United Natural Foods Annual Report 2013

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 3, 2013 oroTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-21531UNITED NATURAL FOODS, INC.(Exact name of registrant as specified in its charter)Delaware 05-0376157(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)313 Iron Horse Way, Providence, RI 02908(Address of principal executive offices)(Zip Code)Registrant's telephone number, including area code: (401) 528-8634Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, par value $0.01 per share NASDAQ Global Select MarketSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant'sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "largeaccelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated Filer oNon-accelerated Filer o (Do not check if a smaller reporting company)Smaller Reporting Company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No The aggregate market value of the common stock held by non-affiliates of the registrant was $2,592,922,470 based upon the closing price of the registrant's common stock on theNasdaq Global Select Market® on January 25, 2013. The number of shares of the registrant's common stock, par value $0.01 per share, outstanding as of September 9, 2013 was49,332,172. DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on December 18, 2013 are incorporated herein byreference into Part III of this Annual Report on Form 10-K.UNITED NATURAL FOODS, INC.FORM 10-KTABLE OF CONTENTSSectionPagePart I Item 1.Business1 Executive Officers of the Registrant10Item 1A.Risk Factors12Item 1B.Unresolved Staff Comments19Item 2.Properties19Item 3.Legal Proceedings20Item 4.Mine Safety Disclosures20 Part IIItem 5.Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities21Item 6.Selected Financial Data22Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations23Item 7A.Quantitative and Qualitative Disclosures About Market Risk35Item 8.Financial Statements and Supplementary Data37Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure66Item 9A.Controls and Procedures66Item 9B.Other Information66 Part IIIItem 10.Directors, Executive Officers and Corporate Governance67Item 11.Executive Compensation67Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters67Item 13.Certain Relationships and Related Transactions, and Director Independence68Item 14.Principal Accountant Fees and Services68 Part IVItem 15.Exhibits and Financial Statement Schedules69 Signatures70Table of ContentsPART I.ITEM 1. BUSINESSUnless otherwise specified, references to "United Natural Foods," "we," "us," "our" or "the Company" in this Annual Report on Form 10-K ("AnnualReport" or "Report") mean United Natural Foods, Inc. and all entities included in our consolidated financial statements. See the consolidated financialstatements and notes thereto included in "Item 8. Financial Statements and Supplementary Data" of this Report for information regarding our financialperformance.OverviewWe believe we are a leading distributor based on sales of natural, organic and specialty foods and non-food products in the United States and Canada,and that our twenty-seven distribution centers, representing approximately 6.5 million square feet of warehouse space, provide us with the largest capacity ofany North American-based distributor in the natural, organic and specialty products industry. We offer more than 65,000 high-quality natural, organic andspecialty foods and non-food products, consisting of national, regional and private label brands grouped into six product categories: grocery and generalmerchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and foodservice products and personal care items.We serve more than 31,000 customer locations primarily located across the United States and Canada which can be classified as follows:•independently owned natural products retailers, which include buying clubs;•supernatural chains, which consist solely of Whole Foods Market, Inc. ("Whole Foods Market");•conventional supermarkets and mass market chains; and•other, which includes foodservice and international customers outside of Canada.We were the first organic food distribution network in the United States designated as a "Certified Organic Distributor" by Quality AssuranceInternational, Inc. ("QAI"), an organic certifying agency accredited by the United States Department of Agriculture ("USDA"). This process involved acomprehensive review by QAI of our operating and purchasing systems and procedures. This certification covers all of our broadline distribution centers inthe United States, except our primarily specialty products distribution center in Leicester, Massachusetts. Four of our Canadian distribution centers arecertified organic by either QAI or Ecocert Canada, while the remaining Canadian distribution center sells only Kosher foods and is therefore not certifiedorganic.Since the formation of our predecessor in 1976, we have grown our business both organically and through acquisitions which have expanded ourdistribution network, product selection and customer base. Since fiscal 2003, our net sales have increased at a compounded annual growth rate ("CAGR") of16.0%. In recent years, our sales to existing and new customers have increased through the continued growth of the natural and organic products industry ingeneral; our efforts to increase the number of conventional supermarket customers to whom we distribute products; increased market share through our high-quality service and broader product selection, including specialty products, and the acquisition of, or merger with, natural organic, and specialty productdistributors; the expansion of our existing distribution centers; the construction of new distribution centers; the introduction of new products and thedevelopment of our own line of natural and organic branded products. Through these efforts, we believe that we have broadened our geographic penetration,expanded our customer base, enhanced and diversified our product selection and increased our market share.We have been the primary distributor to Whole Foods Market for more than fifteen years. Effective June 2010, we amended our distribution agreementwith Whole Foods Market to extend the term of the agreement to September 25, 2020. Under the terms of the amended agreement, we will continue to serve asthe primary wholesale natural grocery distributor to Whole Foods Market in its United States regions where we were serving as the primary distributor at thetime of the amendment. In July 2010, we announced that we had entered into an asset purchase agreement under which we agreed to acquire certain assets ofWhole Foods Market Distribution, Inc. ("Whole Foods Distribution"), a wholly owned subsidiary of Whole Foods Market, previously used for their self-distribution of non-perishables in their Rocky Mountain and Southwest regions, and to become the primary distributor in these regions. We closed thistransaction in September 2010 in the case of the Southwest region and October 2010 in the case of the Rocky Mountain region. We amended our distributionagreement with Whole Foods Market effective October 11, 2010 to include these regions, and now serve as the primary distributor to Whole Foods Market inall of its regions in the United States.In June 2010, we acquired certain Canadian food distribution assets of the SunOpta Distribution Group business ("SDG") of SunOpta Inc.("SunOpta") (the "SDG assets"), through our wholly-owned subsidiary, UNFI Canada, Inc. ("UNFI Canada"), for cash consideration of $65.8 million.With the acquisition, we became the largest distributor of natural, organic and specialty foods, including kosher foods, in Canada. This was a strategicacquisition as UNFI Canada provided us with an immediate1Table of Contentsplatform for growth in the Canadian market. We have utilized this platform to further expand in the Canadian market, including through our acquisition ofsubstantially all of the assets of a specialty food distribution business in the Ontario market in November 2011 and our acquisition of substantially all of theassets of a dairy and cheese distribution business in the Ontario market in August 2012.Our ability to distribute specialty food items (including ethnic, kosher and gourmet products) has accelerated our expansion into a number of high-growth business markets and allowed us to establish immediate market share in the fast-growing specialty foods market. We have now integrated specialtyfood products and natural and organic specialty non-food items into all of our broadline distribution centers across the United States and Canada. Due to ourexpansion into specialty foods, over the past several fiscal years we have been awarded new business with a number of conventional supermarkets thatpreviously had not done business with us because we did not distribute specialty products. We believe that the distribution of these products enhances ourconventional supermarket business channel and that our complementary product lines continue to present opportunities for cross-selling.In June 2011, we entered into an asset purchase agreement with L&R Distributors, Inc. ("L&R Distributors") pursuant to which we agreed to sell ourconventional non-foods and general merchandise lines of business, including certain inventory related to these product lines. This divestiture was completed inthe first quarter of fiscal 2012 and has allowed us to concentrate on our core business of the distribution of natural, organic, and specialty foods and non-foodproducts. As a result of this divestiture, we recognized a non-cash impairment charge of $5.8 million related to land, building and equipment at our Harrison,Arkansas facility during the fourth quarter of fiscal 2011. During fiscal 2012, we recognized severance and other expenses related to this divestiture ofapproximately $5.1 million. In the fourth quarter of fiscal 2012, we sold the Harrison, Arkansas facility to a third party. See "Our Operating Structure—Wholesale Division" for further information regarding our distribution business.We are a Delaware corporation based in Providence, Rhode Island, and we conduct business through our various wholly owned subsidiaries. Weoperated twenty-seven distribution centers at 2013 fiscal year end, and we believe that our approximately 6.5 million square feet of distribution space provideus with the largest capacity of any distributor of natural, organic and specialty products in the United States or Canada.We operate thirteen natural products retail stores within the United States, located primarily in Florida (with two locations in Maryland and one inMassachusetts), through our subsidiary doing business as Earth Origins Market ("Earth Origins"). We also operate one natural products retail store inVancouver, British Columbia, doing business as Drive Organics. We believe that our retail business serves as a natural complement to our distributionbusiness because it enables us to develop new marketing programs and improve customer service. In addition, our subsidiary doing business as WoodstockFarms Manufacturing specializes in the international importation, roasting, packaging and distribution of nuts, dried fruit, seeds, trail mixes, granola,natural and organic snack items and confections.Our IndustryThe natural products industry encompasses a wide range of products including organic and non-organic foods, nutritional, herbal and sportssupplements, toiletries and personal care items, naturally-based cosmetics, natural/homeopathic medicines, pet products and cleaning agents. According toThe Natural Foods Merchandiser, a leading natural products industry trade publication, sales for all types of natural products were $99.1 billion incalendar 2012, a growth of $8.3 billion or approximately 9.1% from calendar 2011. According to the National Association for the Specialty Food Trade, aleading specialty food industry trade publication, sales in calendar 2012 were $85.9 billion, representing growth of 14.4% from calendar 2011. We believe thegrowth of the natural products industry is a result of the increasing demand by consumers for a healthy lifestyle, food safety and environmentalsustainability.Our Operating StructureOur operations are comprised of three principal operating divisions. These operating divisions are:•our wholesale division, which includes our broadline natural, organic and specialty distribution business in the United States, UNFI Canada,which is our natural, organic and specialty distribution business in Canada, Albert's Organics, Inc. ("Albert's"), which is a leading distributorwithin the United States of organically grown produce and non-produce perishable items, and Select Nutrition, which distributes vitamins, mineralsand supplements;•our retail division, consisting of Earth Origins, which operates our thirteen natural products retail stores within the United States; and2Table of Contents•our manufacturing division, consisting of Woodstock Farms Manufacturing, which specializes in the international importation, roasting, packagingand distribution of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, and our Blue Marble Brandsproduct lines.Wholesale DivisionOur broadline distribution business is organized into three regions—our Eastern Region, Western Region and our Canadian Region. We distributenatural, organic and specialty products in all of our product categories to customers in the Eastern and Midwestern portions of the United States through ourEastern Region and to customers in the Western and Central portions of the United States through our Western Region. Our Canadian Region distributesnatural, organic and specialty products in all of our product categories to all of our customers in Canada. As of our 2013 fiscal