Unified Grocers truck Unified Grocers

Unified Grocers trims annual loss

Haggen bankruptcy, deflation nick sales; gross margins up

In what officials called “a year of course corrections,” cooperative wholesaler Unified Grocers saw annual sales decline due to the bankruptcy of Haggen, but trimmed its annual loss on cost controls and improved gross margins.

In a filing with the Securities and Exchange Commission Friday, the Los Angeles-based distributor said operating income for the fiscal year ended Oct. 1 totaled $9 million vs. $1.8 million in fiscal 2015, primarily due to improved gross margins and a focus on warehouse efficiencies and expense control. Net sales in the 52-week fiscal year declined by 6.6% to $3.8 billion as compared to the 53-week fiscal 2015.

The sales decline was primarily due to the loss of business from Haggen’s Pacific Southwest stores, which were closed or sold last year. Deflation in prices for meat also factored in the lower sales results, Unified said.

Unified posted a net loss of $7.6 million, down from last year’s $21.5 million loss.

Unified during the year ceased operating its milk, water and juice processing plant in favor of a direct vendor arrangement for those items with Dean Foods. It also joined Topco Associates, which is talking over sourcing on Unified private brands.

“In many ways, 2016 was a year of course corrections and establishing a solid foundation for growth, Bob Ling, Unified’s president and CEO, said in a release. “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.”

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