A new year brings yet another corporate restructuring at UNFI. Earlier this month, the Providence-based distributor and retailer announced several steps it is taking to advance the company’s multi-year strategy focused on creating more customized value for its customers and suppliers and driving profitable growth.
In support of that strategy, UNFI will realign its commercial wholesale organization into two product-centered divisions – conventional grocery products and natural, organic, specialty and fresh products (NOSF) – while continuing to attempt to enhance its enterprise-wide commercial and supply chain capabilities.
Louis Martin, currently president of wholesale, will become president of conventional grocery products and UNFI chief commercial officer. Mark Bushway, currently chief supply chain officer, will become president of NOSF and become UNFI chief supply chain officer.
Each division will have focused sales teams aligned to the unique product and service needs of the 30,000 retail locations that UNFI serves. Both divisions will be supported by dedicated functional experts in merchandising, operations, procurement, and supplier services.
The company added that capability centers of excellence in areas including supply chain, professional and digital services, and private brands will work across the divisions to support sales leaders in building customized programs to help customers and suppliers accelerate their growth strategies.
Haven’t we seen this movie before?
In 2023, UNFI consolidated its wholesale business by reducing its regions from four to three nationally. That process impacted 150 jobs and certainly hasn’t helped UNFI become a better run company as perceived by its independent customers and its supplier network. Moreover, the bottom line still isn’t producing black ink.
Sandy Douglas, UNFI’s beleaguered CEO said, “This realignment is another step in the execution of our plan to add value and improve efficiency and effectiveness for our customers and suppliers. By empowering our commercial teams to provide a more customized product and service-centered experience, we intend to help our customers and suppliers differentiate, compete, and grow profitability through a more responsive, efficient and effective operating model.”
Mr. Douglas and I have differing views of perception and reality. To me, it’s clear that many of UNFI’s independent retail customers in the Mid-Atlantic believe the company’s performance on several levels continues to be subpar. Vendors, too, are frustrated by what they believe are exorbitant fees that negatively impact their return on investment (procurement, too, was restructured last year). And then there are those pesky earnings results.
UNFI net income has declined for 10 quarters in a row with net losses for the last six consecutive periods.
Measure this news anyway you’d like. The tangible results speak for themselves; the intangibles speak over louder.
‘Round The Trade
For the time being, Albertsons continues to post solid sales and earnings numbers as witnessed by their recently released Q3 results. For the 12-weeks ended November 30, the Boise-headquartered chain posted a same-store sales increase of 2 percent, an overall net revenue gain of 1.2 percent and a rise in digital sales of 23 percent versus the corresponding period in 2023. Profits also climbed from $361.4 million to $400.6 million.
In his call with financial analysts Sankaran was bullish in his review of the numbers and optimistic about Albertsons future. I wish I could share that optimism. If Albertsons doesn’t significantly improve the aforementioned “holy trinity” of huge challenges – enhancing store conditions, lowering everyday prices and improving associate morale, particularly in the stores – then its current run of good earnings will ultimately dissipate. As for Sankaran himself, I can’t see the former PepsiCo executive being part of the long-term solution. Sankaran’s corporate skills might have once been an asset in dealing with the financial markets, but not anymore. He’s not a merchant or an operator, so what can he possibly bring to the party now? And with his potential $43 million “parachute” package now a fleeting fantasy, what’s his motivation to stay?
And then there’s Costco where their mantra should be “what you see is what you get.” Their Q1 numbers, for the period ended November 24, continue to be superior against all comers. To wit: U.S. comp store sales (ex-fuel) increased 7.2 percent, its best performance in a year and worldwide revenue reached $61 billion a 7.5 percent increase. Earnings also jumped by 13 percent to $1.8 billion. In its analysts’ conference call, CEO Ron Vachris noted that opening day sales at its newest location which debuted November 27 in Pleasanton, CA were $2.9 million, a company record. Wow!
In the ailing and flailing retail drug world, the U.S. department of Justice has filed suit against CVS accusing the Woonsocket, RI health care company of unlawfully prescribing controlled substances and then seeking reimbursement from federal healthcare programs. The feds are charging that this practice continued for more than a decade. CVS responded by noting those prescriptions were issued by licensed practitioners and that they shouldn’t be held responsible. That the same defense that the big three drug chains, including Walgreens and Rite Aid, deployed in defending their role in other opioid-related legal cases. What a woeful bunch these drug chains are!
A tip of the hat to our buddy Christopher Brown, the former Nash Finch and C&S wholesale executive, who earlier this month was named president and CEO of Piggly Wiggly Alabama Distributing Co. (PWADC). He will replace the retiring Jerry McCann, who served the Bessemer, AL distributor for the past 36 years, the last three-and-a-half as president. In his new post, Brown, will work with about 250 independent stores in the “Yellowhammer State.” His lifetime experience of working with independent retailers that began with Richfood in 1990 and his familiarity with other Piggly Wiggly independents during his C&S tenure should serve him well.
