UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended January 2, 2016.December 29, 2018.

OR

For the transition period from              to             .

Commission File Number: 000-31127

SPARTANNASH COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Registrant’s telephone number, including area code: (616) 878-2000

Securities registered pursuant to Section 12(b) of the Securities Exchange Act:

Securities registered pursuant to Section 12(g) of the Securities Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨☒    No  x☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨☐    No  x☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☒    No  ¨☐

Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requirementrequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒    No  ¨☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, (as definedor emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act).

Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  x☒

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates based on the last sales price of such stock on the NASDAQ Global Select Market on July 18, 201513, 2018 (which was the last trading day of the registrant’s second quarter in the fiscal year ended January 2, 2016)December 29, 2018) was $1,197,681,942.$910,826,011.

The number of shares outstanding of the registrant’s Common Stock, no par value, as of February 26, 201625, 2019 was 37,285,140,35,952,014, all of one class.

DOCUMENTS INCORPORATED BY REFERENCE

Forward-Looking Statements

The matters discussed in this Annual Report on Form 10-K, in the Company’s press releases and in the Company’s website-accessible conference calls with analysts and investor presentations include “forward-looking statements” about the plans, strategies, objectives, goals or expectations of SpartanNash Company and subsidiaries (“SpartanNash” or “the Company”the “Company”). These forward-looking statements are identifiable by words or phrases indicating that SpartanNash or management “expects,” “anticipates,” “plans,” “believes,” or “estimates,” or that a particular occurrence or event “will,” “may,” “could,” “should”“should,” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook” or “trend” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. The Company’s asset impairment and restructuring cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. YouUndue reliance should not place undue reliancebe placed on these forward-looking statements, which speak only as of the date of the Annual Report, other report, release, presentation, or statement.

In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission (“SEC”), there are many important factors that could cause actual results to differ materially.

The These risks and uncertainties include general business conditions, changes in overall economic conditions that impact consumer spending, the Company’s ability to achieve salesintegrate acquired assets, the impact of competition and earnings expectations; improve operating results; continue to realize benefitsother factors which are often beyond the control of the merger with Nash-Finch Company, (including realizationand other risks listed in Part I, “Item 1A. Risk Factors,” of synergies); maintainthis report and risks and uncertainties not presently known to the Company or strengthen retail-store performance; assimilate acquired distribution centers and stores; maintain or grow sales; respond successfully to competitors including remodels and new openings; maintain or improve gross margin; effectively address food cost or price inflation or deflation; maintain and improve customer and supplier relationships; realize expected synergies from merger and acquisition activity; realize expected benefits of restructuring; realize growth opportunities; maintain or expand its customer base; reduce operating costs; sell on favorable terms assets held for sale; generate cash; continue to meet the terms of the Company’s debt covenants; continue to pay dividends, and successfully implement and realize the expected benefits of the other programs, initiatives, systems, plans, priorities, strategies, objectives, goals or expectations described in this Annual Report, the Company’s other reports, press releases and public comments will be affected by changes in economic conditions generally or in the geographic areas that the Company serves, adverse effects of the changing food and distribution industries, adverse changes in government funded consumer assistance programs, possible changes in the military commissary system, including those stemming from the redeployment of forces, congressional action, changes in funding levels, or the effects of mandated reductions in or sequestration of government expenditures, and other factors including, but not limited to, those discussed in the “Risk Factors” discussion in Item 1A of this Annual Report.

currently deems immaterial.

This section and the discussions contained in Item 1A,1A. “Risk Factors,” and in Item 7, subheading “Critical Accounting Policies” in this report, both of which are incorporated here by reference, are intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect the Company’s expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to SpartanNash or that SpartanNash currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this Annual Report.

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PART I

Item 1.Business

Overview

SpartanNash Company (together with its subsidiaries, “SpartanNash” or “the Company”the “Company”) is a leading multi-regional grocery distributor and grocery retailer and the largest distributor, by revenue, of grocery products to military commissaries in the United States. The Company’sFortune 400 company whose core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate owned retail stores, and military commissaries and exchanges and independent and corporate-owned retail stores primarily locatedexchanges. SpartanNash serves customer locations in 47 states andall 50 United States (“U.S.”), the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Bahrain, Djibouti and Egypt. Through its Military segment, the Company is the exclusive worldwide supplier of private brand products to U.S. military commissaries. The Company’s Retail segment operates supermarkets that have a “neighborhood market” focus to distinguish them from supercenters and limited assortment stores. The Company operates three reportable business segments: Military, Food Distribution, Military and Retail. For

The Company’s fiscal year end is the Saturday closest to December 31. The following discussion is as of and for the fiscal years ending or ended December 28, 2019 ("2019"), December 29, 2018 (“2018” or “current year”), December 30, 2017 (“2017” or “prior year”) and December 31, 2016 (“2016”), all of which include 52 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year ended January 2, 2016,end, may include the Company generated net sales of approximately $7.7 billion.New Year’s holiday.

Established in 1917 as a cooperative grocery distributor, Spartan Stores Inc. (“Spartan Stores”) converted to a for-profit business corporation in 1973. In January 1999, Spartan Stores began to acquire retail supermarkets in its focused geographic regions. In August 2000, Spartan Stores common stock became listed on the NASDAQ Stock Market under the symbol “SPTN.” On November 19, 2013, Spartan Stores merged with Nash-Finch Company (“Nash-Finch”). Nash-Finch’s core businesses include distributing food to military commissaries and independent grocery retailers and distributing to and operating corporate-owned retail stores. Following completion of the merger, the combined company iswas named SpartanNash Company. Unless the context otherwise requires, the use of the terms “SpartanNash,” “we,” “us,” “our” and “the Company”the “Company” in this Annual Report on Form 10-K refers to the surviving corporation SpartanNash Company and, as applicable, its consolidated subsidiaries.

The Company’s hybriddifferentiated business model supports the close functioning of its Military, Food Distribution, Military and Retail operations optimizingutilizes the natural complementscomplementary nature of each business segment while also enhancingand enhances the ability of the Company’s independent retailers to compete long term in the grocery industry.industry long-term. The model produces operational efficiencies, helps stimulate distribution product demand, and provides sharper visibility and broader business growth options. In addition, the Military,diversification of the Food Distribution, Military and Retail diversificationsegments provides added flexibility to pursue the best long-term growth opportunities in each segment.

SpartanNash has established key management priorities-2-

SpartanNash’s mission is to leverage our expertise in food distribution and retail to develop, activate and provide impactful solutions that exceed expectations for associates, customers and business partners. In addition, the Company strives to create value for the longer-term strategyCompany's shareholders, retailers, and customers. To support these objectives, the Company has the following priorities and strategies within its Food Distribution, Military, and Retail segments:

Food Distribution Segment:

Military Segment:

Retail Segment:

During the fiscal year ended January 2, 2016,2018, the Company opened one new retail store in Dickinson, North Dakota, acquired six stores in Bismarck and Mandan, North Dakota, completed seven major remodels, and completed many other limitedfive remodels. The Company also converted six corporate-owned retail stores to the Family Fare banner.

The Company expects to continue making progresstargeted capital investments during 2019 in connection with its capital investment program during fiscal 2016 by completing 13 major remodels,retail brand positioning initiative. Where opportunities arise, the Company may open new retail and by opening additional fuel centerscenter locations or enteringenter into partnerships with existing fuel center operations. The Company will continue to evaluate its store base and may close three or foursell stores duringin 2019 in line with its store rationalization initiatives.

In the coursefirst quarter of 2016. The2019 the Company evaluates proposed projects based on demographicsacquired Martin’s, a leading family-owned and competition within each geographic area, and prioritizes projects based on their expected returns on investment. Approval of proposed capital projects requires a projected internal rate of return that meets or exceedsoperated Midwest independent supermarket chain. This acquisition expanded the Company’s policy; however,corporate retail footprint into the adjacent regions of northern Indiana and southwestern Michigan. Martin’s was previously a Food Distribution segment customer of the Company, may undertake projects that do not meet this standard to the extent they represent required maintenance or necessary infrastructure improvements. In addition, the Company performsand SpartanNash’s and Martin’s merchandising, marketing, and operations teams have a post completion reviewhistory of financial results versus its expectationworking collaboratively on all majormany business improvement projects. The Company believes that focusing on such measures provides it with an appropriate level of discipline in its capital expenditures process.

Supply Chain Network

The Company has integratedcontinues to integrate its supply chain organization to further optimize the network, increase asset utilization and leverage programs that will drive more value for its shareholders, retailers, and customers. The Company believes its distribution facilities are strategically located to efficiently serve current customers, and also have the available capacity to support future growth.shareholders. The Company continually evaluates inventory movementreviews the optimization of its network and, assigns SKUsthrough doing so, has expanded Food Distribution operations in select facilities which were previously dedicated solely to appropriate areas within its distribution facilities to reduce the time required to stock and pick products and to achieve additional efficiencies.Military segment. 

