SpartanNash's supply chain overhaul lifted throughput 9%, savings target to $25-35M

What was changed

SpartanNash — a food distributor, wholesaler and supermarket retailer that owned and operated 147 stores — announced a supply chain transformation in 2021. The plan had five components: sales and operations planning, inventory optimization, network strategy, procurement, and more productive warehouses. Management framed it as a way to elevate service levels, create room for customer growth and support a goal of growing revenue to $10 billion by 2025.

The company reshaped its network over the following 12 to 15 months, adding and subtracting sites to ensure 'the right locations and the right inventory at the right place,' CFO Jason Monaco said. Since 2020 it had closed two distribution centers to scale in core markets and opened two more as part of a geographic expansion. It also opened its first micro-fulfillment center in 2021 to process online orders for 24 stores, adjusted operations for pandemic-driven grocery pickup and delivery demand, and signed a deal making it a distributor for DoorDash's DashMart online convenience store.

In the warehouses, CEO Tony Sarsam said the company had found 'ways to improve everything from the steps to the touches,' and order throughput rose 7% year over year in Q1 2022 and 9% in Q2. On the Q1 call Monaco said the supply chain updates had 'frankly delivered ahead of schedule,' and by August 2022 SpartanNash raised its expected annual cost savings from the overhaul to $25-35 million, up from the $15-30 million first projected when the plan rolled out.

Why it worked

More productive warehouses were the key element: better service levels create room for customer growth toward the $10B-by-2025 revenue goal.

Pandemic-era grocery pickup and delivery demand changed how orders flow, so the company added micro-fulfillment and new distribution capacity.

Network flexibility — closing distribution centers in core markets while opening others — put inventory where growth was instead of spreading it evenly.

Early savings arrived ahead of schedule, giving management evidence to raise guidance rather than wait for the full plan to play out.

What can be applied

Operational overhauls compound: steady period-over-period gains from small process changes can outrun the original savings target — and justify raising it.

Aftermath

As of the August 2022 earnings call the transformation was still running: annual savings guidance stood at $25-35 million, throughput had improved in 'practically every single period,' and Sarsam said he expected the gains to continue. SpartanNash kept its 147 supermarkets and was serving DashMart as a distributor. The reporting gives no results beyond Q2 2022.