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Concentration of Credit Risk
12 Months Ended
Dec. 28, 2019
Risks And Uncertainties [Abstract]  
Concentration of Credit Risk

Note 15 – Concentration of Credit Risk

The Company may provide financial assistance in the form of loans to certain independent retailers for inventories, store fixtures and equipment and store improvements. Loans are generally secured by liens on real estate, inventory and/or equipment, personal guarantees and other types of collateral, and are generally repayable over a period of five to ten years. The Company establishes reserves based upon assessments of the credit risk of specific customers, collateral value, historical trends and other information. The Company believes that adequate provision has been recorded for any uncollectable amounts. In addition, the Company may guarantee debt and lease obligations of independent retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements.

In the ordinary course of business, the Company may advance funds to certain independent retailers (“customer advances”) which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances for remaining a SpartanNash customer for a specified time period. These customer advances must be repaid if the purchase volume requirements are not met or if the retailer no longer remains a customer for the specified time period. Collectability of customer advances is not assured.

The Company had previously advanced funds to an independent retailer who subsequently defaulted on the terms of the supply agreement and went into receivership. To realize its collateral, the Company obtained the rights to acquire five of the retailer’s stores. The rights related to three of the stores were assigned to another independent retailer in exchange for certain consideration as part of a long-term supply agreement and the Company acquired the two remaining stores. Both the execution of the long-term supply agreement and the acquisition of two stores occurred during the second quarter of 2019. The excess of the purchase price over the fair value of net assets acquired of $2.4 million was recorded as goodwill in the consolidated balance sheet and allocated to the Food Distribution segment based on the relative value of the assets acquired and the expected cash flows between the Retail and Food Distribution segments. The Company recorded charges of $2.4 million and $32.0 million in 2019 and 2018, respectively, related to realizability of the customer advance.   

In the ordinary course of business, the Company also subleases and assigns certain leases to third parties. As of December 28, 2019, the Company estimates the present value of its maximum potential obligations for subleases and assigned leases to be approximately $7.7 million and $12.0 million, respectively.