year end, our Eastern Regionoperated nine distribution centers, which provided approximately 3.0 million square feet of warehouse space, our Western Region operated eight distributioncenters, which provided approximately 2.8 million square feet of warehouse space and our Canadian Region operated five distribution centers, which providedapproximately 0.3 million square feet of warehouse space.Through Albert's, we distribute organically grown produce and non-produce perishables, such as organic milk, dressings, eggs, juices, poultry andvarious other refrigerated specialty items. Albert's operates out of four distribution centers strategically located throughout the United States, providingapproximately 0.3 square feet of warehouse space, and is designated as a "Certified Organic Distributor" by QAI.Through Select Nutrition, we distribute more than 15,000 health and beauty aids, vitamins, minerals and supplements from distribution centers inPennsylvania and California.Certain of our distribution centers are shared by multiple operations within our wholesale division.Retail DivisionWe operate thirteen natural products retail stores through Earth Origins within the United States, ten of which are located in Florida, two in Marylandand one in Massachusetts. We also operate a natural products retail store in Vancouver, British Columbia that is reflected within our wholesale division. Webelieve that our retail business serves as a natural complement to our distribution business because it enables us to see market trends, develop new marketingprograms and receive direct customer feedback.We believe our natural products retail stores have a number of advantages over their competitors, including our financial strength and marketingexpertise, the purchasing power resulting from group purchasing by stores within Earth Origins and the breadth of our product selection.We believe that we benefit from certain advantages in acting as a distributor to our natural products retail stores, including our ability to:•control the purchases made by these stores;•expand the number of high-growth, high-margin product categories, such as produce and prepared foods, within these stores; and•stay abreast of the trends in the retail marketplace, which enables us to better anticipate and serve the needs of our wholesale customers.Additionally, as the primary natural products distributor to our retail locations, we realize significant economies of scale and operating and buyingefficiencies. As an operator of natural products retail stores, we also have the ability to test market select products prior to offering them nationally. We canthen evaluate consumer reaction to the product without incurring significant inventory risk. We also are able to test new marketing and promotional programswithin our stores prior to offering them to our wholesale customer base.Manufacturing & Branded Products DivisionOur subsidiary, Woodstock Farms Manufacturing, specializes in the international importation, roasting, packaging and distribution of nuts, driedfruit, seeds, trail mixes, granola, natural and organic snack items and confections. We sell these items in bulk and through private label packagingarrangements with large health food, supermarket and convenience store chains and independent owners. We operate an organic (USDA and QAI) and kosher(Circle K) certified packaging, roasting, and processing facility in New Jersey.Our Blue Marble Brands portfolio is a collection of 15 organic, natural and specialty food brands representing more than 650 unique products. Wehave a dedicated team of marketing, supply chain and sales professionals that have a passion to energize our retail partners and provide consumers withaffordable Non-GMO foods. Our unique Blue Marble Brands products3Table of Contentsare sold through our wholesale division, third-party distributors and directly to retailers. Our Field Day® brand is primarily sold to customers in ourindependent natural products retailer channel ("independent retailers"), and is meant to serve as a private label brand for independent retailers to allow them tocompete with conventional supermarkets and supernatural chains which often have their own private label store brands.Our Competitive StrengthsWe believe we distinguish ourselves from our competitors through the following strengths:We are the market leader with a nationwide presence in the United States and Canada.We believe that we are the largest distributor of natural, organic and specialty foods and non-food products by sales in the United States and Canada,and one of the few distributors capable of meeting the natural, organic and specialty product needs of regional and local independent retailer customers,conventional supermarket chains, and the rapidly growing supernatural chain. The opening of our facility in Lancaster, Texas in September 2010 marked theextension of our distribution presence to a nation-wide level. The opening of a new larger Albert's facility in New Jersey in May 2013 has provided additionalspace to serve the growing New York City metropolitan market. The consolidation into a new, larger, facility in Aurora, Colorado in May 2013 will allow us toserve this growing market with greater operational efficiencies. We believe that our network of twenty-seven distribution centers (including five in Canada)creates significant advantages over smaller national and regional distributors. Our nationwide presence across the United States and Canada allows us to offermarketing and customer service programs across regions, offer a broader product selection and provide operational excellence with high service levels andsame day or next day on-time deliveries.We are an efficient distributor.We believe that our scale affords us significant benefits within a highly fragmented industry including volume purchasing opportunities and warehouseand distribution efficiencies. Our continued growth has allowed us to expand our existing facilities and open new facilities as we seek to achieve maximumoperating efficiencies, including reduced fuel and other transportation costs, and has created sufficient capacity for future growth. Recent efficiencyimprovements include the centralization of general and administrative functions, the consolidation of systems applications among physical locations andregions and the optimization of customer distribution routes, all of which reduced expenses. We have made significant investments in our people, facilities,equipment and technology to broaden our footprint and enhance the efficiency of our operations. Key examples in the last several years include the following:•In connection with the acquisition of the SDG assets in June 2010, we acquired five distribution centers which provided a nationwide presence inCanada with approximately 286,000 square feet of distribution space and the ability to serve all major markets in Canada.•In September 2010 we commenced operations at a new facility in Lancaster, Texas serving customers throughout the Southwestern United States,including Texas, Oklahoma, New Mexico, Arkansas and Louisiana.•In October 2010 we began operating the former Whole Foods Distribution center in Aurora, Colorado.•During July 2011 we completed the integration of specialty food products into our nationwide platform.•In May 2013 our Albert's division commenced operations at a new facility in Logan Township, New Jersey with 55,000 square feet of distributionspace to more efficiently serve our growing customer base on the East Coast, including the New York City metropolitan market.•In June 2013 we commenced operations at a new 540,000 square foot distribution center in Aurora, Colorado and consolidated all existing Auroraoperations including an Albert's location and off-site storage into one building.•In May 2013 we began construction of a distribution center in Sturtevant, Wisconsin, from which we expect to begin operations in the spring of2014.•In July 2013 we purchased land in Montgomery, New York to build a new distribution center from which we expect to commence operations in fiscal2015 and which will service the growing New York City metropolitan market and allow us to transfer certain routes from our York, Pennsylvania,Chesterfield, New Hampshire and Dayville, Connecticut distribution centers.We have extensive and long-standing customer relationships and provide superior service.Throughout the 37 years of our, and our predecessors' operations, we have developed long-standing customer relationships, which we believe are amongthe strongest in our industry. In particular, we have been the primary supplier of natural and organic products to the largest supernatural chain in the UnitedStates, Whole Foods Market, for more than 15 years. We believe a key driver of our strong customer loyalty is our superior service levels, which includeaccurate fulfillment of orders, timely product delivery, competitive prices and a high level of product marketing support. Our average4Table of Contentsbroadline distribution in-stock service level for fiscal 2013, measured as the percentage of items ordered by customers that are delivered by the requesteddelivery date (excluding manufacturer out-of-stocks and discontinued items), was approximately 97%. We believe that our high distribution service levels areattributable to our experienced inventory planning and replenishment department and sophisticated warehousing, inventory control and distribution systems.Furthermore, we offer next-day delivery service to a majority of our active customers and offer multiple deliveries each week to our largest customers, whichwe believe differentiates us from many of our competitors.We have an experienced, motivated management team.Our management team has extensive experience in the retail and distribution business, including the natural, organic and specialty product industries.On average, each of our eleven executive officers has over twenty years of experience in the retail, natural products or food distribution industry. Furthermore,a significant portion of our management-level employees' compensation is equity based or performance based, and, therefore, there is a substantial incentive tocontinue to generate strong growth in operating results in the future.Our Growth StrategyWe seek to maintain and enhance our position within the natural and organic industry in the United States and Canada and to increase our market sharein the specialty products industry. Since our formation, we have grown our business organically and through the acquisition of a number of distributors andsuppliers, which has expanded our distribution network, product selection and customer base. For example, we acquired our Albert's, UNFI Canada, EarthOrigins, Woodstock Farms Manufacturing, and specialty businesses.Beginning in fiscal 2009, our strategic plan has focused on increasing market share, particularly in our conventional supermarket channel. Thischannel typically generates lower gross margins than our independent retailer channel, but also typically has lower operating expenses. Our strategic plan alsoincludes the roll-out of new technology including a national warehouse management and procurement system upgrade. These steps and others are intended topromote operational efficiencies and further reduce our operating expenses to offset the lower gross margins we expect with increased sales to the conventionalsupermarket and supernatural channels.To implement our growth strategy, we intend to continue increasing our market share of the growing natural and organic products industry by expandingour customer base, increasing our share of existing customers' business and continuing to expand and further penetrate new distribution territories. We plan toexpand our presence within the specialty industry by offering new and existing customers a single wholesale distributor capable of meeting their specialty andnatural and organic product needs on a national or regional basis. Key elements of our strategy include:Expanding Our Customer BaseAs of August 3, 2013, we served more than 31,000 customer locations primarily in the United States and Canada. We plan to expand our coverage of thenatural and organic and specialty products industry by cultivating new customer relationships within the industry and by further developing our existingchannels of distribution, such as independent natural products retailers, conventional supermarkets, mass market outlets, institutional foodservice providers,buying clubs, restaurants and gourmet stores. With the coordinated distribution of our specialty products with our natural and organic products, we believethat we have the opportunity to continue gaining market share in the conventional supermarket channel as the result of our ability to offer an integrated andefficient distribution solution for our customers. We have gained new business from a number of conventional supermarket customers, including Giant-Landover, Giant Eagle, Shop-Rite, Kings and Safeway, partially as a result of our complementary product selection.Increasing Our Market Share of Existing Customers' BusinessWe believe that we are the primary distributor of natural and organic products to the majority of our natural products customer base, including to WholeFoods Market, our largest customer. We intend to maintain our position as the primary supplier for a majority of our customers, and to add to the number ofcustomers for which we serve as primary supplier by offering the broadest product selection in our industry at competitive prices. With the expansion ofspecialty product offerings, we believe that we have the ability to further meet our existing customers' needs for specialty foods and non-food products,representing an opportunity to