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UNFI ‘working diligently’ to sell Cub Foods, Shoppers

Deals in the works for Shoppers; announcement on Cub expected early next year

Russell Redman

October 3, 2019

2 Min Read
Cub-Stillwater-front-of-store[1].jpg
Cub Foods

United Natural Foods Inc. (UNFI) said it’s making progress on efforts to divest former Supervalu Inc. supermarket chains Shoppers and Cub Foods.

UNFI Chairman and CEO Steven Spinner said yesterday the Providence, R.I.-based distributor expects to sell the remaining Shoppers stores and unveil a deal to sell Cub early next year. UNFI aims to sell Cub in its entirety and close a potential agreement by the end of fiscal 2020.

Combined, the two chains have 96 locations, including 52 Cub stores in Minnesota and Illinois and 44 Shoppers stores in Maryland and Virginia. A potential sale of Cub Foods would exclude 29 franchised Cub stores.

“We're working diligently to divest both Shoppers and Cub and have advisers fully engaged to push this forward. At Shoppers, we're working on several deals, each of which involves multiple stores, which increases the level of complexity and the tentative timeline, which experience suggests as subject to change and has us completing the Shopper sales early in calendar 2020,” Spinner told analysts late Wednesday in a conference call on fiscal 2019 results.

“At Cub, we are also in a process and expect to have something to announce early in calendar year 2020 as well,” he said. “In the interim, we're pleased with Cub's results and the work being led by a new leadership team within that organization.”

Related:Competitive edge will boost UNFI going forward, says CEO

Shoppers Food & Pharmacy store_exterior - Copy.jpg

In its fiscal 2020 forecast, UNFI is including the contribution from Cub but not Shoppers, according to John Howard, interim chief financial officer. Shoppers accounted for about $32 million of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in fiscal 2019, and that contribution will be removed from the fiscal 2020 projection, he said. UNFI isn’t disclosing the amount of Cub’s contribution.

“As for our retail banners, we're including Cub as part of our full-year outlook for fiscal 2020 adjusted EBITDA, EPS and adjusted EPS. Although we do expect to sell Cub this fiscal year, we are not including Shoppers in our outlook and believe its contribution prior to its assumed sale to be relatively small,” Howard explained in the call with analysts. “You'll recall sales from our retail banners are not included in reported net sales.”

Supervalu already was in the process of divesting its retail grocery business when UNFI closed its $2.9 billion acquisition of the company last October. Most recently, in late December, UNFI sold the Hornbacher’s chain to Coborn’s Inc., at the time leaving the distributor with 104 retail stores under the Cub and Shoppers banners.

Related:UNFI CFO Mike Zechmeister to depart

Last year, Supervalu sold most of its Farm Fresh stores to Harris Teeter, The Kroger Co. and Food Lion and most of its Shop ‘n Save stores to Schnuck Markets. Ahold Delhaize USA’s Giant/Martin’s grocery chain also acquired five Shop ‘n Save stores.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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