foods and Amazon, the growth of national retailers and the expansion of e-commerce. The changes led to the closure or acquisition of regional chains like Indianapolis-based Marsh Supermarkets, which filed for bankruptcy in May 2017.

SpartanNash, a publicly traded company, was formed after the merger of Spartan Stores and Nash Finch Company in 2013. The company currently owns and operates 139 supermarkets in eight states, including Michigan and Ohio, including Family Fare Supermarkets, D&W Fresh Market, VG’s Grocery, Dan’s Supermarket, and Family Fresh Market.

SpartanNash is also a distributor to independent and chain retailers and the primary supplier of groceries to US military commissioners.

More recently, in 2017, SpartanNash acquired Caito Food and Blue Ribbon Transport, specializing in food distribution and logistics.

In 2017, SpartanNash’s total net sales were $8.13 billion, up from $7.73 billion in 2016. Nearly half of its sales came from its distribution business, according to filings with the SEC, military sales and retail sales each accounting for about a quarter of sales. .

SpartanNash has 19 distribution centers nationwide, including one in Bloomington, Indiana, and another in Indianapolis, and employs more than 14,800 people, including 9,100 full-time and 5,700 part-time.

The impending acquisition, Gremel said, is part of SpartanNash’s long-term strategy to grow its retail business, bringing more “stability and security to the business.”

“We’re in a really crazy time in the grocery industry,” Gremel said. “We have historically had very tight margins; it is no exaggeration to say that we earn a penny on the dollar.

John Talbott, associate director of the Center for Education and Research in Retailing at Indiana University Kelley School of Business, said the acquisition seemed like a logical move for SpartanNash and Martin’s. Without the acquisition, SpartanNash would likely lose the distribution agreement with Martin’s to a larger competitor, and Martin’s would be vulnerable to a decline in market share.

“It seems like a marriage of convenience to me,” Talbott said. “It gives them both what they need to stay alive.”

He pointed to the expansion of e-commerce, the ability to shop online, as one of the driving factors for consolidation within the supermarket sector.

These e-commerce services come at a cost, and huge competitors like Amazon, Walmart, and Kroger have far bigger pockets than regional grocers like Martin’s or even SpartanNash.

“Conventional supermarket chains will struggle to balance the changes in the current grocery retail environment,” Christopher Mandeville, an analyst at market research firm Jefferies, said recently in an article published by Supermarket News.

But in addition to the cost of developing e-commerce platforms, retailers are also paying the price for the current labor shortage due to the rising cost of picking up and delivering groceries, according to experts.

Martin’s has been a South Bend-owned grocery store since 1947, when Martin and Jane Tarnow opened an 800 square foot neighborhood grocery store at 1521 Portage Ave., South Bend.

A few years later, the couple moved their store to a slightly larger building at 1439 Portage Avenue, and called it Martin’s IGA Super Market. In 1963 Martin’s moved to a new shopping center at Portage and Elwood Avenues.

The grocery chain has since grown to include 21 stores in South Bend, Mishawaka, Elkhart, Granger, Nappanee, Plymouth, Logansport, Goshen and Warsaw, as well as stores in Niles, St. Joseph and Stevensville, Michigan. Martin’s had net sales of more than $450 million for the fiscal year ending July.

South Bend Regional Chamber President and CEO Jeff Rea said he’s always worried when the area loses a head office, but he hopes the move could be beneficial for buyers.

In SpartanNash’s Tuesday release, Martin President Rob Bartels said his company is looking for a partner it can trust with a family heritage of customer service, quality products and value.

“From our perspective,” SpartanNash’s Gremel said, “learning from really good retailers and being a really good retailer will help us grow. And Martin’s is a phenomenal retailer.

Tribune writers Mary Shown and Margaret Fosmoe contributed to this report.

Martin’s

Headquarters: South Bend

Activity: Groceries

Ownership: Private company

Annual turnover: 420 million dollars

Number of stores: 21

Employees: 3,500

SpartanNash

Headquarters: Grand Rapids, Michigan.

Activity: Grocery stores, grocery distribution and military quartermaster distribution

Ownership: Publicly listed (Nasdaq: SPTN)

Annual revenue: $8.1 billion

Number of stores: 139

Employees: 14,800

Distribution facilities: 19

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