continue to achieve our sales growth within the conventional supermarket, supernatural and independent channels.Continuing to Improve the Efficiency of Our Nationwide Distribution NetworkWe have invested more than $226 million in our distribution network and infrastructure over the past five fiscal years. We achieved a nationwidefootprint in September 2010 with the opening of our facility in Lancaster, Texas. Our Lancaster facility5Table of Contentswas the first facility to use our national supply chain platform and warehouse management system, and our Ridgefield, Washington facility began using thissystem in July 2012. We plan to implement this system throughout our network by the end of fiscal 2017 which we believe will further enhance the efficiencyof our network. Although our distribution network services all markets in the United States and Canada, we intend to continue to selectively evaluateopportunities to build or lease new facilities or to acquire distributors to better serve existing markets. We recently opened our new Aurora, Coloradodistribution center, and have begun work on new distribution centers in Racine, Wisconsin in the village of Sturtevant and Hudson Valley, New York, in thetown of Montgomery, with plans for a new distribution center in Northern California underway.Further, we will strive to continue to maintain our focus on realizing efficiencies and economies of scale in purchasing, warehousing, transportation andgeneral and administrative functions, which, combined with transportation expense savings and incremental fixed cost leverage, should lead to continuedimprovements in our operating margin.Expanding into Other Distribution Channels and Geographic MarketsWe believe that we will be successful in continuing to expand into the foodservice channel as well as further enhancing our presence outside of the UnitedStates and Canada. We will continue to seek to develop regional relationships and alliances with companies such as Aramark Corporation, the CompassGroup North America, and Sodexho Inc. in the foodservice channel and seek other alliances outside the United States and Canada.Continuing to Selectively Pursue Opportunistic AcquisitionsThroughout our history, we have successfully identified, consummated and integrated multiple acquisitions. Since fiscal 2000, we have successfullycompleted thirteen acquisitions of distributors, manufacturers and suppliers, two acquisitions of natural products retail stores and eleven acquisitions ofbranded product lines as of August 3, 2013. Subsequent to the end of the 2013 fiscal year, we completed one additional acquisition of a regional specialtydistributor, which will be integrated with our existing operations. We intend to continue to selectively pursue opportunistic acquisitions to expand the breadthof our distribution network, increase our efficiency, procure beneficial customer relationships or add additional products and capabilities.Continuing to Provide the Leading Distribution SolutionWe believe that we provide a leading distribution solution to the natural, organic and specialty products industry through our national presence, regionalpreferences, focus on customer service and breadth of product offerings. Our service levels, which we believe to be the highest in our industry, are attributableto our experienced inventory planning and replenishment department and our sophisticated warehousing, inventory control and distribution systems. See "—Our Focus on Technology" below for more information regarding our use of technology in our warehousing, inventory control and distribution systems.We also offer our customers a selection of inventory management, merchandising, marketing, promotional and event management services designed toincrease sales and enhance customer satisfaction. These marketing services, which primarily are utilized by customers in our independently owned naturalproducts retailers channel and many of which are co-sponsored with suppliers, include monthly and thematic circular programs, in-store signage andassistance in product display.Our CustomersWe maintain long-standing customer relationships with independently-owned natural products retailers, supernatural chains and supermarket chains. Inaddition, we emphasize our relationships with new customers, such as conventional supermarkets, mass market outlets and gourmet stores, which arecontinually increasing their natural product offerings. The following were included among our wholesale customers for fiscal 2013:•Whole Foods Market, the largest supernatural chain in the United States and Canada; and•conventional supermarket chains, including Safeway, Kroger, Wegmans, Stop & Shop, Giant-Landover, Giant Eagle, Hannaford, Food Lion,Bashas', Shop-Rite, Lowe's, Kings, Publix and Fred Meyer.Whole Foods Market is our only customer that represented more than 10% of total net sales in fiscal 2013, and accounted for approximately 36% of ournet sales. In 2010 we amended our distribution agreement with Whole Foods Market to extend the term of the agreement to September 25, 2020. Under theterms of the amended agreement, we now serve as the primary wholesale natural grocery distributor to Whole Foods Market in all of its regions in the UnitedStates.The following table lists the percentage of sales by customer type for the fiscal years ended August 3, 2013, July 28, 2012 and July 30, 2011:6Table of Contents Percentage of Net SalesCustomer Type 2013 2012 2011Independently owned natural products retailers 34% 35% 37%Supernatural chains 36% 36% 36%Conventional supermarkets and mass market chains 25% 24% 22%Other 5% 5% 5%We distribute natural, organic and specialty foods and non-food products to customers located in the United States and Canada, as well as to customerslocated in other foreign countries. Our total international sales, including those by UNFI Canada, represented approximately five percent of our business inboth fiscal 2013 and 2012. We believe that our sales outside the United States, as a percentage of our total sales, will expand as we seek to continue to grow ourCanadian operations.Our Marketing ServicesWe offer a variety of marketing services designed to increase sales for our customers and suppliers, including consumer and trade marketing programs,as well as programs to support suppliers in understanding our markets. Trade and consumer marketing programs are supplier-sponsored programs whichcater to a broad range of retail formats. These programs are designed to educate consumers, profile suppliers and increase sales for retailers, many of which donot have the resources necessary to conduct such marketing programs independently.Our consumer marketing programs include:•multiple monthly, region-specific, consumer circular programs, which feature the logo and address of the participating retailer imprinted on acircular that advertises products sold by the retailer to its customers. The monthly circular programs are structured to pass through the benefit of ournegotiated discounts and advertising allowances to the retailer, and also provide retailers with posters and shelf tags to coincide with each month'spromotions. We also offer a web-based tool which retailers can use to produce highly customized circulars and other marketing materials for theirstores.•quarterly coupon programs featuring supplier sponsored coupons, for display and distribution by participating retailers.•themed "Celebration" sales and educational brochures to drive sales and educate consumers. Brochures are imprinted with participating retailers'store logo and information.•a truck advertising program that allows our suppliers to purchase ad space on the sides of our hundreds of trailers traveling throughout the UnitedStates and Canada, increasing brand exposure to consumers.Our trade marketing programs include:•wholesale tri-annual catalogs, which serve as a primary reference guide and ordering tool for retailers.•a website for retailers with category management tools, retail staff development resources and other resources designed to help our customers succeed.•a variety of programs designed to feature suppliers and generate volume sales.•monthly specials catalogs that highlight promotions and new product introductions.•specialized catalogs for holiday promotions and to serve other customer needs.Our supplier marketing programs include:•ClearVue, an information sharing program designed to improve the transparency of information and drive efficiency within the supply chain. Withthe availability of in-depth data and tailored reporting tools, participants are able to reduce inventory balances with the elimination of forward buys,while improving service levels.•SIS, an information-sharing program that helps our suppliers better understand our customers' businesses, in order to generate mutually beneficialincremental sales in an efficient manner.•Growth Incentive programs, supplier-focused high-level sales and marketing support for selected brands, which foster our partnership by buildingincremental, mutually profitable sales for suppliers and us.We keep current with the latest trends in the industry. Periodically, we conduct focus group sessions with certain key retailers and suppliers to ascertaintheir needs and allow us to better service them. We also:•produce a quarterly report of trends in the natural and organic industry;•provide product data information such as best seller lists, store usage reports and easy-to-use product catalogs;•provide assistance with store layout designs; new store design and equipment procurement;7Table of Contents•provide planogramming, shelf and category management support;•offer in-store signage and promotional materials, including shopping bags and end-cap displays;•provide assistance with planning and setting up product displays;•provide shelf tags for products; and•provide a website on which retailers can access various individual retailer-specific reports and product information.Our ProductsOur extensive selection of high-quality natural, organic and specialty foods and non-food products enables us to provide a primary source of supply to adiverse base of customers whose product needs vary significantly. We offer more than 65,000 high-quality natural, organic and specialty foods and non-foodproducts, consisting of national brand, regional brand, private label and master distribution products, in six product categories: grocery and generalmerchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and food service products and personal care items.Our branded product lines address certain needs of our customers, including providing a lower-cost label known as Earth Day.We continuously evaluate potential new products based on both existing and anticipated trends in consumer preferences and buying patterns. Our RetailCategory Management and Supplier Relationship Management teams regularly attend regional and national natural, organic, specialty, ethnic and gourmetproduct shows to review the latest products that are likely to be of interest to retailers and consumers. We also utilize syndicated data as a compass to ensurethat we are carrying the right mix of product in each of our distribution centers. We make the majority of our new product decisions at the regional level andlook to carry those items through national distribution as we begin to spot an emerging trend or brand. We believe that our category review practices at the localdistribution center level allow our supplier relationship managers to react quickly to changing consumer preferences and to evaluate new products and newproduct categories regionally. Additionally, as many of the new products that we offer are marketed on a regional basis or in our own natural products retailstores prior to being offered nationally, this enables us to evaluate consumer reaction to the products without incurring significant inventory risk. Furthermore,by exchanging regional product sales information between our regions, we are able to make more informed and timely new product decisions in each region.We maintain a comprehensive quality assurance program. All of the products we sell that are represented as "organic" are required to be certified as suchby an independent third-party agency. We maintain current certification affidavits on all organic commodities and produce in order to verify the authenticity ofthe product. All potential suppliers of organic products are required to provide such third-party certifications to us before they are approved as suppliers.Our SuppliersWe purchase our products from more than 6,000 suppliers. The majority of our suppliers are based in the United States and Canada, but we alsosource products from suppliers throughout Europe, Asia, Central America, South America, Africa and Australia. We believe suppliers of natural and organicproducts seek to distribute their products through us because we provide access to a large and growing customer base across the United States and Canada,distribute the majority of the suppliers' products and offer a wide variety of marketing programs to our customers to help sell the suppliers' products.Substantially all product categories that we distribute are available from a number of suppliers and, therefore, we are not dependent on any single source ofsupply for any product category. In addition, although we have exclusive distribution arrangements and vendor support programs with several suppliers, noneof our suppliers account for more than 10% of our total purchases in fiscal 2013. Our largest supplier, Hain Celestial Group, Inc. ("Hain"), accounted forapproximately 5% of our total purchases in fiscal 2013. However, the product categories we purchase from Hain can be purchased from a number of othersuppliers.We have positioned