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|===Regional Economy===||===Regional Economy===|
|+||Michigan businesses, and more susceptibly, razor thin margin grocers such as SPTN were hard hit by the Michigan Business Tax instituted by then governor Jennifer Granholm.|
|<ref>[http://www.mlive.com/business/west-michigan/index.ssf/2011/02/michigan_grocer_industry_likes.html Gov. Snyder is on a roll with Michigan grocers 2/18/2011]</ref>||<ref>[http://www.mlive.com/business/west-michigan/index.ssf/2011/02/michigan_grocer_industry_likes.html Gov. Snyder is on a roll with Michigan grocers 2/18/2011]</ref>|
Spartan Stores, Inc. (Spartan Stores) is a regional grocery retailer and distributor which operates in Michigan and Indiana. Spartan employs 8,800 people, distributes to 375 retail grocer locations, and operates 96 neighborhood locations. SPTN's distribution segment maintains 43,000 SKUs and provides approximately 3,200 private label and general merchandise items.
Listed are some of SPTN's most important competitors in Michigan.
Meijer is a major competitor to SPTN and has a dominating presence in the Midwest United States; especially Michigan. Half of its 195 stores are located in Michigan and the company overall generates 14.25 Billion in revenues. This business is private and still is family owned. Their competitive advantage lies in pricing, high quality private label products, and economies of scale through its Midwestern supply chain.
Kroger is an American retailer operating 2,460 supermarkets in the United States with 134 stores located in Michigan.
Wal-Mart is the world's leader in retail and grocery stores. They are heavily reliant on Chinese imports for their retail segment and favorable exchange rates. However 50% of their revenues are tied to grocery sales, and thus are a big competitor for Spartan Stores in Michigan. Wal-Mart Supercenters carry over 100,000 SKUs while Sam's Clubs carry 4,900 SKUs. 
Costco operates retail membership based warehouses, with high turnover, high volume, low cost inventory. Costco only carries 3,900 SKUs on average which keeps turnover high. Costco operates 11 stores in Michigan.
Operating income for 2010 was carried by SPTN's distribution segment(as well as in revenue), suggesting that at least in 2010 it was more profitable to service other customers instead of being the point of sale retailer.
SPTN has increased gross margins every year, yet that hasn't translated into net earnings which decreased during the same period.
|Percentage of Net Sales (%)|
|Restructuring and asset impairment costs||0.2||-||-|
|Other income and expenses||0.6||0.5||0.6|
|Earnings from continuing operations||1.0||1.4||1.2|
|(Loss) earnings from discontinued operations, net of taxes||0.0||0.0||0.1|
Customers have a high level of bargaining power. There is virtually no cost to switch from SPTN to one of its competitors. SPTN does differentiate between its competitors through tailoring their stores to each market’s tastes and branding itself as a unique and niche store to its demographic region.
SPTN owns its distribution network, so its exposure to bargaining is through its raw inputs: labor and goods sold.SPTN doesn’t have the bargaining power of Wal-Mart because of its relatively small sales volume and therefore its suppliers are the market maker and SPTN
There is always the threat of new entrants to the grocery business, however businesses and go all the time. SPTN is an established company and has a reputation that a new entrant would have to overcome this as well as SPTN’s competitors. Margins are thin in this industry which makes it less attractive to a potential entrant.
There is no substitute for food and water.
Competition is fierce in the grocer industry. Wal-Mart can enter a market and lower the prices by over 10%. SPTN relies on its edge in remaining a neighborhood centric and locally owned grocery store, without the headline risk that a company like Wal-Mart has. Also, SPTN is diversified in the sense that much of its operating income comes from distribution operations supplying some of its competition, buffering it from a decrease of market share.
Michigan businesses, and more susceptibly, razor thin margin grocers such as SPTN were hard hit by the Michigan Business Tax instituted by then governor Jennifer Granholm.
|Dennis Eidson||Chief Executive Officer, President, Director (2008)||1,689,170||Great Atlantic & Pacific Tea Company||66|
|David Staples||Chief Financial Officer, Executive Vice President (2000)||813,350||K-Mart||47|
|Alex DeYonker||Executive Vice President, General Counsel, Secretary (2006)||608,091||Warner Norcross & Judd LLP||60|