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Reporting Segment Information
 12 Months Ended
Jan. 03, 2015
Segment Reporting [Abstract]  
Reporting Segment Information

Note 17

Reporting Segment Information

We sell and distribute products that are typically found in supermarkets. Our operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. SpartanNash’s chief operating decision maker is the Chief Executive Officer. Our business is classified by management into three reportable segments: Military, Food Distribution and Retail. These reportable segments are three distinct businesses, each with a different customer base and management structure. We review our reportable segments on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

Our Food Distribution segment consists of 12 distribution centers that supply independently operated retail food stores, our corporate owned stores and other customers with dry grocery, produce, dairy, meat, delicatessen, bakery, beverages, frozen food, seafood, floral, general merchandise, pharmacy and health and beauty care items. Sales to independent retail customers and inter-segment sales are recorded based upon both a “cost plus” model and a “variable mark-up” model which varies by commodity and servicing distribution center. To supply its wholesale customers, SpartanNash operates a fleet of tractors, conventional trailers and refrigerated trailers.

The Military segment consists of eight distribution centers that distribute products primarily to military commissaries and exchanges under contracts with the manufacturers of products.

The Retail segment operates 162 supermarkets in the Midwest. Our retail supermarkets are operated under banners including Family Fare Supermarkets, No Frills, Bag ‘N Save, Family Fresh Markets, D&W Fresh Markets, Sun Mart and Econo Foods. Our retail supermarkets typically offer dry groceries, produce, dairy products, meat, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, delicatessen items and bakery goods. In 79 of our supermarkets, we also offer pharmacy services and 29 fuel centers were in operation as of January 3, 2015.

The allocation of intersegment profit and corporate level expenses to the reporting segments was historically performed for the legacy Spartan Stores operations and the legacy Nash-Finch Company operations using methodologies consistent with Spartan Stores’ and Nash-Finch Company’s respective historical practices. As previously disclosed, subsequent to the merger management commenced an evaluation of potential methodologies for allocating intersegment profit and corporate level expenses to the reporting segments to determine the most appropriate manner for the newly merged operations. Management completed the evaluation during fiscal 2015 and the new allocation methodology reflects the manner in which the business is now managed and how management allocates resources and assesses performance. In accordance with generally accepted accounting principles, results for the fiscal year ended January 3, 2015, the 39 week period ended December 28, 2013 and the year ended March 30, 2013 have been revised to reflect the new allocation methodologies. There was no impact to consolidated financial results.

Identifiable assets represent total assets directly associated with the reporting segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments.

The following tables set forth information about SpartanNash by reporting segment:

 

(In thousands)

  

Military

 

  

Food
Distribution

 

  

Retail

 

  

Total

 

Year Ended January 3, 2015 (53 weeks)

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Net sales to external customers

  

$

2,275,512

  

  

$

3,356,331

  

  

$

2,284,219

  

  

$

7,916,062

  

Inter-segment sales

  

 

—

  

  

 

1,005,844

  

  

 

—

  

  

 

1,005,844

  

Merger transaction and integration expenses

  

 

27

  

  

 

12,644

  

  

 

4

  

  

 

12,675

  

Depreciation and amortization

  

 

11,350

  

  

 

29,816

  

  

 

45,828

  

  

 

86,994

  

Operating earnings

  

 

21,721

  

  

 

54,802

  

  

 

38,323

  

  

 

114,846

  

Capital expenditures

  

 

15,088

  

  

 

31,953

  

  

 

42,971

  

  

 

90,012

  

39 Week Period Ended December 28, 2013

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Net sales to external customers

  

$

248,643

  

  

$

1,095,759

  

  

$

1,252,828

  

  

$

2,597,230

  

Inter-segment sales

  

 

—

  

  

 

533,470

  

  

 

—

  

  

 

533,470

  

Merger transaction and integration expenses

  

 

—

  

  

 

20,993

  

  

 

—

  

  

 

20,993

  

Depreciation and amortization

  

 

1,412

  

  

 

7,706

  

  

 

27,964

  

  

 

37,082

  

Operating earnings

 

 

1,901

  

  

 

(1,328

)  

  

 

16,220

  

  

 

16,793

 

Capital expenditures

  

 

2,246

  

  

 

13,867

  

  

 

21,087

  

  

 

37,200

  

Year Ended March 30, 2013 (52 weeks)

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Net sales to external customers

  

 

 

  

  

$

1,120,650

  

  

$

1,487,510

  

  

$

2,608,160

  

Inter-segment sales

  

 

 

  

  

 

634,525

  

  

 

—

  

  

 

634,525

  

Depreciation and amortization

  

 

 

  

  

 

6,346

  

  

 

32,735

  

  

 

39,081

  

Operating earnings

  

 

 

  

  

 

23,920

  

  

 

37,048

  

  

 

60,968

  

Capital expenditures

  

 

 

  

  

 

8,797

  

  

 

33,215

  

  

 

42,012

  

 

 

  

January 3,

2015

 

  

December 28,
2013

 

  

March 31,
2013

 

Total Assets at Year End

  

 

 

 

  

 

 

 

  

 

 

 

Military

  

$

435,647

  

  

$

451,518

  

  

$

—

  

Food Distribution

  

 

763,914

  

  

 

805,468

  

  

 

254,326

  

Retail

  

 

727,979

  

  

 

721,898

  

  

 

529,840

  

Discontinued operations

  

 

4,742

  

  

 

4,767

  

  

 

5,501

  

Total

  

$

1,932,282

  

  

$

1,983,651

  

  

$

789,667

  

SpartanNash offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The following table presents sales by type of similar product and services:

 

(Dollars in thousands)

  

January 3, 2015
(53 weeks)

 

 

December 28, 2013
(39 weeks)

 

 

March 30, 2013
(52 weeks)

 

Non-perishables (1)

  

$

4,998,895

  

  

 

63.1

% 

 

$

1,393,157

  

  

 

53.6

% 

 

$

1,289,461

  

  

 

49.4

% 

Perishables (2)

  

 

2,449,562

  

  

 

31.0

  

 

 

894,783

  

  

 

34.5

  

 

 

930,659

  

  

 

35.7

  

Fuel

  

 

178,111

  

  

 

2.2

  

 

 

145,631

  

  

 

5.6

  

 

 

179,012

  

  

 

6.9

  

Pharmacy

  

 

289,494

  

  

 

3.7

  

 

 

163,659

  

  

 

6.3

  

 

 

209,028

  

  

 

8.0

  

Consolidated net sales

  

$

7,916,062

  

  

 

100

% 

 

$

2,597,230

  

  

 

100

% 

 

$

2,608,160

  

  

 

100

% 

(1)

Consists primarily of general merchandise, grocery, beverages, snacks and frozen foods.

(2)

Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.