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Miami Herald
27-06-2025
- Business
- Miami Herald
The Friday Checkout: Distributor disruption signals an evolving industry
C&S Wholesale Grocers' announcement this week that it has agreed to take over SpartanNash is more than just another development on the M&A front. It's a reminder that the distribution sector is undergoing fundamental shifts that are poised to ripple across the industry. Like supermarket companies, grocery distributors benefit from scale, as C&S and SpartanNash made clear when announcing their deal. The companies are positioning their merger as a way to bring down grocery costs, noting that the efficiencies they stand to gain by coming together will allow them - and the grocers they serve - to become more competitive. They also described their deal as a way to help alleviate food deserts and improve people's access to pharmacies. News of that deal came on the heels of a cyberattack that brought fellow distributor UNFI to a standstill. UNFI said Friday it has resumed taking online orders, but the disruption brought home in a very public way the fact that grocers depend heavily on large distributors to keep their shelves stocked. UNFI, C&S and SpartanNash are all confronting a future where scale, security and efficient operations are paramount for success. C&S's move to bolster its operations by combining with SpartanNash reflects a laudable goal of helping strengthen a grocery supply chain that has shown itself to be surprisingly fragile. The question now is whether the two companies will be able to deliver on that promise. In case you missed it Grocery trade groups endorse bill that would block SNAP/EBT fees The National Grocers Association and FMI - The Food Industry Association both announced this week that they support proposed congressional legislation that would prohibit state-imposed processing fees on Supplemental Nutrition Assistance Program (SNAP) electronic benefit transactions. The bipartisan measure would make permanent a ban on the fees that was part of the 2018 Farm Bill. The legislation, known as the EBT Act, is intended to ensure that retailers are responsible only for their own costs as the federal government updates the technology used to process SNAP EBT transactions. "The EBT Act is a necessary and common-sense solution to protect community-based retailers from new swipe fees that could compromise their ability to provide SNAP benefits and threaten food access in low-income areas, Stephanie Johnson, group vice president for government relations at NGA, said in a statement. Grocery data-analysis firms merge Data analytics company SPINS has acquired pricing and promotions specialist Datasembly, the companies announced on Tuesday. Terms of the deal were not disclosed. The combination will unite the real-time pricing, promotion and assortment information Datasembly collects with the product and category data gathered by SPINS, which focuses on the wellness-focused CPG sector, the companies said in a press release. Big Y to provide employees' tuition benefits for employees The New England grocery chain announced Thursday that it will provide its workers with tuition benefits at the University of Phoenix as part of an agreement it reached with the university. Eligible curriculum at the online college for Big Y employees includes select business-related programs. The partnership also provides college credit for "relevant life experience and the opportunity to learn in-demand skills that can positively impact career trajectories," Big Y said in a press release. Impulse find Aldi starts them young Aldi commemorated Father's Day on its LinkedIn page with a photo of a father and infant son in matching outfits. What was the duo wearing? Personalized Aldi polos, of course. Carl, a store manager based in the discounter's Tully, New York, division, was featured on Aldi's page alongside his seven-week-old son, Carl (yes, their names match just like their polos). After 13 years in the grocery industry, Dad Carl took parental leave and commemorated his first day back on the job by dressing up his son in the same Aldi uniform he wears. "To say it was tough to go back after 7 weeks is an understatement, but I'm glad to be back with a routine in place. So everyone, meet Baby Carl. Future ALDI [team member]!" Dad Carl said in the LinkedIn post. The post underscores how Aldi is finding ways to bring more heart and personality to its social media presence. Copyright 2025 Industry Dive. All rights reserved.