ourselves as one of the largest purchasers of organically grown bulk products in the natural and organic products industry bycentralizing our purchase of nuts, seeds, grains, flours and dried foods. As a result, we are able to negotiate purchases from suppliers on the basis of volumeand other considerations that may include discounted pricing or prompt payment discounts. Furthermore, some of our purchase arrangements include the rightof return to the supplier with respect to products that we do not sell in a certain period of time. As described under "Our Products" above, each region isresponsible for placing its own orders and can select the products that it believes will most appeal to its customers, although each region is able to participate inour company-wide purchasing programs. Our outstanding commitments for the purchase of inventory were approximately $26.5 million as of August 3,2013.Our Distribution SystemWe have carefully chosen the sites for our distribution centers to provide direct access to our regional markets. This proximity allows us to reduce ourtransportation costs relative to those of our competitors that seek to service these customers from locations that are often several hundred miles away. Theopening of our Lancaster, Texas distribution center significantly reduced the miles driven associated with servicing the customers of that facility as many ofthose customers were previously8Table of Contentsserviced from our Aurora, Colorado facility. We believe that we incur lower inbound freight expense than our regional competitors, because our scale allows usto buy full and partial truckloads of products. Products are delivered to our distribution centers primarily by our fleet of leased trucks, contract carriers andthe suppliers themselves. When financially advantageous, we backhaul between vendors or satellite, staging facilities and our distribution centers using ourown trucks. Additionally, we generally can redistribute overstocks and inventory imbalances between distribution centers if needed, which helps to reduce outof stocks and to sell perishable products prior to their expiration date.We lease our trucks from national leasing companies such as Ryder Truck Leasing and Penske Truck Leasing, which in some cases maintain facilitieson our premises for the maintenance and service of these vehicles. Other trucks are leased from regional firms that offer competitive services.We ship certain orders for supplements or for items that are destined for areas outside of regular delivery routes through United Parcel Service and otherindependent carriers. Deliveries to areas outside the continental United States and Canada are typically shipped by ocean-going containers on a weekly basis.Our Focus on TechnologyWe have made significant investments in distribution, financial, information and warehouse management systems. We continually evaluate and upgradeour management information systems at our regional operations based on the best practices in the distribution industry to make the systems more efficient,cost-effective and responsive to customer needs. These systems include functionality in radio frequency inventory control, pick-to-voice systems, pick-to-lightsystems, computer-assisted order processing and slot locator/retrieval assignment systems. At our receiving docks, warehouse associates attach computer-generated, preprinted locator tags to inbound products. These tags contain the expiration date, locations, quantity, lot number and other information about theproducts in bar code format. Customer returns are processed by scanning the UPC bar codes. We also employ a management information system that enablesus to lower our inbound transportation costs by making optimum use of our own fleet of trucks or by consolidating deliveries into full truckloads. Ordersfrom multiple suppliers and multiple distribution centers are consolidated into single truckloads for efficient use of available vehicle capacity and return-haultrips. In addition, we utilize route efficiency software that assists us in developing the most efficient routes for our outbound trucks. We will continue the roll-out of our new national supply chain platform and warehouse management system, which was first launched in our new Lancaster, Texas facility inSeptember 2010 and in our Ridgefield, Washington facility in July 2012. We expect to complete the roll-out to all existing facilities by the end of fiscal 2017.Intellectual PropertyWe do not own or have the right to use any patent, trademark, trade name, license, franchise, or concession which upon loss would have a materialadverse effect on our results of operations or financial condition.CompetitionOur largest competition comes from direct distribution, whereby a customer reaches a product volume level that justifies distribution directly from themanufacturer in order to obtain a lower price. Our major wholesale distribution competitor in both the United States and Canada is KeHE Distributors, LLC("Kehe"), which acquired Tree of Life Distribution, Inc. ("Tree of Life") in 2010. In addition to its natural and organic products, Kehe distributes specialtyfood products and markets its own private label program. Kehe's subsidiary, Tree of Life, has also earned QAI certification. We also compete in the UnitedStates and Canada with over 200 smaller regional and local distributors of natural, organic, ethnic, kosher, gourmet and other specialty foods that focus onniche or regional markets, and with national, regional and local distributors of conventional groceries and companies that distribute to their own retailfacilities.We believe that distributors in the natural and specialty products industries primarily compete on distribution service levels, product quality, depth ofinventory selection, price and quality of customer service. We believe that we currently compete effectively with respect to each of these factors.Our natural products retail stores compete against other natural products outlets, conventional supermarkets and specialty stores. We believe thatretailers of natural products compete principally on product quality and selection, price, customer service, knowledge of personnel and convenience oflocation. We believe that we currently compete effectively with respect to each of these factors.Government Regulation9Table of ContentsOur operations and many of the products that we distribute in the United States are subject to regulation by state and local health departments, theUSDA and the United States Food and Drug Administration, which generally impose standards for product quality and sanitation and are responsible for theadministration of bioterrorism legislation. In the United States, our facilities generally are inspected at least once annually by state or federal authorities.The Surface Transportation Board and the Federal Highway Administration regulate our trucking operations. In addition, interstate motor carrieroperations are subject to safety requirements prescribed by the United States Department of Transportation and other relevant federal and state agencies. Suchmatters as weight and dimension of equipment are also subject to federal and state regulations.Our operations do not generally subject us to federal, provincial, state and local environmental laws and regulations. However, certain of our distributioncenters have above-ground storage tanks for hydrogen fuel, diesel fuel and other petroleum products, which are subject to laws regulating such storage tanks.We believe that we are in material compliance with all federal, provincial, state and local laws applicable to our operations.EmployeesAs of August 3, 2013, we had approximately 7,300 full and part-time employees, 432 of whom (approximately 5.9%) are covered by collectivebargaining agreements at our Edison, New Jersey, Leicester, Massachusetts, Iowa City, Iowa, Dayville, Connecticut and Auburn, Washington facilities. TheEdison, New Jersey, Leicester, Massachusetts, Iowa City, Iowa, Dayville, Connecticut and Auburn, Washington agreements expire in June 2014, March2014, June 2014, July 2014 and February 2017, respectively. During fiscal 2013, for the first time in the Company's history, we experienced a work stoppageby our unionized employees in Auburn Washington. However, we continue to believe that our relations with our employees are good.SeasonalityGenerally, we do not experience any material seasonality. However, our sales and operating results may vary significantly from quarter to quarter due tofactors such as changes in our operating expenses, management's ability to execute our operating and growth strategies, personnel changes, demand for naturalproducts, supply shortages and general economic conditions.Available InformationOur internet address is http://www.unfi.com. The contents of our website are not part of this Annual Report on Form 10-K, and our internet address isincluded in this document as an inactive textual reference only. We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reportson Form 8-K and all amendments to those reports filed or furnished pursuant toSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") available free of charge through our website as soon asreasonably practicable after we file such reports with, or furnish such reports to, the Securities and Exchange Commission.We have adopted a code of conduct and ethics that applies to our Chief Executive Officer, Chief Financial Officer and employees within our financeoperations, and sales departments. Our code of conduct and ethics is publicly available on our website at www.unfi.com and is available free of charge bywriting to United Natural Foods, Inc., 313 Iron Horse Way, Providence, Rhode Island 02908, Attn: Investor Relations. We intend to make any legally requireddisclosures regarding amendments to, or waivers of, the provisions of the code of conduct and ethics on our website at www.unfi.com. Please note that ourwebsite address is provided as an inactive textual reference only.Executive Officers of the RegistrantOur executive officers are elected on an annual basis and serve at the discretion of our Board of Directors. Our executive officers and their ages as ofOctober 1, 2013 are listed below:10Table of ContentsName Age PositionSteven L. Spinner 53 President and Chief Executive OfficerMark E. Shamber 44 Senior Vice President, Chief Financial Officer and TreasurerJoseph J. Traficanti 62 Senior Vice President, General Counsel, Chief Compliance Officer and Corporate SecretarySean F. Griffin 54 Senior Vice President, Group PresidentEric A. Dorne 52 Senior Vice President, Chief Information OfficerThomas A. Dziki 52 Senior Vice President, Chief Human Resource and Sustainability OfficerCraig H. Smith 54 Senior Vice President, National Sales and ServiceDonald P. McIntyre 58 Senior Vice President, National Supply Chain and StrategyDavid A. Matthews 48 Senior Vice President, National Sales, and President of UNFI InternationalThomas J. Grillea 57 Division PresidentChristopher P. Testa 43 President, Woodstock Farms Manufacturing and Blue Marble Brands Steven L. Spinner has served as our President and Chief Executive Officer and as a member of our Board of Directors since September 2008.Mr. Spinner served as the Interim President of our Eastern Region, after David Matthews became President of UNFI International in September 2010 and priorto the hiring of Craig H. Smith in December 2010. Prior to joining us in September 2008, Mr. Spinner served as a director and as Chief Executive Officer ofPerformance Food Group Company ("PFG") from October 2006 to May 2008, when PFG was acquired by affiliates of The Blackstone Group and WellspringCapital Management. Mr. Spinner previously had served as PFG's President and Chief Operating Officer beginning in May 2005. Mr. Spinner served asPFG's Senior Vice President and Chief Executive Officer—Broadline Division from February 2002 to May 2005 and as PFG's Broadline Division Presidentfrom August 2001 to February 2002. Mark E. Shamber has served as Senior Vice President, Chief Financial Officer and Treasurer since October 2006. Mr. Shamber previously served asour Vice President, Chief Accounting Officer and Acting Chief Financial Officer and Treasurer from January 2006 until October 2006, as Vice President andCorporate Controller from August 2005 to October 2006 and as our Corporate Controller from June 2003 until August 2005. From February 1995 until June2003, Mr. Shamber served in various positions of increasing responsibility up to and including senior manager within the assurance and advisory businesssystems practice at the international accounting firm of Ernst & Young LLP. Joseph J. Traficanti has served as our Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary since April 2009.Prior to joining us, Mr. Traficanti served as Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary of PFG fromNovember 2004 until April 2009. Sean F. Griffin has served as our Senior Vice President, Group President since June 2012, and Mr. Griffin served as our Senior Vice President,National Distribution from January 2010 to June 2012. Prior to joining us, Mr. Griffin was East Region Broadline President of PFG. In this role he managedover ten divisions and $2 billion in sales. Previously he served as President of PFG—Springfield, MA from 2003 until 2008. He began his career with SyscoCorporation in 1986 and has held various leadership positions in the foodservice distribution industry with U.S. Foodservice, Alliant Foodservice and SyscoCorporation. Eric A. Dorne has served as our Senior Vice President, Chief Information Officer since September 2011. Prior to joining us, Mr. Dorne was Senior VicePresident and Chief Information Officer for The Great Atlantic & Pacific Tea Company, Inc., the parent company of the A&P, Pathmark, SuperFresh, FoodEmporium and Waldbaum's supermarket chains located in the Eastern United States from January 2011 to August 2011, and Vice President and ChiefInformation Officer from August 2005 to January 2011. In his more than thirty years at The Great Atlantic & Pacific Tea Company, Mr. Dorne held variousexecutive positions including Vice President of Enterprise IT Application Management and Development, Vice President of Store Operations Systems andDirector of Retail Support Services. Thomas A. Dziki has served as our Senior Vice President, Chief Human Resource and Sustainability Officer since August 2010. Prior to August 2010,Mr. Dziki served as our Senior Vice President of Sustainable Development since January 2010, as our Vice President of Sustainable Development since June2009, and as National Vice President of Real Estate and Construction since August 2006. Prior to that time, Mr. Dziki had served as President of WoodstockFarms Manufacturing and Select Nutrition from December 2004 until August 2006, Corporate Vice President of Special Projects from December 2003 toNovember 2004 and as our Manager of Special Projects from May 2002 to December 2003. Prior to joining us, Mr. Dziki served as a private consultant to ourcompany, our subsidiaries, Woodstock Farms Manufacturing, Earth Origins, Albert's, and our predecessor company, Cornucopia Natural Foods, Inc., from1995 to May 2002.11Table of Contents Craig H. Smith has served as our Senior Vice, National Sales and Service since September 2013. From December 2010 to August 2013, Mr. Smithserved as our President of the Eastern Region. Prior to joining us, Mr. Smith was Atlantic Region President of U.S. Foodservice, a leading broadlinefoodservice distributor of national, private label, and signature brand items in the United States from May 2008 to December 2010. In his seventeen years atU.S. Foodservice, Mr. Smith held various executive positions including SVP Street Sales, North Region Zone President, Detroit Market President and BostonMarket President. Prior to U.S. Foodservice, Mr. Smith held several positions at food service industry manufacturer and distributor Rykoff-Sexton, Inc. from1982 until 1993. Donald P. McIntyre has served as our Senior Vice President, National Supply Chain and Strategy since September 2013. From July 2012 to August2013, Mr. McIntyre served as our President of the Western Region. Prior to joining us, Mr. McIntyre served as President and CEO of Claridge Foods fromMarch 2006 to January 2012. Mr. McIntyre also held several senior positions within subsidiaries of Sara Lee Corporation, including President and CEO ofSara Lee Coffee & Tea from April 2004 to March 2006, and CFO of Sara Lee Coffee & Tea from August 2002 to March 2004. David A. Matthews has served as our Senior Vice President, National Sales, since July 2012, and President of UNFI International with responsibilityfor our Canadian and other international operations since September 2010. From June 2009 to September 2010 he was our President of the Eastern Region.Prior to joining us, Mr. Matthews served as President and CEO of Progressive Group Alliance ("ProGroup"), a wholly owned subsidiary of PFG from January2007 to May 2009, as Chief Financial Officer of ProGroup from December 2004 to January 2007, and as Senior Vice President of Finance and Technology ofProGroup from July 2000 to December 2004. Thomas J. Grillea has served as our President of Earth Origins Market since May 2008 and President of Select Nutrition Distributors since September2007. Mr. Grillea also served as our President of Woodstock Farms Manufacturing from May 2009 to September 2012 and oversaw Blue Marble Brands fromSeptember 2010 to September 2012. Mr. Grillea served as our General Manager for Select Nutrition Distributors from September 2006 to September 2007.Prior to joining us, Mr. Grillea served in a management capacity for Whole Foods Market from 2004 through 2005, and in various management capacities forAmerican Health and Diet Centers and the Vitamin Shoppe from 1998 through 2003. Christopher P. Testa has served as our President, Woodstock Farms Manufacturing since September 2012 and President, Blue Marble Brands sinceAugust 2009. Prior to joining us, Mr. Testa served as Vice President of Marketing for Cadbury Schweppes Americas Beverages from August 2002 to May2005 and as CEO of Wild Waters, Inc. from May 2005 to August 2009.ITEM 1A. RISK FACTORSOur business, financial condition and results of operations are subject to various risks and uncertainties, including those described below and elsewherein this Annual Report on Form 10-K. This section discusses factors that, individually or in the aggregate, we think could cause our actual results to differmaterially from expected and historical results. Our business, financial condition or results of operations could be materially adversely affected by any ofthese risks.We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible topredict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertaintiesapplicable to our business. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Forward-LookingStatements."We depend heavily on our principal customer and our success is heavily dependent on our principal customer's ability to grow its business.Whole Foods Market accounted for approximately 36% of our net sales in fiscal 2013. We serve as the primary distributor of natural, organic andspecialty non-perishable products to Whole Foods Market in all of its regions in the United States under the terms of our amended distribution agreementwhich expires on September 25, 2020. Our ability to maintain a close mutually beneficial relationship with Whole Foods Market is an important element toour continued growth.The loss or cancellation of business from Whole Foods Market, including from increased distribution to their own facilities or closures of stores, couldmaterially and adversely affect our business, financial condition or results of operations. Similarly, if Whole Foods Market is not able to grow its business,including as a result of a reduction in the level of discretionary spending by its customers, our business, financial condition or results of operations may bematerially and adversely affected.12Table of ContentsOur operations are sensitive to economic downturns.The grocery industry is sensitive to national and regional economic conditions and the demand for the products that we distribute, particularly ourspecialty products, may be adversely affected from time to time by economic downturns that impact consumer spending, including discretionary spending.Future economic conditions such as employment levels, business conditions, interest rates, inflation rates, energy and fuel costs and tax rates could reduceconsumer spending or change consumer purchasing habits. Among these changes could be a reduction in the number of natural and organic products thatconsumers purchase where there are non-organic, which we refer to as conventional, alternatives, given that many natural and organic products, andparticularly natural and organic foods, often have higher retail prices than do their conventional counterparts.Our business is a low margin business and our profit margins may decrease due to consolidation in the grocery industry and our increasedfocus on sales to the conventional supermarket channel.The grocery distribution industry generally is characterized by relatively high volume of sales with relatively low profit margins. The continuingconsolidation of retailers in the natural products industry and the growth of supernatural chains may reduce our profit margins in the future as morecustomers qualify for greater volume discounts, and we experience pricing pressures from suppliers and retailers. Over the last three fiscal years, we haveincreased our sales to our supernatural chain and conventional supermarket customers in relation to our total sales. In the fourth quarter of fiscal 2011, weannounced that we had entered into a three-year distribution arrangement to supply Safeway with nonproprietary natural, organic and specialty products,which further increased the percentage of our total sales to conventional supermarkets. Sales to customers within our supernatural chain and conventionalsupermarket channels generate a lower gross margin than do sales to our independent customers. Many of these customers, including our largest customer,have agreements with us that include volume discounts. As the amounts these customers purchase from us increase, the price that they pay for the productsthey purchase is reduced, putting downward pressure on our gross margins on these sales. To compensate for these lower gross margins, we must reduce theexpenses we incur to service these customers. If we are unable to reduce our expenses as a percentage of net sales, including our expenses related to servicingthis lower gross margin business, our business, financial condition or results of operations could be adversely impacted.Our business may be sensitive to inflationary and deflationary pressures.Many of our sales are at prices that are based on our product cost plus a percentage markup. As a result, volatile food costs have a direct impact uponour profitability. Prolonged periods of product cost inflation may have a negative impact on our profit margins and results of operations to the extent that we areunable to pass on all or a portion of such product cost increases to our customers. In addition, product cost inflation may negatively impact the consumerdiscretionary spending trends of our customers' customers, which could adversely affect our sales. Conversely, because many of our sales are at prices thatare based upon product cost plus a percentage markup, our profit levels may be negatively impacted during periods of product cost deflation even though ourgross profit as a percentage of net sales may remain relatively constant. To compensate for lower gross margins, we, in turn, must reduce expenses that weincur to service our customers. If we are unable to reduce our expenses as a percentage of net sales, our business, financial condition or results of operationscould be adversely impacted.Our customers generally are not obligated to continue purchasing products from us.Many of our customers buy from us under purchase orders, and we generally do not have agreements with or commitments from these customers for thepurchase of products. We cannot assure you that our customers will maintain or increase their sales volumes or orders for the products supplied by us or thatwe will be able to maintain or add to our existing customer base. Decreases in our customers' sales volumes or orders for products supplied by us may have amaterial adverse effect on our business, financial condition or results of operations.We have significant competition from a variety of sources.We operate in competitive markets and our future success will be largely dependent on our ability to provide quality products and services at competitiveprices. Bidding for contracts or arrangements with customers, particularly within the supernatural chain and conventional supermarket channels, is highlycompetitive and distributors may market their services to a particular customer over a long period of time before they are invited to bid. Our competition comesfrom a variety of sources, including other distributors of natural products as well as specialty grocery and mass market grocery distributors and retailcustomers that have their own distribution channels. We cannot assure you that mass market grocery distributors will not increase their emphasis on naturalproducts and more directly compete with us including through self-distribution of particular items or purchases of particular items directly from suppliers orthat new competitors will not enter the market. These distributors may have been in business longer than we have, may have substantially greater financialand other resources than we have and may be better established in their markets. We cannot assure you that our current or potential competitors will notprovide products or services comparable or superior to those provided by us or adapt more quickly than we do to evolving13Table of Contentsindustry trends or changing market requirements. It is also possible that alliances among competitors may develop and rapidly acquire significant marketshare or that certain of our customers will increase distribution to their own retail facilities. Increased competition may result in price reductions, reduced grossmargins and loss of market share, any of which could materially and adversely affect our business, financial condition or results of operations.We cannot assure you that we will be able to compete effectively against current and future competitors.Our investment in information technology may not result in the anticipated benefits.Much of our sales growth is occurring in our lower gross margin supernatural and conventional supermarket channels. In our attempt to reduceoperating expenses and increase operating efficiencies, we have aggressively invested in the development and implementation of new information technology.Following the start-up inefficiencies associated with the initial implementation of our technological initiatives in our Lancaster, Texas distribution center duringfiscal 2011, we revised the timeline for the broader implementation of our proposed technological developments and now expect to complete the roll-out by theend of fiscal 2017. While we currently believe this revised timeline will be met, we may not be able to implement these technological changes in the time framethat we have planned and delays in implementation