Spartan Stores continues supply chain optimization

As part of its ongoing distribution network optimization, Spartan Stores Inc plans to operate all supply chain activities from its Grand Rapids MI distribution center.

Part of the optimization strategy includes the potential closure of the company’s 415,000-square-foot Plymouth MI dry grocery warehouse by the end of its fiscal 2010 fourth quarter. The Plymouth warehouse operating lease is set to expire in October 2010, and the company’s current collective bargaining agreement with employees at the facility will expire in April 2010. The company intends to promptly engage in negotiations with the Teamsters Local 337, which represents the approximately 140 Plymouth facility bargaining unit employees, prior to making a final decision on closing the facility.

As part of the negotiations, Spartan expects to offer employment opportunities for Plymouth Teamster employees at its Grand Rapids distribution center. In conjunction with the warehouse optimization, the company will implement an administrative cost reduction initiative.

These initiatives are expected to improve the distribution segment’s operational efficiency by increasing inventory turns, warehouse through-put, and capacity utilization, while reducing administrative expenses and inventory investment requirements.

Grand Rapids-based Spartan is the nation’s 11th-largest grocery distributor with warehouse facilities in Grand Rapids and Plymouth. The company distributes more than 40,000 private-label and national brand products to approximately 350 independent grocery stores in Michigan, Indiana, and Ohio.

Spartan also owns and operates 97 retail supermarkets in Michigan, including Family Fare Supermarkets, Glen’s Markets, D&W Fresh Markets, Felpausch Food Centers, and VG’s Food and Pharmacy.