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Tell me about Spartan Stores

arcturus

By arcturus
in Grand Rapids

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MJLO City

MJLO

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Its trading about $2 above its 52 week low. Owner of Family Fare and D&W Fresh Markets. Is this company viable long term or will Meijers continue to clean its clock? Does anyone actually grocery shop at a Spartan owned store?
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NorthCoast Hamlet

NorthCoast

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Spartan Stores are in fine shape. A companies stock price is not always a good way to gauge it's health. Spartan is taking in revenue, and it's growing. The thing you gotta realize is that Spartan is more known for it's distribution business then it's retail operations. It's only gotten into retail in the last decade or so. Spartan started off in the 30's as a member owned Co-op. A way for local grocers to get groceries cheaper and more efficient. Much like Land O Lakes is with dairy farmers. It only became a publicly traded company in the mid 90's. The reason it's stock is trading so low has nothing to do with it's operations or it's profits, and much more to do with the fact that it's base of operations is in, economic uncertain Michigan, Ohio, and Indiana. The people who buy and sell interest in companies on Wall St. Don't care that Spartan is expanding, that it closes underperforming units, and that it grows revenue and profit. They have no idea that it's at 76th and Clyde Park, and no sense of the over 300 stores it distributes products too. All they know is that it's based in Michigan, where the economy and demographics, in their eyes are eroding. In fact if i remember I do believe that Spartan intends on expanding it's retail network, and creating a more unified brand. In the long Spartan isn't going anywhere. In the short, they are probabally one of the more healthy Michigan companies. I gaurantee that if Meijer were publicly traded, if it had not been hostily taken over by now, it's stock would be taking the same beating Spartans is. If you ask me I think Spartan is holding it's own even on it's stock value given circumstances.

Edit: just did a fact check on myself, gotta correct, SPTN was founded in 1917, became for profit in the 70's and became publicly traded in the last decade about the same time it expanded into retail.

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arcturus Burg

arcturus

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Great comments, thanks. There was mention of remodeling after acquisition. What about remodeling of existing stores? Are there deli sections in any of them? My limited experience with Family Fare is their Lake Michigan Dr/Collindale location. Very cramped and dated.

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pcdoctor Whistle-Stop

pcdoctor

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I used to shop at Family Fare which used to be called Great Day on Lake Michigan DR. We do most of our shopping at meijer now a days because the prices at Family Fare or any spartan store is outrageous. That's why it seems like they are profiting. Most of the time when I go to Family Fare, there's not much business there. The only time it was really busy was right before that big snow storm we got in December.

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fotoman311 Burg

fotoman311

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I used to shop at Family Fare which used to be called Great Day on Lake Michigan DR. We do most of our shopping at meijer now a days because the prices at Family Fare or any spartan store is outrageous. That's why it seems like they are profiting. Most of the time when I go to Family Fare, there's not much business there. The only time it was really busy was right before that big snow storm we got in December.
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MJLO City

MJLO

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It's not a question of price. Traditional supermarkets are always going to be under cut by the big box general merchandisers. They survive on convenience, the hassle of not having to deal with to many people. Mostly the fact that they cater to the neighborhood they are around. Alot of people are still so used to going to the supermarket believe it or not that they dont consider the big boxes. I dont mind paying a little extra to keep my $ in the community (tho not everyone has that mentality, and understandably so). I will say west Michigan is a Unique market for grocers, Because the big box everything store was really invented there, the traditional grocer concept is very almost un-noticed, and unseen. In other parts of the country where Meijer is not the brand. Traditional grocers are still the main outlet for groceries and what have you. In Phoenix, there are three supermarkets on every corner, and few big box stores. Now that i'm in Minneapolis it'll be interesting to see how it works here. Being the home of Target I figured it'd be Target everything. I am suprised at how Targets presence here closely resembles other like cities. So far I have found that it's somewhere in between the extremes of GR and PHX.

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NorthCoast Hamlet

NorthCoast

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^MJLO makes a good point. People in the GR have grown up with Meijer. Unlike other big box stores, Meijer started out as a grocery store so by the time they expanded to the big box format they already had a loyal following of grocery shoppers. Being a former D&W/Spartan employee I've always favored the more traditional grocer. The only big price gap between the two is in general merchandise/HBC items. Meijer, like all the other big box stores, has significant more buying power and therefore can simply undercut the price and still make profit. Ad sales are usually almost identical in price and offering. It is almost like the ad depts. get together and have lunch to agree what they will be putting on sale. These days true, loyal shoppers are rare so if you can be competitive on the weekly ad you can make it.

An interesting point of note is that traditional medium and even small grocers are becoming the new trend. Stores like Trader Joe's have proven there is demand for such a style. Wal-Mart now offers "Neighborhood Market", a 42,000 sq. ft. store (roughly the size of some the newer Family Fares) as well as a "Marketside" concept in Arizona that is around 21,000 sq. ft., earning the knickname "small-mart". Tesco, a British grocer, came to the west coast a few years ago and has been building 15,000 sq. ft. stores. It will be interesting to see if this trend continues and moves east whether chains like Meijer as well as others will pick up on it.

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