Safeway Could Switch to UNFI: Report

SN STAFF

PLEASANTON, Calif. — Safeway here may be poised to shift its natural and specialty food business to United Natural Foods Inc., Providence, R.I.

According to Edward Aaron, a Denver-based analyst with RBC Capital Markets, Toronto, Safeway's contracts with the current distributors, Kehe Food Distributors/Tree of Life, Romeoville, Ill., and DPI Specialty Foods, Evanston, Ill., are expiring this summer, "and given its low-cost position and high service levels, we believe UNFI is emerging as the winner of this business."

If Safeway does switch to UNFI, Aaron said, the supplier would add as much as $250 million to $300 million worth of business, or an additional 7%, in incremental sales. Representatives at Safeway and UNFI could not be reached for comment.