Retailers

Directing Lightning From a Bottle: SpartanNash CEO on His 2021 Goals

Team energy is there, now focus needs to be on being nimble, Tony Sarsam says
Photographs courtesy of SpartanNash

Tony Sarsam took the helm at Grand Rapids, Mich.-based distributor and retailer SpartanNash in September. SpartanNash operates more than 150 corporate-owned stores in the Midwest and distributes to more than 2,100 independent locations plus military commissaries nationwide. The company turned heads in October when a new commercial agreement with Amazon came to light: SpartanNash has helped supply Amazon's expanding Amazon Fresh grocery business since 2016, but under terms of the new agreement, Amazon could acquire up to 12.5%* of SpartanNash's outstanding shares over the next seven years.  

Sarsam, a former CEO of Borden Dairy, told investors on his first SpartanNash quarterly earnings call in November that he has been inspired by team members' passion to serve customersand that he's eager to see the company leverage its existing competencies to become a more nimble and efficient enterprise. In an email interview with Winsight Grocery Business, Sarsam further detailed his vision for SpartanNash heading into 2021and his key initial learnings leading a business at a crossroads. 

Christine LaFave Grace: You mentioned on the third-quarter earnings call that you were knee-deep in evaluating areas that might be right for productivity and efficiency improvements. What are some top contenders that you see? What would you like to see evolve in the next six to 12 months?

Tony Sarsam: Since joining SpartanNash on Sept. 21, I’ve been committed to getting out and meeting with as many team members as possible. This has included tours and town halls at eight of our distribution centers, 29 stores, and one of the military commissaries we serve. This face time is critical to hearing from team members on what’s working, as well as challenges and opportunities for the future. Across the board, my primary observation has been we have a marvelously dedicated team committed to serving our customers—whether they be store guests, independent retailers, national accounts or our military families around the world. I also have observed we need to bring process tools into our operations to be more effective and efficient.

You have described yourself as a people-first leader, and said you’ve been glad to recognize outstanding performance from associates you’ve met in the past couple of months. Do you have any standout examples that you'd share? Things that you'd point to and say, “That’s it; that’s SpartanNash, and that’s what’s going to position us well for the future."

Great follow-up question. My best day is getting out to store and talking with an assistant store director, produce manager or front-line deli team member and hearing them talk about the great ideas they have. The excitement and energy in their voices is incredible. I love the opportunity to say "thank you" and also recognize individuals who are executing with excellence. There are so many examples—from phenomenal front-line utility players who have stepped up to respond to COVID disruptions and increased safety protocols to shining examples of customer service, innovative meal solutions, creative bakery, volunteering and giving back in the communities. I’ve also been struck by the longevity of many teams—on a recent tour, one store’s top five length-of-service associates have been with the company over [a combined] 150 years.

Sarsam in store
Tony Sarsam (left) and store associate.

You mentioned also in the call the challenge of trying to predict the future amid something we’ve never seen. That said, are there fundamental truths or changes you see coming out of 2020 that will inform SpartanNash’s moves going forward?

Overall, I would give us a good grade for our response to COVID. Our front-line workers and the essential teams behind them have really stepped up and they are an incredible asset to our company.

One thing we have learned is we are not as nimble as we need to be in the wake of a disruptive event. We have opportunities for improvement, including, as I mentioned, bringing process tools into our operations to be more effective and efficient.

As for 2020 learnings related to changing consumer behaviors, our insights tell us some trends will continue, and some may snap back.  For example, e-commerce has grown substantially. Evidence indicates people will continue to use this tool—both curbside and home delivery. Consequently, we will continue to invest in our service platform and delivery model, which exceed industry best standards for customer satisfaction.   

You have mentioned having children ranging in age from middle school to recently graduated from college. How do your kids’ buying and dining preferences differ from yours? When it comes to food, have/how have their perspectives and experiences influenced yours, or vice-versa?

We have a large, very active family and our heritage is from the Middle East. We love Mediterranean food and exploring the family cookbook my father created with his mother’s recipes. As you might guess, we also have lots of opinions on food.

That said, as the kids have grown, they’ve come to view eating more as a utilitarian event. They want to grab something fast, or if left to their own devices, go for a favorite takeout or home delivery [option]. Family meals also are not quite as conscripted as they were when my wife and I were growing up, where the family waited until dad got home from work to sit down and break bread together. What I’ve learned from this is to win in the food industry, we must shift to meet the heavy demand for indulgence, convenience and "I want it now" food.

As I mentioned, in many of our retail stores we offer an e-commerce solution with click-and-collect curbside pickup and home delivery. We also have significantly increased our meal solutions with greater "Meals to Go" options, including vegan and gluten-free breakfast, lunch, dinner and snacks. Some of our stores also offer the Fresh Divide solution where you pick out your produce and our team will cut and dice to order. Nothing like not having to chop onions or vegetables for a quick stir-fry meal. Our next steps include piloting in-store grilling stations where you can pick your protein, have it prepared, and either eat in the store cafe or take [it] home. On one of my recent tours, it was fun to see store guests picking out their meat, and within minutes they were enjoying hot sliders. 

What achievements or progress are you looking forward to celebrating a year from now?

I am looking forward to celebrating being back together again and not battling the isolation and fear this pandemic has inflicted. Hopefully this will be much sooner than a year.

I also want to celebrate the new institutions we are putting in place to value, recognize and respect our associates.  Third, I’m looking forward to delighting our customers with consistently great service.

*Editor's note: This number has been updated from earlier reporting.

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