The Company has several projects planned for the fiscal year ending December 31, 2016. These projects are designed to further integrate the Company’s supply chain capabilities across distribution centers and thereby increase efficiency of both inbound and outbound distribution operations. To demonstrate the Company’s commitment across the entire network, the Company has invested in uniformly branding all tractors with a new logo that embodies the Company’s tagline, “Taking Food Places.” Newly purchased trailers will also receive the new logo layout. Over the next two years, the Company plans to re-logo all existing trailers within the SpartanNash supply chain. This will allow the Company to increase asset utilization by sharing resources across all facility locations.

Supply Chain Functions. The Company’s distribution network is comprisedcomposed of 19 distribution centers, 7 of which primarily service the Military segment and 12 of whichare utilized to service the Food Distribution segment, withand Military segments. The distribution centers provide for approximately 9.18.6 million total square feet of warehouse space. The Company has new and ongoing initiatives to improve the efficiency of its supply chain through innovation, investments in technology and automation.

The Company operates a fleet of approximately 490with over 500 over-the-road tractors, 575450 dry vans, and 9601,000 refrigerated trailers.trailers and has begun adding a fleet of multi-temperature straight trucks to improve its delivery performance to its growing number of smaller format store customers. Through routing optimization systems, the Company carefully manages the millions ofmore than 64 million miles driven by its fleet drivesand third-party carriers annually servicing its military commissaries, exchanges, independent retailers, national account locationsretailers and corporate-owned supermarkets. The Company has also equipped some of its refrigerated trailers with a refrigeration unit that has the capability to run on electric standby, offering an economicalcorporate owned retail stores.

Reporting Segment Financial Data and environmentally friendly alternative to diesel fuel. The Company remains committedProducts

Refer to the ongoing investment requiredsegment information in the notes to maintain a best in class fleet while focusing on low cost, environmentally friendly solutions.

Products

The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The consolidated net sales includefinancial statements for additional information about the net sales of its Military segment, corporate-owned stores and fuel centers in its Retail segment and the net sales of its Food Distribution business, which excludes sales to affiliated stores.

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The following table presentsCompany’s sales by type of similar productproducts and services:

Reporting Segment Financial Data

More detailed information about the Company’s reporting segments can be found in Note 16 to the consolidated financial statements included in Item 8, which is herein incorporated by reference.services. All of the Company’s sales and assets are in the United States of America. Consolidated net sales include the net sales of its Food Distribution segment, which exclude sales to corporate owned retail stores, the net sales of its Military segment, and the net sales of its corporate owned retail stores and fuel centers in its Retail segment.

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Discontinued Operations

Certain of the Company’s Retail and Food Distribution and Retail segment operations have been recorded as discontinued operations. Discontinued operations consist of certain locations that have been closed or sold. Additional information may be found in Note 1 to the consolidated financial statements included in Item 8, which is herein incorporated by reference.

Marketing and Merchandising

General. The Company continues to align its marketing and merchandising strategies with current consumer behaviors by delivering initiatives centered on personalization, a multi-channel experience, value beyond price, affordable wellness, local focus, indulgence and healthdiscovery and wellness.social responsibility – all designed to enhance the shopping experience. During 2018, the Company continued to refresh its brand positioning for Family Fare, its primary retail banner, to incorporate these areas of focus and respond to evolving customer needs. These strategies seek to use consumer data and insights to deliver products, promotions, content and experiences to satisfy the consumer’s needs.

The Company believes that data from its “yes Rewards”“yes”™ loyalty program gives it competitive insight into consumer shopping behavior. This gives the Company the flexibility to adapt to rapidly changing conditions by making tactical and more effective adjustments to its marketing and merchandising programs. In fiscal 2015,As investments are made to remodel and/or rebanner various stores, the Company expanded its continues to roll out the “yes Rewards”™ program to certain Family Fare and Family Fresh Markets stores in the western geographic areas and also provided a digital coupon program to its independent retailers.  

The Company’s investment to further strengthenexpand its knowledge of the consumer has resulted in progress in several areas: robust self-serve data tool that enables it to make consumer centric merchandisingits customers and marketing decisions; the development of a customer strategy that will be used to guide its internal business processes and go-to market strategy; and the evolution of its customer segmentation that takes it beyond the purchase and transactional behavior to lifestyle. These accomplishments are building blocks and will ultimately enable the Company to provide a shopping experience that better meets the changing needs of the consumer.  

Through its numerous strategic partnerships, the Company is able to develop its enterprise approach to customer centricity; benefiting both its Retail and Food Distribution businesses. By harnessing its proprietary data, the Company is able to provide a set of tools and capabilities for the organization that enables the Company to provide its customers with a more relevant and personalized shopping experience. This effort also enablesloyalty rewards in additional markets. During fiscal 2019, the Company will also begin using artificial intelligence to continue to learn more aboutdevelop and optimize its best customers; develop strategies to enable long-term customer and supplier loyalty; deploy a more effective and efficient marketing spend; and ultimately make better business decisions.weekly circular.

The Company has been building tools and capabilities to enable relevant, personalized content across its marketing channels and focusing on expanding its digital, social and mobile capabilities. Mobile apps specific to each retail banner, provide consumers with the ability to view store ads, create shopping lists, shop via Fast Lane, clip coupons, and join virtual shopping clubs from their mobile device. The Company also implementedpiloted a number of capabilities that enables it to more effectively target consumersmobile self-checkout application, and more efficiently develop and execute campaigns. Thisexpanded its e-commerce platform. These enhancements will help the Company to further build longer-term customer loyalty through convenience and value, maintain efficient marketing spend and increase return on investment, improve its sales growth opportunities, and further strengthen its business position. As the Company continues to build these capabilities, along with its other strategies, the Company will continue to share its marketing and merchandising learnings and best practices across its wholesaleindependent customer base.  base within the Food Distribution segment.

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TheIn addition to sharing the expertise gained in its Retail operations, the Company also believes it can differentiatedifferentiates itself from its competitors by offering a full set of value-added support services from value added services into its Food Distribution segmentcustomers. These services, which are further described above, help the independent retailers to operate and compete effectively, and many of them are not offered by the inclusion ofCompany’s competition.

As the Company works to better differentiate its Retail stores and implement its refreshed brand positioning, the Company is selectively adding products and services to better meet customers’ changing needs. For instance, the Company is adding full service meat and seafood departments which include many items handmade in store, and has added produce preparation services, smokehouses, expanded beer and wine selections, and other offerings to enhance the customers’ experience. The Company has been refreshing its in-store messaging and décor. Signage and displays are being updated in departments such as pet products, laundry, and snacks in order to improve foot traffic in these aisles and drive sales. The Company continues to add fuel centers and Starbucks Coffeeor Caribou Coffee shops in some of its corporate-ownedcertain corporate owned retail stores. The Companystores, and also provides consumers with fuel purchase discounts onat fuel purchases atcenters through its fuel centers. In 2015, the Company began offering fuel programs in the western geographic areascorporate owned retail stores or by partnering with third party fuel centers. In addition, the Company also refined its fuel promotions and executed several pilots to further enhance its program and provide value to the customer.

The Company offers pharmacy services in 91 of its supermarkets and operates three free-standing pharmacy locations. The Company believes the pharmacy service offering in its supermarkets is an important part of the consumer experience. In its Michigan pharmacies, the Company offers free medications (antibiotics, diabetic medications and pre-natal vitamins) along with generic drugs for $4 and $10, and food solutions for preventative health and education for its customers. The Company has recently expanded these programs to a number of corporate-owned retail stores that have pharmacies in Minnesota and Nebraska.

As consumers increasingly emphasize health andaffordable wellness, the Company believes that it can be a provider and resource for products and services that will support their needs. In 2015,2018, the Company continued to expandexpanded its offerings and partnerships and undertook the following key initiatives. First, the Company continued to expand its “Living Well” conceptproduct offerings through store-within-a-store concepts and expanded product offerings.in-line merchandising concepts. Second, the Company established partnerships with health systems and providers to provide dietician-ledwellness specialist-led store tours to help educate consumers to make healthier food choices. Third, the Company increased its retail product offering and assortment for organic, gluten-free, meat-free, non-GMO products and other healthhealthier food options. Finally, the Company offers a best in class pharmacy program, including low cost generics and wellness options. Thefree diabetic and prenatal prescriptions.

