SpartanNash Company (NASDAQ:SPTN) Q2 2023 Earnings Call Transcript

Tony Sarsam: Well, it’s certainly, as you pointed out, these are challenging times in terms of the overall environment, but we still feel great about our overall plan. We have — our plan was not built on just the macro environment movement, but a lot of really important work in these transformations. And all the ones we talked about, the transformation we’ve done in the supply chain that Jason just mentioned, the merchandising transformation work, the innovation work we’re doing in marketing as well as these other moves and go to market. So we see all those as being supportive elements that help us to be more resilient even in tough macro times. So, we said we’re going to be there, and we feel really good about that.

Operator: And your next question will come from Krisztina Katai with Deutsche Bank Securities.

Jessica Taylor: This is Jessica Taylor on for Krisztina. I wanted to ask about your units per transaction for your retail business. Just wondering, as you see inflation falling, if you’re seeing a corresponding increase in units in the basket?

Jason Monaco: What we’ve seen is improvement in both foot traffic and in performance and the size of the basket from a dollar standpoint. As I look back to the second quarter, baskets continue to grow together with inflation, and we’ve been pleased with the results.

Jessica Taylor: Okay. And then, just another question on your fill rates. Can you talk a little bit about where your inbound and outbound fill rates are right now, and are they hitting what you expected, and are they back to the levels that you saw pre-COVID?

Tony Sarsam: All right. So, fill rates are performing better than our expectations right now, both in terms of where we are — right now, we’re probably running 400 or 500 basis points ahead of our — what our plan was what we believe to be the fill rates we get from our inbound from our suppliers. To be clear, they’re still not great. And your question about when do we see them coming back to where they were before the pandemic. It’s — they’re ahead of where we thought they’d be right now, but they’re way behind. So — and those fill rates are running in the in the mid-80s right now. We were getting fill rates that were in 2019, for example, we have been in the high 90s, 97, 98, 99. So it’s been a slow road back for the supply group.

Our team here has done a terrific job of sort of mitigating that and making sure that our customers as best we can or shield it from that experience. So we see in the stores is great fill rate on the shelves are outbound. One of my favorite stats are outbound delivery in terms of on-time delivery. Our inbound on-time delivery is still coming in at 60%, 70% from our suppliers, what we ship out is in the high 90s. So, our team does what they’re supposed to do, they shield some of those effects from our customers. So we feel good about that progress. We feel good about the fact that we’re ahead on the fill rate where we expected to be at this point. Still a long way to go to get back to where we were in 2019.

Jessica Taylor: Thank you. And then just finally, on — in terms of promotions, are you seeing that the CPGs that you work with are funding more promotions these days, or are you seeing any changes there that you can speak to?