Sam Silverstein
5 min read
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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 Maryland, 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.