Miami Herald
25-06-2025
- Business
- Miami Herald
Mapping C&S and SpartanNash's combined footprint
The grocery industry is on the brink of seeing a new distribution company with a nationwide reach. On Monday, C&S Wholesale Grocers announced plans to acquire SpartanNash in a $1.77 billion deal that is expected to close by the end of this year. The companies each operate a distribution network that spans multiple regions, as well as regional grocery banners and private label lines. The companies have positioned the merger as an opportunity to gain leverage over "extremely large global grocers in the U.S. food-at-home space," and they aim to do so by bringing together distribution facility portfolios that stretch across different regions of the U.S. and only overlap in three states. If given the green light to combine, the merged companies will serve nearly 10,000 independent retail locations, according to Monday's announcement. C&S has a distribution presence in 15 states, with facilities as well as offices along the West Coast, in the Northeast and across multiple Hawaiian islands. Meanwhile, SpartanNash's 14 distribution centers are primarily concentrated in the Midwest, with centers in southern and southeastern states, as well. Texas, Florida and Maryland are the only states where the companies both have distribution facilities out of the nearly 30 states where they collectively operate. C&S and SpartanNash's grocery retail footprints tell a similar story. SpartanNash operates close to 200 supermarket locations across a dozen grocery banners in 10 states, including Family Fare, Martin's Super Markets and D&W Fresh Market, per the company's website. C&S's company-operated retail business is smaller, consisting of stores across the Piggly Wiggly and Grand Union Supermarkets banners. C&S, which acquired Piggly Wiggly Midwest in 2021, would not confirm how many Piggly Wiggly stores it operates. C&S was part of a consortium of investors that, early this year, acquired roughly 170 Winn-Dixie and Harveys Supermarket stores from Aldi. C&S lost out on the ability to gain hundreds of grocery stores in the failed Kroger-Albertsons merger. The merger with SpartanNash, however, could help C&S to step up its retail presence with little worry about store overlaps that might draw regulatory scrutiny. Copyright 2025 Industry Dive. All rights reserved.
Yahoo
24-06-2025
- Business
- Yahoo
Number Sense: C&S's planned acquisition of SpartanNash could mean smooth scaling for the distributors
This story was originally published on Grocery Dive. To receive daily news and insights, subscribe to our free daily Grocery Dive newsletter. Number Sense is a regular column that uses data to help understand the grocery landscape. When C&S Wholesale Grocers agreed to buy hundreds of grocery stores, multiple distribution centers and several private label brands from Kroger and Albertsons as part of those grocers' efforts to merge, the company became caught up in a complex antitrust review that ultimately led to the deal's demise at the end of last year — and left C&S empty-handed. Now, C&S is trying again to gain scale as a grocery distributor and retailer through a deal announced yesterday to combine with SpartanNash for more than $1.7 billion. This time around, C&S is firmly in the driver's seat, and the company appears to have taken pains to avoid attracting a level of regulatory scrutiny that could delay or imperil its effort to push the deal to conclusion. While C&S and SpartanNash are both grocery wholesalers and retailers, they mostly operate in different states — unlike Kroger and Albertsons, whose overlapping operations in many markets served as a lightning rod for critics. C&S and SpartanNash overlap in Texas and Florida, where they both have distribution centers, and Wisconsin, where they operate grocery stores. In addition, neither company has the kind of dominant presence in the grocery industry that is likely to cause the kind of uproar that ultimately squashed the Kroger-Albertsons bid. In announcing their merger, C&S and SpartanNash said their merger would create a bigger food distribution network that would be better able to compete with what they described as 'various extremely large global grocers in the U.S. food-at-home space.' Interestingly, however, both companies have concentrated recently on expanding their retail operations. C&S even disclosed in May that it would close a Florida distribution center, without saying why it elected to do so. SpartanNash's sales mix has gradually shifted toward its retail operations, although the company is still mostly dependent on its wholesale business. The company's wholesale segment accounted for just over 67% of its revenue during its latest quarter, down from more than 71% a year ago. In addition, the company's overall sales barely budged year over year, held back by a decline in its wholesale business. SpartanNash began to see its retail operations gain momentum during the third quarter of 2024, when that part of its business posted a sales increase even as its wholesale business slid slightly. The trend became more pronounced during the first quarter of this year. Assuming the merger goes through, SpartanNash would cease to be a publicly traded company because C&S is privately held — and shareholders have enthusiastically signaled that they like the idea of cashing out at the price C&S has agreed to pay. SpartanNash shares soared more than 50% after the deal was announced on Monday morning to $26.57 — a level not seen since early 2023. In fact, Monday's rally pushed up SpartanNash shares at almost twice the rate they increased on Oct. 9, 2020, when the company's share price moved ahead by more than 26%, to $17.95, following the news that SpartanNash gave Amazon the right to buy about 15% of SpartanNash's stock. Closing stock prices for SpartanNash from June 23, 2022-June 23, 2025 Still, a look back at SpartanNash's share price history suggests that C&S is getting a relative bargain with its deal to buy the company for $26.90 per share. In April 2022, for example, as SpartanNash faced pressure from activist investors unsatisfied with its direction to change its board structure, the company's shares were trading at around $30 per share. SpartanNash ultimately convinced shareholders to not to accept the proposal by the investors to replace three members of its board. It's noteworthy that the