In support of its commitment to local products and caring for the community and environment, the Company is also proud to work with local farmers and vendors to provide locally grown produce and products in many of its stores. The Company offers a significant selection of local products in many of its stores, well in excess of most of its competitors’ offerings. In some of its stores, the Company collects items from customers for recycling, and the Company has been recognized as a best-in-class recycler of its own waste. Also, in an effort to reduce costs and reduce its environmental footprint, the Company has many initiatives to reduce energy usage, including the installation of energy efficient lighting and refrigeration in its stores.

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Private Brands. SpartanNash currently markets and distributes over 7,100 totalprovides a best-in-class private brand items primarily underprogram, offering a full line of proprietary and licensed private brands in its corporate owned retail stores and its independent retailer customers, as well as partnering with DeCA in the following labels: Spartan design and Our Family; Top Care (health and beauty care); Tippy Toes (baby); Full Circle (organic and wellness); B-leve (premium bath and beauty); PAWS Premium (pet supplies); and Valu Time (value). The Companylaunch of its private brand program. SpartanNash believes that its private brand offerings are partsome of its most valuable strategic assets, demonstrated through customer loyalty and profitability.

The Company has workedcontinues to develop a bestinvest in class private brand program. The Company has added more than 1,000 total corporate brand productsimprovements to its consumer offerings inprivate brands by offering quality, value, and assortment, and believes the past year, and as a resultsuccess of realigning its private brand programbrands to reduce the numberbe of duplicative product offerings, the Company plans to introduce approximately 500 new total items in fiscal 2016 to round out its portfolio.vital importance. The Company’s products have been frequently recognized for excellence in packaging design and product development. These awards underscore

The Company continues to enhance its private brand programs for both independent customers and corporate owned retail stores, and in 2018, completed the launch of its Our Family® private brand into its Michigan stores. The transition from the Spartan™ brand to Our Family® provides the Company with a company-wide, national brand equivalent or better quality program, while allowing the Company to streamline its supply chain to deliver a larger variety of product offerings at a lower cost to consumers. Additionally, Eternal Oceans™ was launched as the Company’s continued commitmentsustainability initiative for seafood within the Open Acres™ brand. SpartanNash also launched a product declaration “free from” initiative, with a goal of assigning brand specific bullets alerting consumers of certain undesirable ingredients that have been eliminated from products, creating a “cleaner” product offering. The Company expects this program to providingcontinue and become core to the consumer with quality products at exceptional value.Company’s product development principles in all future development. The Company’s focus is and will continueCompany plans to be the pursuit ofintroduce approximately 350 additional new opportunities and expansion ofitems in 2019 throughout its private brand offerings to its customers.portfolio.

SpartanNash currently markets and distributes private brand items primarily under the following brands: Our Family® (national brand equivalent or better grocery products); Open Acres™ (fresh products); Top Care (health and beauty care); Tippy Toes (baby); Full Circle™ (organic and wellness); Culinary Tours™ (premium quality foods); PAWS Premium (pet supplies); Valu Time (value) Simply Done (non-food products); and Pure Harmony (premium pet food). SpartanNash is also the exclusive worldwide distributor of DeCA’s private brands, Freedom’s Choice® and Home Base®.

Competition

The Company’s Military, Food Distribution, Military and Retail segments operate in a highly competitive geographic areas,industry, which typically resultresults in low profit margins for the industry as a whole. The Company competes with, among others, regional and national grocery distributors, large chain stores that have integrated wholesale and retail operations, mass merchandisers, e-commerce providers, deep discount retailers, limited assortment stores and wholesale membership clubs, many of whom have greater resources than the Company. The Company also faces competition from rapidly growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet-based retailers and meal-delivery services.

The Food Distribution segment competes directly with a number of traditional and specialty grocery wholesalers and retailers that maintain or develop self-distribution systems for the business of independent grocery retailers. In addition, the Company’s independent customers face intense competition from supercenters, deep discounters, mass merchandisers, limited assortment stores, and e-commerce providers. The Company partners with its customers to help them compete effectively. The primary competitive factors in the Food Distribution business include price, service level, product quality, variety and other value-added services.

The Company is one of fewer than five distributors in the United States with annual sales to the DeCA commissary system in excess of $100 million that distributes products via the frequent delivery system. The remaining distributors that supply DeCA tend to be smaller regional and local providers. In addition, manufacturers contract with others to deliver certain products, such as baking supplies, produce, delidelicatessen items, soft drinks and snack items, directly to DeCA commissaries and service exchanges. Because of the narrowlow margins in this industry, it is of critical importance for distributors to achieve economies of scale, which is typically a function of the density or concentration of military bases within the geographic area(s) a distributor serves. As a result, no single distributor in this industry, by itself, has a nationwide presence. Rather, distributors tend togenerally concentrate on specific regions, or areas within specific regions, where they can achieve critical mass and utilize warehouse and distribution facilities efficiently. In addition, distributors that operate larger non-military specific distribution businesses tend to compete for DeCA commissary business in areas where such business would enable them to more efficiently utilize the capacity of their existing distribution centers. The Company believes the principal competitive factors among distributors within this industry are customer service, price, operating efficiencies, reputation with DeCA and location of distribution centers. The Company believes its competitive position is very strong with respect to all of these factors within the geographic areas where it competes.

The primary competitive factors in Despite the Food Distribution business include price, service,ongoing commissary sales challenges, the Company has been working diligently to realize opportunities and has expanded vendor relationships to new military bases and continues to roll out DeCA’s private brand product quality, variety and other value-added services.offerings. The Company believes its overall service level,that the private brand offering, when fully executed, will help drive more traffic and business into the commissaries as a whole. By providing a combination of national and private brand products, the commissaries are offering one-stop shopping for military consumers, which is defined as actual units shipped divided by actual units ordered, is among industry leaders in termsshould benefit all of performance.the constituents of the DeCA system.

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The principal competitive factors in the retail groceryRetail business include the location and image of the store; the price, quality and variety of the perishable products;fresh offering; and the quality, convenience and consistency of service. In addition to competing with traditional grocery stores, the Company competes with supercenters, deep discounters, mass merchandisers, limited assortment stores, and e-commerce providers. The Company believes it has developed and implemented strategies and processes that allow it to be competitive in its Retail segment.segment by providing convenience, customer experience, and the assortment consumers demand. The Company monitors planned competitorcompetitive store openings and uses established proactive strategies to respond to new competition both before and after the competitive store opening.openings. Strategies to react to competition vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing and sales focus. During the past three fiscal years, 13seven competitor supercenters opened in geographic areas in which the Company currently operates corporate-ownedcorporate owned retail stores with twoand one additional openingsopening is expected to occur during fiscal 2016.2019. As a result of these openings, the Company believes the majority of its supermarkets compete with one or more supercenters. The Company has continued to respond to growing competition from online and non-traditional retailers by adding options and services such as online ordering, curbside pick-up, and home delivery.

Seasonality

In certain geographic areas, the Company’s sales and operating performance for each reportable segment varies with seasonality. Many northern Michigan stores are dependent on tourism, and therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months. TheAll fiscal quarters are 12 weeks, except for the Company’s first quarter, consists ofwhich is 16 weeks and will usuallygenerally include the Easter holiday while all other quarters consist of 12 weeks each with theholiday. The fourth quarter includingincludes the Thanksgiving and Christmas holidays. Fiscal year ended January 3, 2015 contained 53 weeks; therefore,holidays, and depending on the fourth quarter of fiscal 2014 consisted of 13 weeks rather than 12 weeks. The transition fiscal year ended December 28, 2013 consisted of 39 weeks; therefore,end, may include the third and final quarter of the short year consisted of 15 weeks rather than 16 weeks.New Year’s holiday.

Suppliers

The Company purchases products from a large number of national, regional and local suppliers of name brand and private brand merchandise. The Company has not encountered any material difficulty in procuring or maintaining an adequate level of products to serve its customers. No single supplier accounts for more than 5% of the Company’s purchases. The Company continues to develop strategic relationships with key suppliers and believes this will prove valuable in the development of enhanced promotional programs and consumer value perceptions.

Intellectual Property

The Company owns valuable intellectual property, including trademarks, tradenames, and other proprietary information, some of which are of material importance to its business.

Technology

The Company’s information technology (“IT”) organization continues to integrateIn 2018, the Company focused on the continued standardization of its supply chain systems, fromenhancing the two merged companies. The plan is to consolidate onto a single set of systems. The integration has proceeded wellmanufacturing systems in its food processing operations and is approximately 60% complete. The integration will continue into fiscal 2017. During the last year there were additional projects completed which were unrelated to the integrationenhancement of the two companies.consumer digital presence in its corporate retail stores and technology solutions to support its growth with large customers. Additionally, there have been many projects to expand and update technologies in support of various business and operational needs, as detailed in the sections below.