could negatively impact our business, financial condition or results of operations. In addition, the costs tomake these changes may exceed our estimates and will exceed the benefits during the early stages of implementation. Even if we are able to implement thechanges in accordance with our revised plans, and within our current cost estimates, we may not be able to achieve the expected efficiencies and cost savingsfrom this investment, which could have an adverse effect on our business, financial condition or results of operations.Failure by us to develop and operate a reliable technology platform could negatively impact our business.Our ability to decrease costs and increase profits, as well as our ability to serve customers most effectively, depends on the reliability of our technologyplatform. We use software and other technology systems, among other things, to generate and select orders, to load and route trucks and to monitor andmanage our business on a day-to-day basis. Any disruption to these computer systems could adversely impact our customer service, decrease the volume ofour business and result in increased costs negatively affecting our business, financial condition or results of operations.We have experienced losses due to the uncollectability of accounts receivable in the past and could experience increases in such losses in the futureif our customers are unable to timely pay their debts to us.Certain of our customers have from time to time experienced bankruptcy, insolvency and/or an inability to pay their debts to us as they come due. If ourcustomers suffer significant financial difficulty, they may be unable to pay their debts to us timely or at all, which could have a material adverse effect on ourresults of operations. It is possible that customers may reject their contractual obligations to us under bankruptcy laws or otherwise. Significant customerbankruptcies could further adversely affect our revenues and increase our operating expenses by requiring larger provisions for bad debt. In addition, evenwhen our contracts with these customers are not rejected, if customers are unable to meet their obligations on a timely basis, it could adversely affect ourability to collect receivables. Further, we may have to negotiate significant discounts and/or extended financing terms with these customers in such a situation,each of which could have material adverse effect on our business, financial condition, results of operations or cash flows. During periods of economicweakness, small to medium-sized businesses, like many of our independently owned natural products retailer customers, may be impacted more severely andmore quickly than larger businesses. Similarly, these smaller businesses may be more likely to be more severely impacted by events outside of their control,like significant weather events. Consequently, the ability of such businesses to repay their obligations to us may deteriorate, and in some cases thisdeterioration may occur quickly, which could adversely impact our business, financial condition or results of operations.Our acquisition strategy may adversely affect our business.A portion of our past growth has been achieved through acquisitions of, or mergers with, other distributors of natural, organic and specialty products.We also continually evaluate opportunities to acquire other companies. We believe that there are risks related to acquiring companies, including an inability tosuccessfully identify suitable acquisition candidates or consummate such potential acquisitions. To the extent that our future growth includes acquisitions, wecannot assure you that we will not overpay for acquisitions, lose key employees of acquired companies, or fail to achieve potential synergies or expansion intonew markets as a result of our acquisitions. Therefore, future acquisitions, if any, may have a material adverse effect on our results of operations, particularlyin periods immediately following the consummation of those transactions while the operations of the acquired business are being integrated with our operations.Achieving the benefits of acquisitions depends on timely, efficient and successful execution of a number of post-acquisition events, including, among otherthings:•maintaining the customer and supplier base;•optimizing delivery routes;•coordinating administrative, distribution and finance functions; and14Table of Contents•integrating management information systems and personnel.The integration process could divert the attention of management and any difficulties or problems encountered in the transition process could have amaterial adverse effect on our business, financial condition or results of operations. In particular, the integration process may temporarily redirect resourcespreviously focused on reducing product cost and operating expenses, resulting in lower gross profits in relation to sales. In addition, the process of combiningcompanies could cause the interruption of, or a loss of momentum and operating profits in, the activities of the respective businesses, which could have anadverse effect on their combined operations.In connection with acquisitions of businesses in the future, if any, we may decide to consolidate the operations of any acquired business with ourexisting operations or make other changes with respect to the acquired business, which could result in special charges or other expenses. Our results ofoperations also may be adversely affected by expenses we incur in making acquisitions, by amortization of acquisition-related intangible assets with definitelives and by additional depreciation attributable to acquired assets. Any of the businesses we acquire may also have liabilities or adverse operating issues,including some that we fail to discover before the acquisition, and our indemnity for such liabilities may also be limited. Additionally, our ability to make anyfuture acquisitions may depend upon obtaining additional financing. We may not be able to obtain additional financing on acceptable terms or at all. To theextent that we seek to acquire other businesses in exchange for our common stock, fluctuations in our stock price could have a material adverse effect on ourability to complete acquisitions.We may have difficulty managing our growth.The growth in the size of our business and operations has placed, and is expected to continue to place, a significant strain on our management. Ourfuture growth may be limited by our inability to acquire new distribution centers or expand our existing distribution centers, make acquisitions, successfullyintegrate acquired entities or significant new customers, implement information systems initiatives or adequately manage our personnel. Our future growth islimited in part by the size and location of our distribution centers. As we near maximum utilization of a given facility or maximize our processing capacity,operations may be constrained and inefficiencies have been and may be created, which could adversely affect our results of operations unless the facility isexpanded, volume is shifted to another facility or additional processing capacity is added. Conversely, as we add additional facilities or expand existingoperations or facilities, excess capacity may be created. Any excess capacity may also create inefficiencies and adversely affect our results of operations. Wecannot assure you that we will be able to successfully expand our existing distribution centers or open new distribution centers in new or existing markets asneeded to accommodate or facilitate growth. Even if we are able to expand our distribution network, our ability to compete effectively and to manage futuregrowth, if any, will depend on our ability to continue to implement and improve operational, financial and management information systems , including ourwarehouse management systems, on a timely basis and to expand, train, motivate and manage our work force. We cannot assure you that our existingpersonnel, systems, procedures and controls will be adequate to support the future growth of our operations. Our inability to manage our growth effectivelycould have a material adverse effect on our business, financial condition or results of operations.Increased fuel costs may adversely affect our results of operations.Increased fuel costs may have a negative impact on our results of operations. The high cost of diesel fuel can increase the price we pay for products aswell as the costs we incur to deliver products to our customers. These factors, in turn, may negatively impact our net sales, margins, operating expenses andoperating results. To manage this risk, we have in the past periodically entered, and may in the future periodically enter, into heating oil derivative contracts tohedge a portion of our projected diesel fuel requirements. Heating crude oil prices have a highly correlated relationship to fuel prices, making these derivativeseffective in offsetting changes in the cost of diesel fuel. We are not party to any commodity swap agreements and, as a result, our exposure to volatility in theprice of diesel fuel has increased relative to our exposure to volatility in prior periods in which we had outstanding heating oil derivative contracts. We do notenter into fuel hedge contracts for speculative purposes. We have in the past, and may in the future, periodically enter into forward purchase commitments fora portion of our projected monthly diesel fuel requirements at fixed prices. As of August 3, 2013, we had no forward diesel fuel commitments. If fuel pricesdecrease significantly, these forward purchases may prove ineffective and result in us paying higher than the then market costs for a portion of our diesel fuel.We also maintain a fuel surcharge program which allows us to pass some of our higher fuel costs through to our customers. We cannot guarantee that we willcontinue to be able to pass a comparable proportion or any of our higher fuel costs to our customers in the future, which may adversely affect our business,financial condition or results of operations.Disruption of our distribution network could adversely affect our business.Damage or disruption to our distribution capabilities due to weather, natural disaster, fire, terrorism, pandemic, strikes, the financial and/or operationalinstability of key suppliers, or other reasons could impair our ability to distribute our products. To the extent that we are unable, or it is not financiallyfeasible, to mitigate the likelihood or potential impact of such events, or15Table of Contentsto manage effectively such events if they occur, there could be an adverse effect on our business financial condition or results of operations.The cost of the capital available to us and any limitations on our ability to access additional capital may have a material adverse effect on ourbusiness, financial condition or results of operations.In May 2012, we amended and restated our revolving credit facility pursuant to which we now have a $500 million secured revolving credit facilitywhich matures on May 24, 2017; of which up to $450.0 million is available to our U.S. subsidiaries and up to $50.0 million is available to UNFI Canada.The borrowings of the US portion of the credit facility accrue interest, at our option, at either (i) a base rate (generally defined as the highest of (x) the Bank ofAmerica Business Capital prime rate, (y) the average overnight federal funds effective rate plus one-half percent (0.50%) per annum and (z) one-month LIBORplus one percent (1%) per annum plus an initial margin of 0.50%, or (ii) the London Interbank Offered Rate ("LIBOR") for one, two, three or six months or, ifapproved by all affected lenders, nine months plus an initial margin of 1.50%. The borrowings on the Canadian portion of the credit facility for Canadianswing-line loans, Canadian over advance loans or Canadian protective advances accrue interest, at our option, at either (i) a prime rate (generally defined as thehighest of (x) 0.50% over 30-day Reuters Canadian Deposit Offering Rate for bankers' acceptances, (y) the prime rate of Bank of America, N.A.'s Canadabranch, and (z) a bankers' acceptance equivalent rate for a one month interest period plus 1.00% plus an initial margin of 0.50%, or (ii) a bankers' acceptanceequivalent rate of the rate of interest per annum equal to the annual rates applicable to Canadian Dollar bankers' acceptances on the "CDOR Page" of ReuterMonitor Money Rates Service, plus five basis points, and an initial margin of 1.50% (the "CDOR rate"). All other borrowings on the Canadian portion of thecredit facility must exclusively accrue interest under the CDOR rate plus the applicable margin.As of August 3, 2013, our borrowing base, based on accounts receivable and inventory levels and described more completely below under"Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Revenues," was $484.5 million, withremaining availability of $319.3 million. During fiscal 2012, we used borrowings under our amended and restated revolving credit facility to pay off our termloan and refinance existing indebtedness under our predecessor revolving credit facility.In order to maintain our profit margins, we rely on strategic investment buying initiatives, such as discounted bulk purchases, which require spendingsignificant amounts of working capital up front to purchase products that we will sell over a multi-month time period. In the event that our cost of capitalincreases, such as during a period in which we are not in compliance with the fixed charge coverage ratio covenants under our revolving credit facility, or ourability to borrow funds or raise equity capital is limited, we could suffer reduced profit margins and be unable to grow our business organically or