PROVIDENCE, R.I. — United Natural Foods, Inc. announced plans to terminate its contract as a distributor to Albertsons Companies, Inc. on Sept. 20, rather than on the original contract end date of July 31, 2016.
With 2,205 stores across 33 states, Boise, Idaho-based Albertsons Companies is the No. 2 supermarket retailer in the country and includes the Albertsons, Safeway and Eastern Supermarket chains. The company on July 8 filed for an initial public offering. Albertsons did not disclose how many shares it would offer or what those shares would cost, but did indicate it expected to raise $100 million.
For United Natural Foods’ fiscal year ending Aug. 1, revenue from Albertsons is expected to be approximately $410 million. United Natural Foods does not expect its current fiscal 2015 guidance to be affected by the announcement and anticipates taking a one-time charge reflecting severance and associated termination costs in the first quarter of fiscal 2016.
“We are disappointed to end our existing relationship with Albertsons,” said Steve Spinner, president and chief executive officer of United Natural Foods. “However, we believe that this course of action is in the best long-term interests of United Natural Foods as it will now allow us to redirect our resources to pursue our previously announced plans to expand our focus in fresh categories such as proteins and specialty cheeses across the country, grow our gourmet and ethnic business, and serve as an e-commerce solution for our customers. We plan to utilize the capital freed up from the termination of our Albertsons’ relationship to further pursue our strategic objectives, and we believe this will provide greater value for our shareholders long term.”United Natural Foods carries and distributes more than 80,000 products to more than 40,000 retail formats, including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel, throughout the United States and Canada.