Supply Chain. During fiscal 2015,2018, the Company continued to combine its Master Data Management systemscommenced an initiative to standardize customer, vendorthe order management system for the Food Distribution business, which included the areas of inventory management, distribution pricing and item information. The vendor portion is complete and the customer and item integration is still in process and will be completed in fiscal 2016.invoicing system. The Company completedalso began the consolidationinstallation of the procurementa new forecasting system and the standardization of the transportation maintenance management system in fiscal 2015. The Company completed 80% of its redesign and upgrade for the communications technology in support of the distribution center network. In the non-integration area, the Company completed a number of supply chain enhancement projects to support its Food Distribution business. The company also completed the implementation of the first phase of converting the Company’s independent customers to a new Business-to-Business technology.

Retail Systems. During fiscal 2015,The Company expanded e-commerce solutions through the Company substantially completed the standardizationcontinued growth of the legacy Nash-Finch retail locations with the Company’s standard point-of-sale (“POS”)Fast Lane, a curbside pick-up and delivery service available in store systems. The price modeling system was upgraded to support the addition of the legacy Nash-Finchits corporate owned retail stores. All locations feature curbside pickup and delivery is available in several markets. The Company also installed a new version of its loyalty systems in many of the remodeled legacy Nash-Finch retail locations. The Company continued with a multi-year customization effort for the major upgrade of its POS software. In the non-integration projects, the Company deployedreleased major upgrades to its consumer digital properties including kiosks, web sites and mobile applications.

Administrative Systems. During fiscal 2015,applications in 2018 and continued to enhance these systems throughout the Company completed the consolidation onto a single accounts payable system and its related workflow system. The first phase of a financial reporting and planning system was installed in fiscal 2015.year. The Company completed the consolidation ontoinstallation of a single internal web based communication and workflownew computer-assisted ordering system during fiscal 2015.for all stores in the Michigan region. This technology will be installed in all of the Company’s remaining retail locations in 2019. The Company is 90% complete withalso began a pilot program for a scan and bag application, which will enable customers to check out from their smart phone while they shop. Finally, the consolidation ontoCompany upgraded hardware to support Chip-and-PIN functionality in all retail fuel locations.

Manufacturing Systems. During 2018 the Company installed a single electronic data interface (“EDI”) system.manufacturing system in one of its food processing areas. The system installation in the remaining food processing area will be completed in 2019. The Company installed a quality control tracking system for use in its food processing and private brand operations which will supplement the Company’s food safety efforts.

Information Technology-9-

Administrative Systems and Infrastructure. The data center consolidation project (from fourcompany began the process of upgrading its financial systems and enhancing its human resource systems in 2018. The Company installed additional upgrades to its infrastructure in its primary and back up data centers to two data centers) began in fiscal 2015improve storage capacity, performance and is now 70% completeflexibility for disaster recovery and is expected to finish during the summer of fiscal 2016. In conjunction with this consolidation, the Company implemented major upgrades to its high performance processing and primary storage systems.non-stop processing.

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Associates

As of January 2, 2016,December 29, 2018, the Company employedemploys approximately 15,20014,000 associates, 8,500 of which are8,800 on a full-time basis and 6,700 of which are part-time.5,200 on a part-time basis. Approximately 1,300 associates, or 9%, of the total workforce, were represented by unions under collective bargaining agreements. The collective bargaining agreements thatcovering these associates will expire between April 20162019 and October 2017January 2022 or have been extended on their own terms and consisted primarilyhave a contemplated expiration date in February 2022. The Company successfully completed negotiations with union members of warehouse personnel and drivers at the Company’s Michigan, Ohio and Indianacollective bargaining agreement in the Lima distribution centers.center in early 2019. The Company considers its relations with its union and non-union associates to be good and havehas not had any material work stoppages in over twenty years.

Regulation

The Company is subject to federal, state and local laws and regulations concerning the conduct of its business, including those pertaining to the workforce and the purchase, handling, sale and transportation of its products. SeveralMany of the Company’s products are subject to federal Food and Drug Administration (“FDA”) and United States Department of Agriculture (“USDA) regulation. The Company believes that it is in substantial compliance, in all material respects, with the FDA, USDA and other federal, state and local laws and regulations governing its businesses.

Forward-Looking Statements

The matters discussed in this Item 1 include forward-looking statements. See “Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K.

Available Information

TheSpartanNash’s web address of SpartanNash web site is www.spartannash.com. The inclusion of the Company’s websiteweb address in this Form 10-K does not include or incorporate by reference the information on or accessible through the Company’s website, and the information contained on or accessible through those websites should not be considered as part of this Form 10-K. The Company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports (and amendments to those reports) filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 available on the Company’s web sitewebsite as soon as reasonably practicable after the Company electronically files or furnishes such materials with the SEC. Interested persons can view such materials without charge by clicking on “For Investors” and then “SEC Filings” on the Company’s web site.website. SpartanNash is a “large accelerated filer” within the meaning of Rule 12b-2 under the Securities Exchange Act.

Item 1A.Risk Factors

The Company faces many risks. If any of the events or circumstances described in the following risk factors occur, the Company’s financial condition or results of operations may suffer, and the trading price of the Company’s common stock could decline. This discussion of risk factors should be read in conjunction with the other information in this Annual Report on Form 10-K. All of these forward-looking statements are affected by the risk factors discussed in this item and this discussion of risk factors should be read in conjunction with the discussion of forward-looking statements, which appears at the beginning of this report.

Business and Operational Risks

The Company operates in an extremely competitive industry. Many of itsthe Company’s competitors are much larger than the Company and may be able to compete more effectively.

The Military segment faces competition from large national and regional food distributors as well as smaller distributors. Due to the narrow margins in the military food distribution industry, it is of critical importance for distributors to achieve economies of scale, which are typically a function of the density or concentration of military bases in the geographic area(s) a distributor serves and a distributor’s share of that geographic area. As a result, no single distributor in this industry, by itself, has a nationwide presence.

The Company’s Food Distribution and Retail segments compete with, among others,have many competitors, including regional and national grocery distributors, large chain stores that have integrated wholesale and retail operations, mass merchandisers, e-Commercee-commerce providers, deep discount retailers, limited assortment stores and wholesale membership clubs, manyclubs. The Company’s Military segment faces competition from large national and regional food distributors and smaller distributors. Many of whichthe Company’s competitors have greater resources than the Company. Some of the distribution and retail competitors are substantially larger and have greater financial resources and advantages than the Company, intensifying competition at the wholesale and retail levels.

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The effects of industryIndustry consolidation, and the expansion of alternative store formats, nontraditional competitors and e-commerce have resulted in, and continuecontributed to result in, market share losses for traditional grocery stores. In addition,The Company’s Food Distribution, Military and Retail segments are primarily focused on traditional retail grocery trade, which faces competition from faster growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet-based retailers and meal-delivery services. The Company expects these trends to continue. If the Company is facing increasing competition from nontraditional competitors and in alternative sales channels, including e-commerce. These trends have produced even stronger competition for the Company’s Retail business and for the independent customers of the Company’s Food Distribution business. To the extent the Company’s independent customers are acquired by one of the Company’s competitors or are not successful in competing with other retail chains and non-traditional competitors,these alternative channels, or growing sales by the Company’s Food Distributioninto such channels, its business will be affected. If the Company fails to implement strategies to respond effectively to these competitive pressures, its operatingor financial results couldmay be adversely affected by price reductions, decreased sales or margins, or loss of customer base.impacted.

This competition may result in reduced profit margins and other harmful effects on the Company and the Food Distribution customers that the Company supplies. Ongoing industry consolidation could result in loss of the Company’s existing customers and could confront its retail operations with competition from larger and better-capitalized chains in existing or new geographic areas. The Company may not be able to compete successfully in this environment.realize profitability from its Fresh Kitchen operations and may incur significant costs to support and onboard new business.

The Company’s businesses could be negatively affected if it fails to retain existing customers or attract a significant number of new customers.

Growing and increasing the profitabilityAs part of the Company’s distribution businesses is dependent in large measure upon its ability to retain existing customers2017 Caito Foods Service, Inc. (“Caito”) and capture additional distribution customers through its existing network of distribution centers, which enablesBlue Ribbon Transport, Inc. (“BRT”) acquisition, the Company to more effectively utilizeacquired a fresh cut and a new Fresh Kitchen facility that, at the fixed assets in those businesses. The Company’s ability to achieve these goals is dependent, in part, upon its ability to continue to provide a high leveltime of customer service, offer competitive products at low prices, maintain high levels of productivity and efficiency, particularlyacquisition, was in the process of integrating new customers into its distribution system,being constructed. The Fresh Kitchen had no history of operations, and offer marketing, merchandisingthe Company has experienced delays in achieving efficient levels of production volume and ancillary servicesrealizing the sales pipeline. The Company expects that provide valuethe Fresh Kitchen will not be profitable in the short-term, and there is no guarantee it will be profitable in the long-term. The Company continues to its independent customers.make investments of resources to support these businesses, which may result in significant ongoing operating expenses and may divert resources and management attention from other areas of the organization. If the Company fails to successfully integrate this business and develop new sales opportunities, it may not realize the benefits expected from the transaction and it may not perform to expectations.

