Reporting Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Reporting Segment Information

Note 17 – Reporting Segment Information

SpartanNash sells and distributes products that are typically found in supermarkets. The operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. The Company’s chief operating decision maker is the Chief Executive Officer, who determines the allocation of resources and, through a regular review of financial information, assesses the performance of the operating segments. The business is classified by management into three reportable segments: Food Distribution, Military and Retail. These reportable segments are three distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and executive compensation. The Company reviews its reportable segments on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

The Company’s Food Distribution segment, consisting of 11 distribution centers, one of which is shared with the Military segment, supplies grocery products, including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products and pharmacy to a diverse group of independent retailers, select national retailers, food service distributors and the Company’s corporate owned retail stores. Sales to independent retailers and inter-segment sales are recorded based upon both a “cost plus” model and a “variable mark-up” model, which vary by commodity and servicing distribution center. To supply its wholesale customers, the Company operates a fleet of tractors, conventional trailers and refrigerated trailers.

The Military segment contracts with manufacturers to distribute a wide variety of grocery products primarily to U.S. military commissaries and exchanges from its 7 distribution centers, one of which is shared with the Food Distribution segment. The contracts typically specify the commissaries and exchanges to supply on behalf of the manufacturer, the manufacturer’s products to be supplied, service and delivery requirements and pricing and payment terms.

The Retail segment operated 157 corporate owned retail stores and 30 fuel centers in the Midwest and Great Lakes regions as of December 31, 2016. The Company’s retail stores typically offer dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products and health and beauty care products. The Company also offered pharmacy services in 90 of its corporate owned retail stores as of December 31, 2016.

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 the Company by reporting segment:

	Food
(In thousands)	Distribution		Military		Retail		Total
Year Ended December 31, 2016 (52 Weeks):
Net sales to external customers	$	3,454,541	$	2,197,014	$	2,083,045	$	7,734,600
Inter-segment sales		918,095		—		—		918,095
Merger integration and acquisition expenses		3,703		1		3,255		6,959
Depreciation and amortization		21,397		11,484		44,365		77,246
Operating earnings		85,093		12,160		11,514		108,767
Capital expenditures		19,075		6,447		47,907		73,429
Year Ended January 2, 2016 (52 weeks):
Net sales to external customers	$	3,305,094	$	2,207,161	$	2,139,718	$	7,651,973
Inter-segment sales		973,512		—		—		973,512
Merger integration and acquisition expenses		2,037		—		6,396		8,433
Depreciation and amortization		26,127		12,081		45,126		83,334
Operating earnings		78,841		17,059		26,975		122,875
Capital expenditures		17,967		3,768		57,659		79,394
Year Ended January 3, 2015 (53 Weeks):
Net sales to external customers	$	3,356,331	$	2,275,512	$	2,284,219	$	7,916,062
Inter-segment sales		1,005,844		—		—		1,005,844
Merger integration and acquisition expenses		12,644		27		4		12,675
Depreciation and amortization		29,816		11,350		45,828		86,994
Operating earnings		54,802		21,721		38,323		114,846
Capital expenditures		31,953		15,088		42,971		90,012
					December 31,		January 2,
(In thousands)					2016		2016
Total Assets
Food Distribution					$	776,725	$	750,277
Military						395,737		415,140
Retail						754,625		747,359
Discontinued operations						3,249		4,487
Total					$	1,930,336	$	1,917,263

The Company 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:

	December 31, 2016				January 2, 2016				January 3, 2015
(In thousands, except percentages)	(52 Weeks)				(52 Weeks)				(53 Weeks)
Non-perishables (a)	$	4,908,142	63.5	%	$	4,845,763	63.3	%	$	4,998,895	63.1	%
Perishables (b)		2,359,829	30.5			2,373,829	31.0			2,449,562	31.0
Pharmacy		356,010	4.6			310,377	4.1			289,494	3.7
Fuel (c)		110,619	1.4			122,004	1.6			178,111	2.2
Consolidated net sales	$	7,734,600	100.0	%	$	7,651,973	100.0	%	$	7,916,062	100.0	%

(a) Consists primarily of general merchandise, dry groceries, beverages, health and beauty care products, tobacco products and frozen foods.

(b) Consists primarily of produce, dairy, meat, bakery goods, delicatessen items, floral products and seafood.

(c) Fuel sales are specific to the Retail segment only.