UNFI Continues Supply Chain Transformation With Distribution Center in Pennsylvania

Leased 1.3M-square-foot facility to support growth in Mid-Atlantic market

3/30/2023

UNFI’s new distribution center features a lifestyle center aimed at improving retention and overall employee engagement through a more modern, associate-friendly workplace.

As a testament to its growth, United Natural Foods, Inc. (UNFI) is leasing a new 1.3 million-square-foot distribution center in Manchester, Pa., not far from one of its owned facilities in the city of York. According to UNFI, the capacity is needed to keep up with regional demand that has steadily accelerated over the past year and a half.

Under construction now, the temperature-controlled distribution center is expected to open mid-2024 and will feature some of the latest automated systems and features. In addition to accommodating UNFI’s widening assortment of products, the facility is being designed to meet the needs of company team members. Billed as an “associate-friendly workplace,” the building will include a lifestyle center designed to boost employee engagement and, hence, retention.

According to COO Erin Horvath – who joined UNFI in October as chief supply chain transformation officer and was promoted to COO in mid-March – UNFI had reasons for leasing instead of owning the building. “Leasing this facility allows us to best utilize our capital and manage company resources all while delivering on our transformation program, to enhance our distribution network by enabling our multi-echelon re-distribution strategy to effectively support our customer growth,” she explained. “Similar to several other UNFI facilities, this new distribution center will implement technology and automation solutions designed to enable greater network capacity, scalability, and profitability.”

The strategic move comes as UNFI is taking several steps to optimize its supply chain and distribution capabilities. As part of its previously-announced transformation, the company has invested in sites and technologies like AI to improve efficiencies that positively impact the shopper experience in retail stores. At the same time, and to Horvath's point, the organization is mindful of capital projects in the wake of a dip in profitability that caused UNFI to adjust its fiscal 2024 targets.

Currently, UNFI runs 56 distribution centers, many of which are undergoing some form of modernization.

Providence, R.I.-based UNFI delivers a wide variety of products to customer locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, e-commerce retailers and foodservice customers. The largest publicly traded grocery distributor in America, the company is No. 49 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.