Providence, RI: United Natural Foods Inc. has signed a three-year distribution agreement with Safeway Inc.. A brief transition period from Safeway's current distributors is expected, which will coincide with the termination of the current distributors' distribution agreements.
United Natural Foods will assume distribution to all of Safeway's banners in the United States for non-proprietary natural, organic and specialty products effective October 2011. The company anticipates incremental annual volume from this contract will increase annual revenues by approximately 4 percent in fiscal 2012.
"We are pleased to establish a distribution relationship with Safeway and are excited about the opportunities this agreement provides," comments Sean Griffin, senior vice president, national distribution of United Natural Foods. "Our ability to continue to gain market share reflects the ongoing efforts by all of our associates to service our customers' needs and further strengthens our position as the nation's leading distributor of natural, organic and specialty products. We are in the process of finalizing a transition plan with Safeway in order to provide them with excellent service levels and support, while ensuring there are no disruptions to any of our existing customers."
"We are looking forward to our new partnership with UNFI to provide the variety of specialty, natural, organic, and regionally relevant products that will meet our customers' needs," says Kelly Griffith, Safeway's president of merchandising.
United Natural Foods will incur approximately $1.5 million – $2.5 million in total start-up expenses during the fourth quarter of fiscal 2011 and the first quarter of fiscal 2012 to transition this business. It is anticipated that approximately $0.5 million to $1.0 million in costs will occur in the fourth quarter of fiscal 2011, ended July 30, 2011, with the remaining costs being incurred in the first quarter of fiscal 2012.