The private brand program for U.S. military commissaries may not achieve the desired results.

In December 2016, the Defense Commissary Agency (“DeCA” or “the Agency”), which operates U.S. military commissaries worldwide, competitively awarded the Company the contract to support and supply products for the Agency’s private brand product program. Private brand products had not previously been offered in the Agency’s commissaries. Throughout the implementation and first two years of the program, the Company has invested and will continue to invest significant resources as it partners with DeCA to continue to expand the program, however there is no guarantee of its success. The Company expects that DeCA will face significant competition in each product category from national brands that are familiar to consumers. If the Agency is unable to execute these tasks effectively, itdrive traffic and business at the commissaries by offering one-stop shopping for military customers through a combination of both national and private brand offerings, then both DeCA and the Company may not be ableunable to attract a significant number of new customers, and attrition among its existing customer base could increase, either or both ofachieve expected returns from this program, which could have ana material adverse impacteffect on the Company’s revenue and profitability.

Growing and increasing the profitabilitybusiness. The success of the Company’s Retail business is dependent upon increasing its customer baseprogram will depend in the communities wherepart on factors beyond the Company’s corporate-owned retail stores are located. The Company plans to invest in redesigning somecontrol, including the actions of its corporate-owned retail stores into other formats in order to attract new customers. The Company’s results of operations may be adversely impacted if it is unable to attract a significant number of new retail customers.the Agency.

The Company may not be able to implement its strategy of growth through acquisitions or successfully integrate acquired businesses.

Part of the Company’s growth strategy involves selected acquisitions of additional distribution operations, and to a lesser extent, retail grocery stores, grocery store chainsstores. Given the recent consolidation activity and limited number of potential acquisition targets within the food industry, the Company may not be able to identify suitable targets for acquisition and may make acquisitions which do not achieve the desired level of profitability or distribution facilities. Becausesales. Additionally, because the Company operates in the Food Distribution business, future acquisitions of retail grocery stores could result in the Company competing with its independent grocery store customersretailers and could adversely affect existing business relationships with those customers. As a result, the Company may not be able to identify suitable acquisition candidates in the future, complete acquisitions or obtain the necessary financing. Accordingly,financing and this may adversely affect the Company’s ability to grow profitably. If the Company fails to successfully integrate business acquisitions and realize planned synergies, the business may not be ableperform to implement this part of its growth strategy or achieve expected results and long-term business goals as the success of its acquisitions will depend, in part, on whether the Company achieves the business synergies and anticipated cost savings in connection with these transactions and any future acquisitions.expectations.

Substantial operating losses may occur if the customers to whom the Company extends credit or for whom the Company guarantees loans or lease obligations fail to repay the Company.

In the ordinary course of business,From time to time, the Company extendsmay advance funds, extend credit including loans,and lend money to its Food Distribution customers,certain independent retailers and provides financial assistance to some customers by guaranteeing theirguarantee loan or lease obligations.obligations of certain customers. The Company also leases store sites for sublease to independent retailers. Generally, the Company’s loans and other financial accommodations are extended to small businesses that are unrelated and may have limited access to conventional financing. The Company also subleases retail properties and assigns retail property leases to third parties in the ordinary course of business. While the Company seeks to obtain security interest and other credit support in connection with these arrangements, but the financial accommodations the Company extends, such collateral may not be sufficient to cover itsthe Company’s exposure. Greater than expected losses from existing or future credit extensions, loans, guarantee commitments or sublease arrangements could negatively and potentially materially impact the Company’s operating results and financial condition.

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Changes in relationships with the Company’s vendor base may adversely affect its business, margins, and profitability.

The Company sources the products it sells from a wide variety of vendors. The Company generally does not have long-term written contracts with its major suppliers that would require them to continue supplying it with merchandise. The Company depends on its vendors for among other things, appropriate allocation of merchandise, assortments of products, operation of vendor-focused shopping experiences within its stores, and funding for various forms of promotional allowances. There has been significant consolidation in the food industry, and this consolidation may continue to the Company’s commercial disadvantage. Such changes could have a material adverse impact on the Company’s revenues and profitability. The Company cooperatively engages in a variety of promotional programs with its vendors. The Company manages these programs to maintain or improve margins and increase sales. A reduction or change in promotional spending could have a significant impact on profitability.

The Company depends heavily on its ability to purchase merchandise in sufficient quantities at competitive prices. The Company has no assurances of continued supply, pricing, or access to new products and any vendor could at any time change the terms upon which it sells to the Company or discontinue selling to the Company. Vendor supplies can be adversely affected by weather, food contamination, regulatory actions, labor supply, strikes, labor unrest or product vendor defaults or disputes that limit the Company’s ability to procure products for sale to customers.

Disruptions to the Company’s information technology systems, including security breaches and cyber-attacks, could negatively affect the Company’s business.

The Company has large, complex ITinformation technology (“IT”) systems that are important to its business operations. It also employs mobile devices, social networking and other online activities to connect with customers, associates, suppliers, and business partners. The Company receives, transmits, and stores many types of sensitive information, including consumers’ personal information, information belonging to vendors, business partners, and other third parties, and the Company’s proprietary, confidential, or sensitive information. As a result, the Company faces risks of security breaches, system disruption, theft, espionage, inadvertent release of information, and other technology-related disruptions. The Company could incur significant losses due to disruptions in its systems and business if it were to experience difficulties accessing data stored in its IT systems.any such event.

The Company gathers and stores sensitive information, including personal information about its customers and associates as well as proprietary information of its customers and vendors. Although the Company has implemented security programs and disaster recovery facilities and procedures, cyber threats evolve rapidly and are becoming more sophisticated. Despite the Company’s efforts to secure its information and systems, cyber attackers may defeat the security could be compromisedmeasures and compromise the personal information of consumers, vendors, business partners, associates and other sensitive information. Associate error, faulty password management or other problems may compromise the security measures and result in a breach of the Company’s information systems, systems disruptions, data theft or other criminal activity could occur.activity. This could result in a loss of sales or profits or cause the Company to incur significant costs to restore its systems or to reimburse third parties for damages.

As a merchant that accepts debit and credit cards for payment, the Company is subject to the Payment Card Industry (“PCI”) Data Security Standard (“DSS”), issued by the PCI Council. PCI DSS contains compliance guidelines and standards with regard to the Company’s security involving the physical and electronic storage, processing and transmission of individual cardholder data. By accepting debit cards for payment, the Company is also subject to compliance with American National Standards Institute data encryption standards, and payment network security operating guidelines. Despite the Company’s compliance with these standards and other information security measures, the Company cannot be certain that all of its IT systems are able to prevent, contain or detect any cyber-attacks or security breaches from known malware or malware that may be developed in the future. To the extent that any disruption results in the loss, damage or misappropriation of information, the Company may be adversely affected by claims from customers, financial institutions, regulatory authorities, payment card associations and others. In addition, the cost of complying with stricter privacy and information security laws and standards could be significant to the Company.

Threats to security or the occurrence of severe weather conditions, natural disasters or health pandemicsother unforeseen events could harm the Company’s business.

The Company’s business could be severely impacted by wartime activities, threats or acts of terrorism, severe weather conditions, natural disasters, or widespread health pandemics. Any of theseother events that could affect the warehouse and transportation infrastructure used by both the Company and its vendors to supply the Company’s warehouses, corporate-ownedcorporate owned retail stores, and MilitaryFood Distribution and Food DistributionMilitary customers. While the Company believes it has adopted commercially reasonable precautions, insurance programs, and contingency plans; the damage or destruction of or substantial damage to,Company facilities could compromise its distribution centers and corporate-owned retail stores due to natural disaster, severe weather conditions, accident, terrorism, or other causes could substantially compromise the Company’s ability to distribute products orand generate sales at its corporate-owned retail stores. Additionally, unseasonably adverse climaticsales. Unseasonable weather conditions that impact growing conditions and the cropsavailability of food producers could also adversely affect the availability or cost of certain products. Any of the above events could result in a loss of sales, profits and asset value.values.

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Impairment charges for goodwill or other intangiblelong-lived assets could adversely affect the Company’s financial condition and results of operations.