amount C&S has agreed to pay for SpartanNash includes the assumption of more than $750 million in long-term debt. That amounts to more than 40% of the purchase price. SpartanNash and C&S said in announcing their plan to combine that they expected to consummate the transaction in late 2025, but have given themselves until June 22, 2026, to shepherd the deal through the regulatory review process. The merger agreement also allows the companies an additional three months to tie things together if the only obstacle to completing the merger that remains is for them to meet conditions relating to approvals under antitrust law. If the companies are unable to obtain regulatory approval for the merger, C&S will be obligated to pay SpartanNash a $55 million termination fee. In addition, should SpartanNash opt to accept an offer from another suitor, it will need to pay a breakup fee of $35.4 million. Of course, collecting compensation from a merger partner if a deal doesn't go through can be a challenge, as C&S knows from recent firsthand experience. In May, the company sued Kroger in an effort to collect a $125 million termination fee it says it is due because of the supermarket operator's unsuccessful effort to combine with Albertsons. Recommended Reading C&S to acquire SpartanNash in $1.77B deal Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
24-06-2025
- Business
- Forbes
What The C&S Acquisition Of SpartanNash Means For Grocers
Grocery wholesaler C&S has acquired rival Spartan-Nash for $1.77 billion. getty In the wake of the recent UNFI cyberattack-driven product outages that have impacted thousands of grocery stores, two of the largest grocery wholesalers are now becoming one. C&S, a privately-held distributor with over $23 billion in annual sales, is acquiring publicly-traded SpartanNash for $1.77 billion. The combined entity will manage over 60 warehouses, 200 grocery stores and service tens of thousands of independent and family owned grocery stores across the U.S. 'Being able to operate at a larger scale, supported by the combined innovative capabilities of the two companies, enables a more efficient supply chain as well as an ability to secure the best possible delivered cost of goods and promotional discounts, which are expected to translate to better pricing for community retailers and at the shelf for consumers,' the companies stated in a press release. C&S also admitted the acquisition was a competitive hedge to mass merchants such as Walmart's growing marketshare in the grocery industry, and a seeming benefit to the many independent grocers serviced by C&S and SpartanNash. C&S has plenty of cash on their balance sheet for the deal and had previously attempted to take over 600 stores as part of the failed Kroger-Albertsons merger. They recently acquired over 170 Southeastern Grocers stores via Aldi. Both chains have continued to increase their investment in retail and vertical integration throughout their supply chains. C&S also recently shut down a facility in Florida, laying off over 500 workers. The company has also been known to aggressively bust trade unions representing the employees of companies that it has acquired. By taking on SpartanNash, C&S extends their reach into new markets across the midwest and west coast of the U.S. The merger makes the already consolidated grocery wholesale sector that much more concentrated, with just four companies, including C&S, McLane, UNFI and KeHe, controlling a huge share of the business between manufacturing and retail at national chains such as varied as Walmart, Whole Foods, Sprouts, Albertsons and regional, independent and family-owned grocers. The last big wholesale merger of this scale was in 2018, when UNFI was spurred on by investors to acquire SuperValu as a hedge against Amazon acquiring Whole Foods, UNFI's largest customer. KeHe Distributors acquired DPI Specialty Foods in a smaller deal in 2023. Wholesaling is an essential feature of the U.S. grocery industry and is typically invisible to consumers. While there are still family owned, scrappy, independent wholesalers servicing grocers in many cities, the grocery marketplace will now have fewer choices for brands to use as distributors to sell into retail, or for retailers to pull their vast assortments from. Retailers play a huge part in consolidation, as they tend to have volume-dependent, contractual 'cost-plus' relationships with wholesalers that incentivize them to funnel many suppliers into a 'primary' wholesaler that manages a huge portion of their product assortment and inventory. The cost-plus mark-ups wholesalers give to key retailer partners are typically lower than the wholesalers' gross margins, meaning they have to tap many 'inside revenue' streams from suppliers to make up the difference and stay in the black. Their bottleneck in the supply chain further enables wholesalers to extract such rents from brands in the form of various fees, deductions, marketing programs, and promotional discounts, which brands pass onto consumers in the form of higher prices. Wholesale consolidation also makes it more difficult for suppliers, especially cash-strapped emerging brands and small to midsized farms and manufacturers, to avoid this deluge of rent-seeking activities. Such practices make further CPG consolidation inevitable, as incumbent brands are best positioned to afford the huge cash outlays that wholesalers demand of brands. They also make the food industry more fragile, homogenous and boring, and less likely to adapt to changing consumer preferences and less responsive to climate and geopolitical instability. At the end of the day, shareholders are the biggest winners of wholesale consolidation. The UNFI outages over the past few weeks were a stark reminder of the fragility of consolidation and centralization of grocery wholesale. One wave of cyberattacks crippled the $31 billion a year behemoth, impacting tens of thousands of stores and millions of customers, and sending retailers scrambling to food service distributors and smaller wholesale outlets for essential products. Whether it is another cyberattack, a new pandemic, new trade wars or geopolitical instability that is the fallout of Trump's latest foreign policy folly, a consolidated whole sector is unlikely to be the best model to ensure that consumers have the freshest, best quality, and most affordable food on shelves at grocery stores.
