Unified Grocers Posts FY2016 Net Sales Loss

Western U.S. wholesaler Unified Grocers Inc. has reported a decline in net sales during fiscal 2016, although its gross profit as a percentage of sales showed improvement.

During the year ended Oct. 1, 2016, Unified saw net sales drop from $4 billion to $3.8 billion, primarily due to the loss of business from Haggen’s Pacific Southwest (California, Arizona, Nevada) stores and meat deflation. But during the same period, gross profit as a percent of sales grew from 7 percent to 7.5 percent.

Additionally, Unified's operating income rose significantly over the prior year – $9 million compared to $1.8 million – due primarily to improved gross margins and a focus on warehouse efficiencies and expense control. This even takes into account the lower sales volume from the loss of the Haggen Southwest business, said Bob Ling, Unified president and CEO.

“2016 was a good year for Unified Grocers,” said Ling. “The year-end financials are in line with the company’s expectations. We accomplished what we set out to do from the beginning of the year, including the need to quickly wind down the Haggen Southwest business and normalize operations. … Looking at the bigger picture, there are many success stories around the organization. Our members now have access to a wide range of unique products through our membership in Topco, for example, and we successfully transitioned our Southern California dairy business through a preferred supplier arrangement with Dean Foods.”

Continued Ling: “In many ways, 2016 was a year of course corrections and establishing a solid foundation for growth. We have a strong leadership team in place, an energized group of associates, and a member base that’s investing in remodeling stores and opening new locations. I’m very optimistic about where we’re heading. All the important trends are going in the right direction and the fourth quarter was particularly encouraging in terms of establishing sales growth momentum.”

Commerce, Calif.-based Unified Grocers supplies independent retailers throughout the western United States.