The Company is required to perform an annual impairment test for goodwill and indefinite-livedother long-lived tangible and intangible assets in the fourth quarter of each year, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or – for goodwill – the Company’s stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of the Company’s future performance, may affect the fair value of goodwill or other intangible assets. This could result in the Company recording a non-cash impairment charge for the difference between the carrying value and implied fair value of the goodwill or other intangible assets in the period the determination of impairment is made. The Company cannot accurately predict the amount and timing of any impairment of assets. Should the value of goodwill or other intangible assets become impaired, the Company’s financial condition and results of operations may be adversely affected.

The CompanyIt may be difficult for the Company to attract and retain well-qualified associates, which would adversely affect the Company’s profitability and growth.

Recent low levels of unemployment have made it increasingly difficult to attract and retain qualified associates and have caused upward pressure on wages. If the Company is unable to successfully integrateattract and retain quality associates to meet its needs, the businesses of Spartan Stores and Nash-Finch and realize the anticipated benefits of the merger.

The merger involved the combination of two companies that formerly operated as independent public companies. The combined Company continuescould be required to devote significant management attention and resources to integrating the business practices and operations of Spartan Stores and Nash-Finch. The combined company may encounter complexities associated with managing the businesses of the combined company, in a seamless manner that minimizes adverse effectsincrease its compensation offering, reduce staffing below optimal levels, or rely more on customers, suppliers, associates and other constituencies. The Company’s future success depends, in part, upon its ability to address challenges related to the management and monitoring of the integrated operations of Nash-Finch and Spartan Stores and associated increased costs and complexity. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the merger.

The Company is expected to incur substantial expenses related to the continued integration of Spartan Stores and Nash-Finch.

The Company continues to incur substantial expenses in connection with the integration of Spartan Stores and Nash-Finch. There are a large number of processes, policies, procedures, operations, technologies and systems that have been or will be integrated. The Company continues to maintain an administrative presence in Grand Rapids, Michigan; Minneapolis, Minnesota; and Norfolk, Virginia. There are many factors beyond its control that could affect the total amount or the timing of the integration expenses. Many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. These integration expenses may continue to result in the combined company taking charges against earnings and the amount and exact timing of such charges are somewhat uncertain.

Restrictive covenants imposed by the Company’s credit facility and other factorshigher-cost third-party providers, which could adversely affect the Company’s ability to borrow.

The Company’s ability to borrow additional funds is governed by the terms of its credit facilities. The credit facilities contain financialprofitability and other covenants that, among other things, limit the Company’s ability to draw down the full amount of the facility, incur additional debt outside of the credit facility, create new liens on property, make acquisitions, or pay dividends. These covenants may affect the Company’s operating flexibility and may require it to seek the consent of the lenders to certain transactions that the Company may wish to effect. The Company is not currently restricted by these covenants. Disruptions in the financial markets have in the past resulted in bank failures. One or more of the participants in the credit facility could become unable to fund the Company’s future borrowings when needed. The Company believes that cash generated from operating activities and available borrowings under the credit facility will be sufficient to meet anticipated requirements for working capital, capital expenditures, dividend payments and debt service obligations for the foreseeable future. However, there can be no assurance that the business will continue to generate cash flow at or above current levels or that the Company will maintain its ability to borrow under its credit facility. The Company may not be able to refinance its existing debt at similar terms.

Maintaining the Company’s reputation and corporate image is essential to the Company’s business success.

The Company’s success depends on the value and strength of its corporate name and reputation. The Company’s name, reputation and image are integral to its business as well as to the implementation of its strategies for expanding its business. The Company’s business prospects, financial condition and results of operations could be adversely affected if its public image or reputation were to be tarnished by negative publicity including dissemination via print, broadcast or social media, or other forms of Internet-based communications. Adverse publicity about regulatory or legal action against the Company could damage its reputation and image, undermine its customers’ confidence and reduce long-term demand for its products and services, even if the regulatory or legal action is unfounded or not material to its operations. Any of these events could have a negative impact on the Company’s results of operations and financial condition.

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The Company may be unable to retain its key management personnel.

growth. The Company’s success depends to a significant degree upon the continued contributions of senior management. The loss of any key member of the Company’s management team may prevent it from implementing its business plans in a timely manner. The Company cannot assure that successors of comparable ability will be identified and appointed and that the Company’s business will not be adversely affected.

Market Risks-12-

The Company’s business is subject to risks from regional economic conditions, fuel prices, and other factors in its geographic areas.

The Company’s business is sensitive to changes in general economic conditions. In recent years, the United States has experienced volatility in the economy and financial markets due to uncertainties related to energy prices, availability of credit, difficulties in the banking and financial services sector, the decline in the housing market, diminished market liquidity, falling consumer confidence and high unemployment rates. These adverse economic conditions in its geographic areas, potential reduction in the populations in its geographic areas and the loss of purchasing power by residents in its geographic areas could reduce the amount and mix of groceries purchased, could cause consumers to trade down to less expensive mix of products or to trade down to discounters, all of which may affect the Company’s revenues and profitability.

Gasoline prices may affect consumer behavior and retail grocery prices. If petroleum prices rise in the future it may prompt consumers to make different choices in how and where they shop due to the high price of gasoline. Additionally, the impact of higher fuel costs is passed through by manufacturers and distributors in the prices of goods and services provided, again potentially affecting consumer buying decisions. This could have adverse impacts on retail store traffic, basket size and overall spending at both its corporate-owned and independent retail grocery stores.

In addition, many of the Company’s corporate-owned retail stores, as well as stores operated by its Food Distribution customers, are located in areas that are heavily dependent upon tourism. Unseasonable weather conditions and the economic conditions discussed above may decrease tourism activity and could result in decreased sales by the Company’s corporate-owned retail stores and decreased sales to stores operated by its Food Distribution customers, adversely affecting the Company’s revenues and profitability.

Economic downturns and uncertainty have adversely affected overall demand and intensified price competition, and have caused consumers to “trade down” by purchasing lower margin items and to make fewer purchases in traditional supermarket channels. Continued negative economic conditions affecting disposable consumer income such as employment levels, business conditions, changes in housing market conditions, increases in the cost of healthcare coverage, the availability of credit, interest rates, volatility in fuel and energy costs, food price inflation or deflation, employment trends in its geographic areas and labor costs, the impact of natural disasters or acts of terrorism, and other matters affecting consumer spending could cause consumers to continue shifting even more of their spending to lower-priced products and competitors. The continued general reductions in the level of discretionary spending or shifts in consumer discretionary spending to the Company’s competitors could adversely affect the Company’s growth and profitability.

Disruptions to worldwide financial and credit markets could potentially reduce the availability of liquidity and credit generally necessary to fund a continuation and expansion of global economic activity. A shortage of liquidity and credit in certain regions has the potential to lead to worldwide economic difficulties that could be prolonged. A general slowdown in the economic activity caused by an extended period of economic uncertainty could adversely affect the Company’s businesses. Difficult financial and economic conditions could also adversely affect its customers’ ability to meet the terms of sale or its suppliers’ ability to fully perform their commitments to the Company.

Macroeconomic and geopolitical events may adversely affect the Company’s customers, access to products, or lead to general cost increases which could negatively impact the Company’s results of operations and financial condition.

The impact of events in foreign countries, which could result in increased political instability and social unrest, and the economic ramifications of significant budget deficits in the United States and changes in policy attributable to them at both the federal and state levels, could adversely affect the Company’s businesses and customers. Adverse economic or geopolitical events could potentially reduce the Company’s access to or increase prices associated with products sourced abroad. Such adverse events could lead to significant increases in the price of the products the Company procures, fuel and other supplies used in the Company’s business, utilities, or taxes that cannot be fully recovered through price increases. In addition, disposable consumer income could be affected by these events, which could have a negative impact on the Company’s results of operations and financial condition.

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Inflation and deflation may adversely affect the Company’s operating results.

It is difficult to forecast whether fiscal 2016 will be a period of inflation or deflation. Food deflation could reduce sales growth and earnings, while food inflation, combined with reduced consumer spending, could reduce gross profit margins. If the Company experiences significant inflation or deflation, especially in the context of continued lower consumer spending, then the Company’s financial condition and results of operations may be adversely affected.

Legal, Regulatory and Legislative Risks

The Company’s Military segment operations areis dependent upon domestic and international military distribution.operations. A change in the military commissary system, including its supply chain, or a change in the level of governmental funding, could negatively impact the Company’s results of operations and financial condition.