Yahoo
23-06-2025
- Business
- Yahoo
C&S to acquire SpartanNash in $1.77B deal
This story was originally published on Grocery Dive. To receive daily news and insights, subscribe to our free daily Grocery Dive newsletter. C&S Wholesale Grocers has agreed to acquire SpartanNash in a $1.77 billion deal set to close in late 2025, the companies announced Monday. C&S is set to pay $26.90 for each share of SpartanNash's common stock, representing a 52.5% premium over SpartanNash's closing price on Friday. The deal has been unanimously approved by both companies' boards. The combined company will run almost 60 distribution centers, serve about 10,000 independent retail locations and own more than 200 grocery stores. C&S and SpartanNash cast their plan to merge as a way for the grocery companies to better compete with what they describe as 'various extremely large global grocers in the U.S. food-at-home space.' 'Being able to operate at a larger scale, supported by the combined innovative capabilities of the two companies, enables a more efficient supply chain as well as an ability to secure the best possible delivered cost of goods and promotional discounts, which are expected to translate to better pricing for community retailers and at the shelf for consumers,' the grocery distribution companies said in a press release about their deal. The companies noted that the transaction price includes the assumption by C&S of SpartanNash's net debt. SpartanNash had net long-term debt of about $757 million as of April. 19. C&S's plan to combine with SpartanNash follows a series of moves by both grocery wholesalers aimed at bolstering their presence as supermarket operators. New Hampshire-based C&S operates supermarkets under the Piggly Wiggly and Grand Union banners while SpartanNash, headquartered in Michigan, owns banners including Family Fare, Martin's Super Markets and D&W Fresh Market. The deal comes more than six months after C&S's plan to acquire nearly 600 grocery stores through a divestiture deal with Kroger and Albertsons fell apart when those supermarket operators abandoned their effort to merge at the end of 2024. In February, C&S announced that it was part of a consortium of investors that bought around 170 Winn-Dixie and Harveys Supermarket stores as part of a deal to acquire Southeastern Grocers from Aldi. Meanwhile, SpartanNash added more than 50 grocery stores to its portfolio last year through its purchases of retailers, including Metcalfe's Market and Fresh Encounter. The company brought on a new vice president of retail operations in April and a vice president of marketing for the company's retail banners the following month. In June, SpartanNash confirmed that it had eliminated an unspecified number of corporate roles as part of a reorganization. Although SpartanNash generates about 67% of its sales from its wholesale operations, the company has grown increasingly dependent on its retail business to drive revenue growth. SpartanNash has seen five quarters in a row where its retail sales have increased on a year-over-year basis, while its wholesale sales have declined for two consecutive quarters. C&S has also taken steps to shrink its grocery distribution business. In May, the company disclosed that it would permanently shutter a distribution center in Baldwin, Florida, this year, and lay off almost 500 workers as a result. Investors reacted positively to the news of the deal. SpartanNash's shares rose more than 50% Monday morning to their highest level since March 2023. Recommended Reading SpartanNash shakes up corporate staff Sign in to access your portfolio
