United Natural Foods, Inc. today announced that its contract as a distributor to Albertsons Companies, Inc., which includes the Albertsons, Safeway and Eastern Supermarket chains, will terminate on September 20, 2015, rather than upon the original contract end date of July 31, 2016.
For the company's fiscal year ending Aug. 1, 2015, revenue from Albertsons is expected to be approximately $410 million. The company does not expect its fiscal fourth quarter financial results or its current fiscal 2015 guidance to be impacted by this announcement. The company anticipates taking a one-time charge reflecting severance and associated termination costs in the first quarter of fiscal 2016, which will be disclosed in September 2015 when the company reports its fourth quarter and full year 2015 results, and provides its fiscal 2016 guidance.
“We are disappointed to end our existing relationship with Albertsons,” said Steve Spinner, the company's president and chief executive officer. “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.”