Because the Company’s Military segment sells and distributes grocery products to military commissaries and exchanges in the United States and overseas, any material changes in the commissary system, the level of governmental funding to DeCA, military staffing levels, or the locations of bases, or DeCA’s supply chain may have a corresponding impact on the sales and operating performance of this segment. These changes could include privatization of some or all of the military commissary system, relocation or consolidation of commissaries and exchanges, base closings, troop redeployments or consolidations in the geographic areas containing commissaries and exchanges served by the Company, or a reduction in the number of persons having access to the commissaries and exchanges. Mandated reductions in the government expenditures, including those imposed as a result of a sequestration, may impact the level of funding to DeCA and could have a material impact on the Company’s operations.

Government regulation could harm the Company’s business.

The Company is subject If DeCA were to extensive governmental laws and regulations including, but not limited to, employment and wage laws and regulations, regulations governing the sale of pharmaceuticals, alcohol and tobacco, minimum wage requirements, working condition requirements, public accessibility requirements, citizenship requirements, environmental regulation, and other laws and regulations. A violation or change of these laws could have amake material effect on the Company’s business, financial condition and results of operations.

Like other companies that sell food and drugs, the Company’s corporate-owned retail stores are subject to various federal, state, local, and foreign laws, regulations, and administrative practices affecting its business. The Company must comply with numerous provisions regulating health and sanitation standards, facilities inspection, food labeling, and licensing for the sale of food, drugs, tobacco, and alcoholic beverages.

The Company cannot predict the nature of future laws, regulations, interpretations, or applications, or determine what effect either additional government regulations or administrative orders, when and if promulgated, or disparate federal, state, local, and foreign regulatory requirements will have on its future business. They could, however, require that the Company recall or discontinue sale of certain products, make substantial changes to its facilities or operations, or otherwise result in substantial increases in operating expense. Any or all of such requirements could have an adverse effect onsupply chain model, for example by limiting distribution authorization, then the Company’s results of operations and financial condition.

The Company is subject to state and federal environmental regulations.

Under various federal, state and local laws, ordinances and regulations, the Company may, as the owner or operator of its locations, be liable for the costs of removal or remediation of contamination at these current or former locations, whether or not the Company knew of, or were responsible for, the presences of such contamination. The failure to properly remediate such contamination may subject the Company to liability to third parties and may adversely affect its ability to sell or lease such property or to borrow money using such property as collateral.

Compliance with existing and future environmental laws regulating underground storage tanks may require significant capital expenditures and increased operating and maintenance costs.

The remediation costs and other costs required to clean up or treat contaminated sitesMilitary segment could be substantial. In the future, the Company may incur substantial expenditures for remediation of contamination that has not been discovered at existingaffected.

Product recalls or acquired locations. The Company cannot assure that it has identified all environmental liabilities at all of its current and former locations; that material environmental conditions not known to the Company do not exist; that future laws, ordinances or regulations will not impose material environmental liability on the Company; or that a material environmental condition does not otherwise exist as to any one or more of its locations. In addition, failure to comply with any environmental laws, ordinances or regulations or an increase in regulations could adversely affect the Company’s operating results and financial condition.

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Changes in accounting standards could materially impact the Company’s results.

Generally Accepted Accounting Principles (“GAAP”) and related accounting pronouncements, implementation guidelines, and interpretations for many aspects of the Company’s business, such as accounting for insurance and self-insurance, inventories, goodwill and intangible assets, store closures, leases, vendor and customer contracts, income taxes and share-based payments, are highly complex and involve subjective judgments. Changes in these rules or their interpretation could significantly change or add significant volatility to the Company’s reported earnings without a comparable underlying change in cash flow from operations.

Safetyother safety concerns regarding the Company’s products could harm the Company’s business.

The Company faces risks related to the safety of the food products that it manufactures, distributes, and sells. It is sometimes necessarymay need to recall such products for actual or alleged contamination, adulteration, mislabeling, or other safety concerns. The Company’s acquisition of Caito has expanded its food production capabilities and ability to offer fresh fruits and vegetables, fresh protein-based foods and complete meals. These products, and other food products that the Company sells, are at risk of contamination by disease-causing organisms such as Salmonella, E. coli, and others. These pathogens are generally found in nature, and as a result, there is a risk that they could be present in the products manufactured, distributed or sold by the Company. The Company typically has little control over proper food handling before the Company’s receipt of the product or once the product has been delivered to recall unsafe, contaminated or defective products.customers. Contamination risks may be controlled, although not eliminated, by good manufacturing practices and food safety programs. Recall costs can be materialmaterial. A widespread product recall could result in significant losses due to the administrative costs of a recall, the destruction of inventory, and lost sales. Recalls and other food safety concerns can also result in product liability claims, adverse publicity, damage to the Company might not be able to recover costs from its suppliers. Concerns regardingCompany’s reputation, and a loss of confidence in the safety and quality of food products sold by the Company could cause customers toits products. Customers may avoid purchasing certain products from the Company, or to seek alternative sources of supply for some or all of their food needs, even if the basis for concern is outside of the Company’s control. Any loss of confidence on the part of the Company’s customers would be difficult and costly to overcome. Any real or perceived issue regarding the safety of any food or drug items sold by the Company, regardless of the cause, could have a substantial and adverse effect on the Company’s business.

A number of the Company’s Food Distribution and Military segment associates are covered by collective bargaining agreements.agreements, and unions may attempt to organize additional associates.

Approximately 51%36% and 16%14% of the Company’s associates in its Food Distribution and Military business segments, respectively, are covered by collective bargaining agreements (“CBAs”) which expire between April 20162019 and October 2017.January 2022 or which the Company is in the process of negotiating and have a contemplated expiration date of February 2022. The Company expects that rising healthcare, pension and other employee benefit costs, among other issues, will continue to be important topics of negotiation with the labor unions. Upon the expiration of the Company’s collective bargaining agreements,CBAs, work stoppages by the affected workers could occur if the Company is unable to negotiate an acceptable contract with the labor unions. This could significantly disrupt the Company’s operations. Further, if the Company is unable to control healthcare and pension costs provided for in the collective bargaining agreements,CBAs, the Company may experience increased operating costs and an adverse impact on future results of operations.

Unions may attempt to organize additional associates.

While the Company believes that relations with its associates are good, the Company may continue to see additional union organizing campaigns. The potential for unionization could increase as any new related legislation or regulations are passed. The Company respects its associates’ right to unionize or not to unionize. However, the unionization of a significant portion of the Company’s workforce could increase the Company’s overall costs at the affected locations and adversely affect its flexibility to run its business in the most efficient manner to remain competitive or acquire new business and could adversely affect its results of operations by increasing its labor costs or otherwise restricting its ability to maximize the efficiency of its operations.

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Costs related to multi-employer pension plans and other postretirement plans could increase.

The Company contributes to the Central States Southeast and Southwest Pension Fund (“Central(the “Central States Plan” or “the Plan”the “Plan”), a multi-employer pension plan, based on obligations arising from its collective bargaining agreementsCBAs with Teamsters locals 406 and 908. SpartanNash does not administer or control this Plan, and the Company has relatively little control over the level of contributions the Company is required to make. Currently, the Central States Plan is underfunded and in critical and declining status, and as a result, contributions are scheduled to increase. The Company expects that contributions to this Plan will be subject to further increases. Benefit levels and related issues will continue to create collective bargaining challenges. The amount of any increase or decrease in its required contributions to this Plan will depend upon the outcome of collective bargaining, the actions taken by the trustees who manage the Plan, governmental regulations, actual return on investment of Plan assets, the continued viability and contributions of other contributing employers, and the potential payment of withdrawal liability should the Company choose to exit a geographic area, among other factors.

Under current law, an employer that withdraws or partially withdraws from a multi-employer pension plan may incur a withdrawal liability to the plan if it is underfunded. The assessed withdrawal liability represents the portion of the plan’s underfunding that is allocable to the withdrawing employer under very complex actuarial and allocation rules. Withdrawal liability may be incurred under a variety of circumstances, including selling, closing or substantially reducing employment at a facility. Withdrawal liability could be material, and potential exposure to withdrawal liability may influence business decisions and could cause the Company to forgo business opportunities. The Company is currently unable to reasonably estimate such liability. On December 13, 2014, Congress passed the Multi-employer Pension Reform Act of 2014 (“MPRA”). The MPRA is intended to address funding shortfalls in both multi-employer pension plans and the Pension Benefit Guaranty Corporation. Because the MPRA is a complex piece of legislation, its effects on the Plan and potential implications for the Company are not known at this time. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated.