throughacquisitions, which could have a material adverse effect on our business, financial condition or results of operations.Our debt agreements contain restrictive covenants that may limit our operating flexibility.Our debt agreements contain financial covenants and other restrictions that limit our operating flexibility, limit our flexibility in planning for or reactingto changes in our business and make us more vulnerable to economic downturns and competitive pressures. Our indebtedness could have significant negativeconsequences, including:•increasing our vulnerability to general adverse economic and industry conditions;•limiting our ability to obtain additional financing;•limiting our flexibility in planning for or reacting to changes in our business and the industry in which we compete; and•placing us at a competitive disadvantage compared to competitors with less leverage or better access to capital resources.In addition, our revolving credit facility requires that we comply with various financial tests and imposes certain restrictions on us, including amongother things, restrictions on our ability to incur additional indebtedness, create liens on assets, make loans or investments or pay dividends. Failure to complywith these covenants could have an adverse effect on our business, financial condition or results of operations.Our operating results are subject to significant fluctuations.Our operating results may vary significantly from period to period due to:•demand for our products; including as a result of seasonal fluctuations;•changes in our operating expenses, including fuel and insurance expenses;•management's ability to execute our business and growth strategies;•changes in customer preferences, including levels of enthusiasm for health, fitness and environmental issues;•public perception of the benefits of natural and organic products when compared to similar conventional products;16Table of Contents•fluctuation of natural product prices due to competitive pressures;•personnel changes;•general economic conditions including inflation;•supply shortages, including a lack of an adequate supply of high-quality agricultural products due to poor growing conditions, water shortages,natural disasters or otherwise;•volatility in prices of high-quality agricultural products resulting from poor growing conditions, water shortages, natural disasters or otherwise; and•future acquisitions, particularly in periods immediately following the consummation of such acquisition transactions while the operations of theacquired businesses are being integrated into our operations.Due to the foregoing factors, we believe that period-to-period comparisons of our operating results may not necessarily be meaningful and that suchcomparisons cannot be relied upon as indicators of future performance.Conditions beyond our control can interrupt our supplies and increase our product costs.We offer more than 65,000 high-quality natural, organic and specialty foods and non-food products, which we purchase from more than 6,000suppliers. The majority of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout Europe, Asia,Central America, South America, Africa and Australia. For the most part, we do not have long-term contracts with our suppliers committing them to provideproducts to us. Although our purchasing volume can provide benefits when dealing with suppliers, suppliers may not provide the products needed by us inthe quantities and at the prices requested. We are also subject to delays caused by interruption in production and increases in product costs based onconditions outside of our control. These conditions include work slowdowns, work interruptions, strikes or other job actions by employees of suppliers,short-term weather conditions or more prolonged climate change, crop conditions, product recalls, water shortages, transportation interruptions, unavailabilityof fuel or increases in fuel costs, competitive demands, raw material shortages and natural disasters or other catastrophic events (including, but not limited tofood-borne illnesses). We experienced higher manufacturer out-of-stocks during fiscal 2013 causing us to incur higher operating expenses as we movedproducts around our distribution facilities as we sought to keep our service level high, and we cannot be sure when this trend will end or whether it will recurduring future years. As the consumer demand for natural and organic products has increased, certain retailers and other producers have entered the marketand attempted to buy certain raw materials directly, limiting their availability to be used in certain vendor products. Further, increased frequency or durationof extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. In the summer monthsof 2012, certain agricultural areas of the United States and Mexico experienced severe drought. The impact of sustained droughts are uncertain and couldresult in volatile input costs. Input costs could increase at any point in time for a large portion of the products that we sell for a prolonged period. Our inabilityto obtain adequate products as a result of any of the foregoing factors or otherwise could mean that we could not fulfill our obligations to customers, andcustomers may turn to other distributors. In that case, our financial condition, results of operations and business could be adversely affected.We are subject to significant governmental regulation.Our business is highly regulated at the federal, state and local levels and our products and distribution operations require various licenses, permits andapprovals. In particular:•the products that we distribute in the United States are subject to inspection by the United States Food and Drug Administration;•our warehouse and distribution centers are subject to inspection by the USDA and state health authorities; and•the United States Department of Transportation and the United States Federal Highway Administration regulate our United States truckingoperations.Our Canadian operations are similarly subject to extensive regulation, including the English and French dual labeling requirements applicable toproducts that we distribute in Canada. The loss or revocation of any existing licenses, permits or approvals or the failure to obtain any additional licenses,permits or approvals in new jurisdictions where we intend to do business could have a material adverse effect on our business, financial condition or results ofoperations. In addition, as a distributor and manufacturer of natural, organic, and specialty foods, we are subject to increasing governmental scrutiny of andpublic awareness regarding food safety and the sale, packaging and marketing of natural and organic products. Compliance with these laws may impose asignificant burden on our operations. If we were to manufacture or distribute foods that are or are perceived to be contaminated, any resulting product recallscould have an adverse effect on our business, financial condition or results of operations. Additionally, concern over climate change, including the impact ofglobal warming, has led to significant United States and international legislative and regulatory efforts to limit greenhouse gas emissions. Increased regulationregarding greenhouse gas emissions, especially diesel engine emissions, could impose substantial costs on us. These costs include an increase in the cost of thefuel and other energy we purchase and capital costs associated with updating or replacing our vehicles prematurely. Until the timing, scope and extent of suchregulation becomes known, we cannot predict its effect on17Table of Contentsour results of operations. It is reasonably possible, however, that it could impose material costs on us which we may be unable to pass on to our customers.Product liability claims could have an adverse effect on our business.We face an inherent risk of exposure to product liability claims if the products we manufacture or sell cause injury or illness. We may be subject toliability, which could be substantial, because of actual or alleged contamination in products manufactured or sold by us, including products sold bycompanies before we acquired them. We have, and the companies we have acquired have had, liability insurance with respect to product liability claims. Thisinsurance may not continue to be available at a reasonable cost or at all, and may not be adequate to cover product liability claims against us or againstcompanies we have acquired. We generally seek contractual indemnification from manufacturers, but any such indemnification is limited, as a practicalmatter, to the creditworthiness of the indemnifying party. If we or any of our acquired companies do not have adequate insurance or contractualindemnification available, product liability claims and costs associated with product recalls, including a loss of business, could have a material adverse effecton our business, financial condition or results of operations.We are dependent on a number of key executives.Management of our business is substantially dependent upon the services of certain key management employees. Loss of the services of any officers orany other key management employee could have a material adverse effect on our business, financial condition or results of operations.Union-organizing activities could cause labor relations difficulties.As of August 3, 2013 we had approximately 7,300 full and part-time employees, 432 of whom (approximately 5.9%) are covered by collectivebargaining agreements at our Edison, New Jersey, Auburn, Washington, Leicester, Massachusetts, Iowa City, Iowa, Dayville, Connecticut and Auburn,Washington facilities. The Edison, New Jersey, Leicester, Massachusetts, Iowa City, Iowa, Dayville, Connecticut and Auburn, Washington agreements expirein June 2014, March 2014, June 2014, July 2014, and February 2017, respectively. We have in the past been the focus of union-organizing efforts, and it islikely that we will be the focus of similar efforts in the future.As we increase our employee base and broaden our distribution operations to new geographic markets, our increased visibility could result in increasedor expanded union-organizing efforts. In the event we are unable to negotiate contract renewals with our union associates, we could be subject to workstoppages. In that event, it would be necessary for us to hire replacement workers to continue to meet our obligations to our customers. The costs to hirereplacement workers would negatively impact the profitability of the facility, and depending on the length of time that we are required to employ replacementworkers these costs could be significant and could have a material adverse effect on our business, financial condition or results of operations.We may fail to establish sufficient insurance reserves and adequately estimate for future workers' compensation and automobile liabilities.We are primarily self-insured for workers' compensation and automobile liability insurance. We believe that our workers' compensation and automobileinsurance coverage is customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that webelieve are not commercially reasonable to insure. These losses, should they occur, could have a material and adverse effect on our business, financialcondition or results of operations. In addition, the cost of workers' compensation insurance and automobile insurance fluctuates based upon our historicaltrends, market conditions and availability.Any projection of losses concerning workers' compensation and automobile insurance is subject to a considerable degree of variability. Among the causesof this variability are unpredictable external factors affecting litigation trends, benefit level changes and claim settlement patterns. If actual losses incurred aregreater than those anticipated, our reserves may be insufficient and additional costs could be recorded in our consolidated financial statements. If we suffer asubstantial loss that is not covered by our self-insurance reserves, the loss and attendant expenses could harm our business and operating results. We havepurchased stop loss coverage from third parties, which limits our exposure above the amounts we have self-insured.The market price for our common stock may be volatile.At times, there has been significant volatility in the market price of our common stock. In addition, the market price of our common stock couldfluctuate substantially in the future in response to a number of factors, including the following:•our quarterly operating results or the operating results of other distributors of organic or natural food and non-food products and of supernaturalchains and conventional supermarkets and other of our customers;18Table of Contents•changes in general conditions in the economy, the financial markets or the organic or natural food and non-food product distribution industries;•changes in financial estimates or recommendations by stock market analysts regarding us or our competitors;•announcements by us or our competitors of significant acquisitions;•increases in labor, energy, fuel costs or the costs of food products;•natural disasters, severe weather conditions or other developments affecting us or our competitors;•publication of research reports about us, the benefits of organic and natural products, or the organic or natural food and non-food productdistribution industries generally;•changes in market valuations of similar companies;•additions or departures of key management personnel;•actions by institutional stockholders; and•speculation in the press or investment community.In addition, in recent years the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on themarket prices of securities issued by many companies for reasons unrelated to their operating performance. These broad market fluctuations may materiallyadversely affect our stock price, regardless of our operating results.