UNFI Selling Off 13 Shoppers Food & Pharmacy Stores

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UNFI Selling Off 13 Shoppers Food & Pharmacy Stores

By Bridget Goldschmidt - 12/06/2019
UNFI Selling Off 13 Shoppers Food & Pharmacy Stores
According to UNFI CEO Steven Spinner, exiting the retail business will further accelerate the company's business transformation

United Natural Foods, Inc. (UNFI) has entered into definitive agreements to sell 13 of its 43 Shoppers Food & Pharmacy stores to three separate grocery operators, with each deal expected to close between mid-December and the end of February 2020, subject to customary closing conditions. In connection with the sales, Shoppers will wind down operations at these locations, including the sale of any remaining inventory and closure of the stores before they reopen under their new banners.

A spokesman for Providence, R.I.-based UNFI told Progressive Grocer, "The buyers have asked not to be named at this time, so out of respect for their wishes, we will let them make that announcement on their own timeframe."

Deep-discounter Lidl was identified as one of the buyers in a local report, however. A company spokeswoman confirmed the news to PG, noting, "We will be making significant investments in the redevelopment of these sites, and will have more share in terms of the grand-opening timeline at the end of next year."

The wholesaler will also close four additional Shoppers stores by the end of January 2020. The company opted not to renew the leases of the locations, while the fourth is being cancelled in an agreement with the landlord. Lanham, Md.-based Shoppers operates in the Baltimore; Washington, D.C.; and northern Virginia markets

The moves “[reflect] progress on our commitment to reduce UNFI’s retail footprint and [mark] another step toward transforming UNFI into North America’s premier food wholesaler,” noted Steven L. Spinner, the company’s chairman and CEO. “We believe that exiting the retail business will further accelerate our business transformation and allow us to more appropriately allocate resources toward long-term growth initiatives.”

Earlier this year, UNFI closed 30 Shoppers pharmacies located within the stores, selling the prescriptions and pharmacy inventories to CVS and Walgreens.

The 13 sold stores are in Baltimore (Alameda and Anchor Square locations), Annapolis, Brooklyn Park, California, Colmar Manor, Capitol Heights, Landover, Oxon Hill, Takoma Park, Waldorf and Wheaton Md.; and Burke, Va. The four closing locations are in Baltimore (Liberty Road) and Severn, Md., and Alexandria and Manassas, Va. The other Shoppers stores will remain open while UNFI continues to look for buyers.

The locations to be purchased by Lidl, whose U.S. headquarters is in Arlington County, Va., are in Annapolis, Brooklyn Park, Oxon Hill, Takoma Park, Wheaton and Burke, the company spokeswoman confirmed to PG.

Continued Spinner: “We will continue to wind down our retail footprint in a strategic and thoughtful manner to achieve the goals previously outlined. As we do this, we greatly appreciate the loyalty of our associates and the tremendous service they have provided to our customers.”

Under the deals, two of the buyers will enter into long-term agreements for UNFI to serve as the primary supplier of their acquired locations.

The Food Partners LLC, based in Bethesda, Md., advised UNFI on the transactions.

In response to the news of the store sales and closures, Landover, Md.-based United Food and Commercial Workers (UFCW) Local 400, which represents workers at the store, expressed shock, since "this announcement has come after more than a year of silence from the company on its plans," according to UFCW Local 400 President Mark Federici.

"Since UNFI acquired Shoppers, we have requested, insisted and demanded to be given information on the fate of these stores," continued Federici. "In response, we have been met with cold indifference. UNFI has refused to provide us with any assurances that the hardworking men and women who have dedicated their careers to this company won’t be left out in the cold."

He contended that the company still hasn't provided information regarding what will happen to employees and their families after the stores have been sold or closed.

UNFI delivers products to customer locations throughout North America, among them natural product superstores, independent retailers, conventional supermarket chains, ecommerce retailers and foodservice customers. Combined with Minneapolis-based Supervalu, which it acquired in 2018, UNFI is the largest publicly traded grocery distributor in the United States, and is No. 30 on PG’s 2019 Super 50 list of the top grocers in the United States.