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On September 25, 2015, Central States submitted a Rescue Plan to the United States Department of Treasury (“Department of Treasury”) as permitted under the provisions of the MPRA relating to plans in “critical and declining status.” Under the Rescue Plan, Trustees seek to suspend the pension benefits of retirees and actives in order to save the pension plan from future financial failure. The proposed Rescue Plan is tiered and intended to equitably distribute benefit suspensions across three participant classes: orphans, participants and UPS transfer group. Under the MPRA, the Department of Treasury has 225 days in which to consider and act on the proposed Plan. Following the Department of Treasury’s review, Plan participants will be afforded the opportunity to consider and vote on the proposed benefit suspensions. Given the Department of Treasury’s review period and the amount of time necessary for a participant vote, Central States estimates that the proposed benefit suspensions, if approved, would not take effect until July 1, 2016. The Company is currently unable to reasonably estimate the potential impact of this Rescue Plan on its withdrawal liability.

The Companyalso maintains defined benefit retirement plans for certain of its associates that do not participate in multi-employer pension plans. These plans are frozen. Expenses associated with the defined benefit plans may significantly increase due to changes to actuarial assumptions or investment returns on plan assets that are less favorable than projected. In addition, changes in the Company’s funding status could adversely affect the Company’s financial position.

Costs related to associate healthcare benefits are expected to continue to increase.

The Company provides health benefits for a large number of associates. The Company’s costs to provide such benefits continue to increase annually and recent legislative initiatives regarding healthcare reform have had a direct financial impact. However, the Company has carefully analyzed the costs of compliance with these initiatives and believes it has mitigated much of the impact through plan design and vendor negotiations. The Company will continue to stay abreast of these legislative changes and monitor their impact. Future legislative changes could negatively impact the Company’s financial condition and results of operations. In addition, the Company participates in various multi-employer health plans for its union associates, and the Company is required to make contributions to these plans in amounts established under collective bargaining agreements. The cost of providing benefits through such plans has escalated rapidly in recent years. The amount of any increase or decrease in the Company’s required contributions to these multi-employer plans will depend upon many factors, many of which are beyond its control. If the Company is unable to control the costs of providing healthcare to associates, it may experience increased operating costs, which may adversely affect the Company’s financial condition and results of operations.

Risks associated with insurance plan claims could increase future expenses.

The Company uses a combination of insurance and self-insurance to provide for potential liabilities for workers’ compensation, automobile and general liability, property insurance, director and officers’ liability insurance, and employee healthcare benefits. The liabilities that have been recorded for these claims represent the Company’s best estimate, using generally accepted actuarial reserving methods, of the ultimate obligations for reported claims plus those incurred but not reported for all claims incurred through January 2, 2016. Any actuarial projection of losses is subject to a high degree of variability. Changes in legal trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, and changes in discount rates could all affect the level of reserves required and could cause future expense to maintain reserves at appropriate levels.

Item 1B. Unresolved Staff Comments

None.

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Item 2.Properties

The following table lists the locations and approximate square footage of the Company’s facilitiesdistribution centers used inby its Military and Food Distribution segments.and Military segments as of December 29, 2018. The lease expiration dates for the Military segment range from August 2016 to November 2029, and fordistribution centers primarily servicing the Food Distribution segment range from July 2016November 2019 to July 2020. Most ofFebruary 2021, and for the leases in the Food DistributionMilitary segment have additional renewal option periods available.range from October 2023 to November 2029. The Company believes that these facilities are generally well maintained are generallyand in good operating condition, have sufficient capacity, and are suitable and adequate to carry on its business for each of these segments.

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The following table lists the Company’s retail stores, including the adjacent fuel centers of the related stores, by retail banner, number of stores, geographic regionlocation and approximate square footage under each banner.

banner as of December 29, 2018.

The Company also owns two additionalone fuel centerscenter that areis not reflected in the retail square footage above: a Family Fare Quick Stop in Michigan that is not included atwith a supermarket locationcorporate owned retail store but is adjacent to itsthe Company’s corporate headquarters and Sun Mart Express Gas in Fergus Falls, Minnesota.headquarters. Also not reflected in the retail square footage above areis one stand-alone pharmaciespharmacy located in Cannon Falls, Minnesota; Clear Lake, Iowa;Iowa. On December 31, 2018, the Company acquired Martin’s, which is a chain of 21 stores located in Indiana and Barron, Wisconsin.Michigan totaling 1.3 million square feet, of which 0.8 million is leased.

The Company’s service centers are located in Grand Rapids, Michigan; Minneapolis, Minnesota; and Norfolk, Virginia; and Indianapolis, Indiana; consisting of office space of approximately 286,100275,851 square feet in Company-owned buildings and 26,30033,000 square feet in leased facilities. The Company also leases two additional off-site storage facilities consisting of approximately 50,300 square feet. The Company owns and leases to independent retailers seven stores totaling approximately 370,000 square feet and owns and leases to third parties one warehouse of approximately 400,000 square feet and office space totaling 89,000 square feet.

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Item 3.   Legal Proceedings

TheFrom time-to-time, the Company is engaged from time-to-time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. Additionally, various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against the Company. While the ultimate effect of such actions, lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the Company’s consolidated financial position, operating results or liquidity.

Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against the Company. While the ultimate effect of such lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity. Legal proceedings, various lawsuits, claims, and other matters are more fully described in Note 89, Commitments and Contingencies, in the notes to the consolidated financial statements, in Item 8 of this report; this informationwhich is herein incorporated herein by reference.reference.

Item 4.Mine Safety Disclosure

Not ApplicableApplicable.

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PART II

Item 5.Market for Registrant’s Common Equity and Related Stockholder Matters

SpartanNash common stock is traded on the NASDAQ Global Select Market under the trading symbol “SPTN.”

Stock sale prices are based on transactions reported on the NASDAQ Global Select Market. Information on quarterly high and low sales prices for SpartanNash common stock for each of the last two fiscal years is as follows:

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At February 26, 2016,25, 2019, there were approximately 1,3401,300 shareholders of record of SpartanNash common stock. The Company has paid a quarterly cash dividend every quarter since the fourth quarter of fiscal 2006.

The table below outlines quarterly dividends paid on Spartan Stores and SpartanNash common stock in each of the last three fiscal years as well as the Board of Directors’ currently anticipated quarterly dividend:years:

Under its senior revolving credit facility, the Company is generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends, together with any cash distributions prepayments of the senior notes and share repurchases, do not exceed $25.0$35.0 million. Additionally, the Company is generally permitted to pay cash dividends and repurchase shares in excess of $25.0$35.0 million in any fiscal year so long as its Excess Availability, as defined in the senior revolving credit facility, is in excess of 10% of the Total Borrowing Base, as defined in the senior revolving credit facility, before and after giving effect to the prepayments, repurchases and dividends.

Although the Company expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors (the “Board”) to declare future dividends. Each future dividend will be considered and declared by the Board of Directors at its discretion. Whether the Board of Directors continues to declare dividends and repurchase shares depends on a number of factors, including the Company’s future financial condition, anticipated profitability and cash flows, and compliance with the terms of its credit facilities.  In May 2011,During the Boardfirst quarter of Directors2016, the Board authorized a five-year share repurchase program for up to $50 million of SpartanNash’s common stock. During the fourth quarter of 2017, the Board authorized an incremental $50 million share repurchase program expiring in 2022. As of December 29, 2018, $45.0 million remains available to be repurchased.

During the fiscal years ended January 2,2018, 2017 and 2016, and January 3, 2015, the Company repurchased 282,363952,108, 1,367,432, and 245,956396,030 shares of common stock for approximately $9.0$20.0 million, $35.0 million, and $5.0$9.0 million, respectively. The Company did not repurchase any shares under this program during the 39-week period ended December 28, 2013. The approximate dollar valuefourth quarter of shares that may yet to be purchased under the repurchase plan was $12.3 million as of January 2, 2016.2018.

The equity compensation plans table in Part III, Item 12 of this report is hereherein incorporated by reference.

There were no purchases of the Company’s own common stock during the last quarter of the fiscal year ended January 2, 2016.

Performance Graph

Set forth below is a graph comparing the cumulative total shareholder return on SpartanNash common stock to that of the Russell 2000 Total Return Index and the NASDAQ Retail Trade Index, over a period beginning March 26, 2011December 28, 2013 and ending on January 2, 2016.December 29, 2018.

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Cumulative total return is measured by the sum of (1) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (2) the difference between the share price at the end and the beginning of the measurement period, divided by the share price at the beginning of the measurement period.

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The dollar values for total shareholder return plotted above are shown in the table below:

The information set forth under the Heading “Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, except to the extent that the registrant specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act.

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Item 6.  Selected Financial Data

The following table provides selected historical consolidated financial information of SpartanNash for each of the five fiscal years and periods ended March 31, 2012January 3, 2015 through January 2, 2016. For comparability purposes,December 29, 2018, all of which were 52-week years with the Company has also provided selected historical consolidated financial information for the 51-week period ended December 28, 2013.exception of 2014 which was a 53-week year.