By George Anderson
Spartan Stores has entered into an agreement to purchase "certain operating assets" of D&W Food Centers.
Craig Sturken, chairman, chief executive officer and president of Spartan Stores, said in a released statement, "We are very pleased to bring together these two outstanding retail grocery operators. This transaction is a component of our previously stated business strategy, which is to grow our business through opportunistic acquisitions of other grocery operators that are adjacent to or in markets where we operate today."
The deal, pending due diligence, will give Spartan control of D&W's 20 grocery stores operating in Western Michigan.
"This transaction will significantly strengthen our competitive retail market position by expanding our services to certain communities and trade areas not currently served by our existing store base. D&W Food Centers is a very well respected name in western Michigan grocery retailing known for its fresh and unique product offerings. This combination presents an outstanding opportunity to pool the talents and resources of both organizations to benefit consumers in the West Michigan market. Our distribution customers, associates and the communities where we operate will all benefit from the economies of scale created from this transaction," said Mr. Sturken.
When the deal is closed, Spartan estimates it will add $200 million to the company's sales line.
"This business combination provides significant opportunities to improve retail sales growth and operating efficiencies. These opportunities include reintroducing our award winning 'Spartan' private label products to D&W Food Center customers, giving them the choice to purchase these sought after products in their local D&W Food Center stores. This transaction will also give us the opportunity to implement elements of our successful category management practices, to improve distribution efficiencies through higher sales volumes and to strengthen our buying power, which will benefit all of our customers," said Mr. Sturken.
Moderator's Comment: What will Spartan Stores need to do to make the deal for D&W Food Centers work? Do you see other opportunities for Spartan that match the company's stated strategy of growth "through opportunistic acquisitions of other grocery operators that are adjacent to or in markets" where it operates? - George Anderson - Moderator