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SpartanNash (SPTN) to Launch a Micro-Fulfillment Center

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The COVID-19 outbreak made delivery services for essential goods including grocery all the more vital. Last year, when the anti-pandemic protocols were imposed, forcing people to remain indoors, a dramatic shift to online purchasing was seen. Even after the risk of infection subsides, we believe, consumers will prefer online grocery shopping because of easy order-placement methods, contactless payment schemes, and a safe and convenient delivery system.

To cash in on these trends, SpartanNash Company (SPTN - Free Report) shared plans of unveiling a 55,000-square-foot SpartanNash Micro-Fulfillment Center (MFC) at 5199 68th St. SE in Caledonia, MI.

This MFC, which is slated to open doors on Jul 26, will accommodate 16,000 products as well as pick and pack Fast Lane orders for 24 Ada Fresh Market, D&W Fresh Market, Family Fare and Forest Hills Foods outlets across West Michigan, mainly in the Grand Rapids and Holland area.

We note that the MFC will serve more than 1,000 Fast Lane orders daily once it will be completely operational. This will more than double the existing Fast Lane order capabilities. Thus, the facility will boost Fast Lane efficiency, free up space and stock in stores, and offer Fast Lane customers greater product assortment. The order will be either delivered directly at a store for curbside pickup or to the consumer's doorstep after it is picked and packed at this facility.

In fact, Fast Lane is quite a popular scheme for distant guests, offering them the same in-store prices without having to even set their foot on the shop premises. About one million orders have been shopped from Fast Lane since it was introduced in 2017. Fast Lane orders are specifically catered by the company's personal shoppers, focusing on selecting fresh, top-quality items and directly communicating with guests to know their preferences. Customers can place Fast Lane orders on shopthefastlane.com. This facility looks to enhance the Fast Lane shopping experience as it commits to improve the fulfillment speed and product availability.

What’s More?

We note that SpartanNash has been emphasizing on online grocery shopping to enrich consumers’ shopping experience. Last month, it came up with enhanced benefits and savings exclusively for its Fast Lane subscribers at no additional costs. This allowed Fast Lane subscribers avail of free, unlimited curbside pickup at $49 per year.

This presently Zacks Rank #3 (Hold) company is in a planning phase of a supply-chain transformation initiative. Management is focused on expanding customer relationships within the Food Distribution and retaining momentum in the Retail segment. The company will continue making investments to drive the overall efficiency.

A look at this grocery retailer’s price performance shows that its shares have increased 15.7% in the past six months compared with the industry’s 9.8% rally.

Better-Ranked Stocks to Consider

Target (TGT - Free Report) presently has a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 62.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General (DG - Free Report) , currently a Zacks #1 Ranked stock, has an expected long-term earnings growth rate of 11.3%.

Walmart (WMT - Free Report) currently has a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 17.8%, on average.

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