Local Notes
Weis Markets has agreed to acquire Saylor’s Market, the one-store retailer based in Newville, PA. Saylor’s was founded in 1977 by Donald Saylor who over the past 47 years has expanded the original footprint from 6,000 square feet to its current 42,000 square foot size. When the deal is consummated shortly, the store will fly the Weis banner. This marks the second recent deal that the Sunbury, PA-based reginal chain has executed with a Central PA independent. Last fall Weis purchased Sunnyway Markets, a two-store operator with units in Chambersburg, PA and Greencastle, PA. Weis also announced that it has joined NationsBenefits, a provider of health supplement benefits and healthcare fintech solutions based in Plantation, FL.
It’s official, Michael Creedon has been named permanent CEO of Dollar Tree. Creedon joined the Chesapeake, VA-based discounter in 2022 (after a tour at Advance Auto Parts) and was elevated to interim chief executive when then-CEO Rick Dreiling stepped down for health reasons in November. It’s been a rough run for Dollar Free (Family Dollar) over the past few years, but with a recent Q3 surge in sales and earnings, Creedon’s got a real shot at turning things around.
Trader Joe’s, which has never had to turn things around, announced some of its 2025 store openings and among those on the early list in the Mid-Atlantic region are new TJ’s destined for Rockville, MD; Berwyn, PA; and Staten Island, NY. Not on the list but almost certain to open late this year or early ’26 are new stores on Wisconsin Avenue NW and Monroe Street NE, both in the District.
Kudos to Giant Food for reopening its Health Living (community) Center in its Alabama Avenue, store located in Southeast DC, one of the most arid of all food deserts in the entire region. The center originally opened in that supermarket in 2017 but closed at the start of the pandemic in early 2020. The reopened free space will serve as a health and wellness information center and will offer programs on nutritional education and financial literacy as well as being available for meetings for non-profit organizations. Good work by good people!
We’ve got several notable obituaries to report this month. Peter Yarrow, one of the founding members of the seminal folk singing group Peter, Paul & Mary (PP&M), passed away earlier this month at the age of 86. The trio was formed in 1960 at the beginning of the folk singing craze which impacted American culture at the time. The group was put together by Albert Grossman (who would also manage Bob Dylan) and within a year not only landed a major recording contract but also produced a number one album with cover song hits such as “Lemon Tree” and “If I Had a Hammer.” Those tunes were quickly followed by even a bigger hit in “Puff the Magic Dragon” (I’ve been told that the song is really about a magic dragon. Who am I to argue?). Even though the group’s popularity waned in the late 60s due to a generational resurgence of rock & roll (including the British invasion), PP&M recorded the John Denver song – “Leavin’ on a Jet Plane” – which went to number one in 1970. Later that year, the group disbanded and all three members launched solo careers. They would regroup to perform benefit concerts and even began touring a bit together until Mary Travers death in 2009. The remaining member of the trio, Noel Paul Stookey, continues to perform some live events. (And one stream of consciousness related moment – that’s not about a magic dragon). As an aside, if you’re a fan of the music of that era, then seeing the new Dylan film “A Complete Unknown” is a must. While you can pick apart several historical inaccuracies, the movie is informative and highly entertaining, and Timothee Chalamet as Bob is other worldly.
Greg Gumbel, 78, the cheerful sportscaster who career began in his native Chicago in 1972 has died. Gumbel’s low-key and professional approach help land him the job as host of the “NFL Today” (replacing Brent Musburger), the network’s industry-leading pre-game show. Later, Gumbel would also serve as pre-game host and play-by-play voice for other CBS televised sports including his long run as the main man for the network’s “March Madness” NCAA basketball coverage. Among his survivors are his younger brother Bryant, the former “Today” show host. Jim Nantz, still the “king” of CBS Sports, described his colleague this way: “Greg was your classic anchor – dependable, trustworthy and unflappable. He spent his career being the Greg Gumbel that you would meet on the street. You just happened to have had him in your living room as a friend for over four decades.”
Also leaving us was Rickey Henderson, arguably one the 10 greatest baseball players of all time. His statistics would bear that out, but his unusual personality certainly was a turnoff to some. However, the numbers speak for themselves. “Rickey” (as he would call himself) holds all-time major league records for runs scored (2,295), stolen bases (1,406 – including a record 130 swipes in 1983) and home runs by a leadoff hitter (81). Additionally, he had 3,055 hits, played for a remarkable 25 years, was the best defensive left fielder of his era and was named American League MVP in 1990. Henderson was elected to the MLB Hall of Fame in 2009. Along with his unbelievable talent, he was memorable for his flair for the game, his personality including his “snap catch” and referring to himself in the third party. In one of the great Rickey stories of all time, Henderson called San Diego Padres general manager Kevin Towers near the end of his career and expressed his desire to play for the team in 2001. Except he pitched his skills in a slightly different way – “Kevin, this is Rickey, calling on behalf of Rickey. Rickey wants to play baseball.” A true shining light on America’s Pastime, Henderson was only 65 when he died.