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe maintained twenty-seven distribution centers at August 3, 2013 which were utilized by our wholesale division. These facilities, including offsitestorage space, consisted of an aggregate of approximately 6.5 million square feet of storage space, which we believe represents the largest capacity of anydistributor within the United States in the natural, organic and specialty products industry. We are also constructing two new distribution centers in Racine,Wisconsin in the village of Sturtevant and Hudson Valley, New York in the town of Montgomery, with an additional distribution center planned for NorthernCalifornia.Set forth below for each of our distribution centers is its location and the expiration of leases as of August 3, 2013 for those distribution centers that wedo not own.19Table of ContentsLocation Lease ExpirationAtlanta, Georgia OwnedAuburn, California OwnedAuburn, Washington August 2019Aurora, Colorado July 2015Aurora, Colorado October 2033Burnaby, British Columbia October 2018Charlotte, North Carolina September 2019Chesterfield, New Hampshire OwnedConcord, Ontario December 2021Dayville, Connecticut OwnedGreenwood, Indiana OwnedIowa City, Iowa OwnedLancaster, Texas July 2025Leicester, Massachusetts November 2015Logan Township, New Jersey May 2028Moreno Valley, California July 2023Mounds View, Minnesota November 2015New Oxford, Pennsylvania OwnedPhiladelphia, Pennsylvania January 2014Richmond, British Columbia August 2022Ridgefield, Washington OwnedRocklin, California OwnedSarasota, Florida July 2017Scotstown, Quebec OwnedSt. Laurent, Quebec July 2017Vernon, California OwnedYork, Pennsylvania May 2020We lease facilities to operate thirteen natural products retail stores through our Earth Origins division in Florida, Maryland and Massachusetts and oneretail store through our UNFI Canada division, each with various lease expiration dates. We also lease a processing and manufacturing facility in Edison,New Jersey with a lease expiration date of March 31, 2018.We lease office space in Santa Cruz, California, Chesterfield, New Hampshire, Uniondale, New York, Richmond, Virginia, and Providence, RhodeIsland, the site of our corporate headquarters. Our leases have been entered into upon terms that we believe to be reasonable and customary.We also lease a warehouse facility in Minneapolis, Minnesota that we acquired in connection with our acquisition of Roots & Fruits Produce Cooperativein 2005. This facility is currently being subleased under an agreement that expires concurrently with our lease termination in November 2016. We also leaseoffsite storage space near certain of our distribution facilities.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we are involved in routine litigation that arises in the ordinary course of our business. There are no pending material legal proceedingsto which we are a party or to which our property is subject.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.20Table of ContentsPART II.ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIESOur common stock is traded on the Nasdaq Global Select Market® under the symbol "UNFI." Our common stock began trading on the Nasdaq StockMarket® on November 1, 1996.The following table sets forth, for the fiscal periods indicated, the high and low sale prices per share of our common stock on the Nasdaq Global SelectMarket®:Fiscal 2013 High LowFirst Quarter $61.26 $52.72Second Quarter 56.01 50.25Third Quarter 56.45 47.20Fourth Quarter 60.42 47.67 Fiscal 2012 First Quarter $42.53 $35.07Second Quarter 44.68 32.83Third Quarter 50.37 43.81Fourth Quarter 55.86 47.98On August 3, 2013, we had 82 stockholders of record. The number of record holders may not be representative of the number of beneficial holders ofour common stock because depositories, brokers or other nominees hold many shares.We have never declared or paid any cash dividends on our capital stock. We anticipate that all of our earnings in the foreseeable future will be retained tofinance the continued growth and development of our business, and we have no current intention to pay cash dividends. Our future dividend policy willdepend on our earnings, capital requirements and financial condition, requirements of the financing agreements to which we are then a party and other factorsconsidered relevant by our Board of Directors. Additionally, the terms of our existing revolving credit facility restrict us from making any cash dividendsunless certain conditions and financial tests are met.We did not repurchase any shares during the fourth quarter ended August 3, 2013.Comparative Stock PerformanceThe graph below compares the cumulative total stockholder return on our common stock for the last five fiscal years with the cumulative total return on(i) an index of Food Service Distributors and Grocery Wholesalers and (ii) The NASDAQ Composite Index. The comparison assumes the investment of $100on August 2, 2008 in our common stock and in each of the indices and, in each case, assumes reinvestment of all dividends. The stock price performanceshown below is not necessarily indicative of future performance.The index of Food Distributors and Wholesalers (referred to below as the "Peer Group") includes Nash Finch Company, SuperValu, Inc. and SYSCOCorporation.This performance graph shall not be deemed "soliciting material" or be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwisesubject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, asamended (the "Securities Act"), or the Exchange Act.21Table of ContentsCOMPARISION OF 5 YEAR CUMULATIVE TOTAL RETURN*Among United Natural Foods, Inc., the NASDAQ Composite Index,and Index of Food Distributors and Wholesalers*$100 invested on 8/2/08 in UNFI common stock or 7/31/08 in relevant index, including reinvestment of dividends. Index calculated on a month-endbasis.ITEM 6. SELECTED FINANCIAL DATAThe selected consolidated financial data presented below are derived from our consolidated financial statements, which have been audited byKPMG LLP, our independent registered public accounting firm. The historical results are not necessarily indicative of results to be expected for any futureperiod. The following selected consolidated financial data should be read in conjunction with and is qualified by reference to "Item 7. Management'sDiscussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial Statements and Notes thereto included elsewherein this Annual Report on Form 10-K.22Table of ContentsConsolidated Statement of Income Data:(1) August 3, 2013July 28, 2012July 30, 2011July 31,2010August 1,2009 (53 weeks) (In thousands, except per share data)Net sales $6,064,355 $5,236,021 $4,530,015 $3,757,139 $3,454,900Cost of sales 5,039,279 4,320,018 3,705,205 3,060,208 2,794,419Gross profit 1,025,076 916,003 824,810 696,931 660,481Operating expenses 837,953 755,744 688,859 582,029 550,560Restructuring and asset impairment expense 1,629 5,101 6,270 — —Total operating expenses 839,582 760,845 695,129 582,029 550,560Operating income 185,494 155,158 129,681 114,902 109,921Other expense (income): Interest expense 5,897 4,734 5,000 5,845 9,914Interest income (632) (715) (1,226) (247) (450)Other, net 6,113 356 (528) (2,698) 275Total other expense, net 11,378 4,375 3,246 2,900 9,739Income before income taxes 174,116 150,783 126,435 112,002 100,182Provision for income taxes 66,262 59,441 49,762 43,681 40,998Net income $107,854 $91,342 $76,673 $68,321 $59,184Per share data—Basic: Net income $2.19 $1.87 $1.62 $1.58 $1.38Weighted average basic shares of commonstock 49,217 48,766 47,459 43,184 42,849Per share data—Diluted: Net income $2.18 $1.86 $1.60 $1.57 $1.38Weighted average diluted shares of commonstock 49,509 49,100 47,815 43,425 42,993Consolidated Balance Sheet Data:August 3, 2013 July 28, 2012 July 30, 2011 July 31,2010 August 1,2009 (In thousands)Working capital$716,951 $612,700 $381,071 $194,190 $169,053Total assets1,729,908 1,493,946 1,400,988 1,250,799 1,058,550Total long-term debt and capital leases,excluding current portion33,091 635 986 48,433 53,858Total stockholders' equity$1,099,146 $978,716 $869,667 $630,447 $544,472(1)Includes the effect of acquisitions from the date of acquisition.ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our consolidated financial statements and the notes theretoappearing elsewhere in this Annual Report on Form 10-K.Forward-Looking StatementsThis Annual Report on Form 10-K and the documents incorporated by reference in this Annual Report on Form 10-K contain forward-lookingstatements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act that involve substantial risks and uncertainties. Insome cases you can identify these statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may,""plans," "seek," "should," "will," and "would," or23Table of Contentssimilar words. You should read statements that contain these words carefully because they discuss future expectations, contain projections of future results ofoperations or of financial positions or state other "forward-looking" information.Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned not to place undue relianceon forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements toreflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from thoseanticipated in these forward-looking statements as a result of various factors, including, but not limited to:•our dependence on principal customers;•our sensitivity to general economic conditions, including the current economic environment, changes in disposable income levels and consumerspending trends;•our ability to reduce our expenses in amounts sufficient to offset our increased focus on sales to conventional supermarkets and the resulting lowergross margins on these sales;•our reliance on the continued growth in sales of natural and organic foods and non-food products in comparison to conventional products;•our ability to timely and successfully deploy our new warehouse management system throughout our distribution centers and our transportationmanagement system Company-wide;•increased fuel costs;•our sensitivity to inflationary and deflationary pressures;•the relatively low margins and economic sensitivity of our business;•the potential for disruptions in our supply chain by circumstances beyond our control;•the ability to identify and successfully complete acquisitions of other natural, organic and specialty food and non-food products distributors; and•management's allocation of capital and the timing of capital expenditures.This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. You shouldcarefully review the risks described under "Part I. Item 1A. Risk Factors," as well as any other cautionary language in this Annual Report on Form 10-K, asthe occurrence of any of these events could have an adverse effect on our business, results of operation and financial condition.OverviewWe believe we are a leading national distributor based on sales of natural, organic and specialty foods and non-food products in the United States andCanada and that our twenty-seven distribution centers, representing approximately 6.5 million square feet of warehouse space, provide us with the largestcapacity of any North American-based distributor in the natural, organic and specialty products industry. We offer more than 65,000 high-quality natural,organic and specialty foods and non-food products, consisting of national brands, regional brands, private label and master distribution products, in sixproduct categories: grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and foodservice products and personal care items. We serve more than 31,000 customer locations primarily located across the United States and Canada, the majorityof which can be classified into one of the following categories: independently owned natural products retailers, which include buying clubs; supernaturalchains, which consist solely of Whole Foods Market; conventional supermarkets, which include mass market chains; and other which includes foodserviceand international customers outside of Canada.Our operations are comprised of three principal operating divisions. These operating divisions are:•our wholesale division, which includes our broadline natural, organic and specialty distribution business in the United States, UNFI Canada,which is our natural, organic and specialty distribution business in Canada, Albert's, which is a leading distributor of organically grown produceand non-produce perishable items within the United States, and Select Nutrition, which distributes vitamins, minerals and supplements;•our retail division, consisting of Earth Origins, which operates our thirteen natural products retail stores within the United States; and•our manufacturing division, consisting of Woodstock Farms Manufacturing, which specializes in the international importation, roasting, packagingand distribution of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items, and confections, and our Blue Marble Brandsproduct lines.In recent years, our sales to existing and new customers have increased through the continued growth of the natural and organic products industry ingeneral, increased market share as a result of our high quality service and a broader product selection, including specialty products, and the acquisition of, ormerger with, natural and specialty products distributors, the expansion of our existing distribution centers; the construction of new distribution centers; theintroduction of new products24Table of Contentsand the development of our own line of natural and organic branded products. Through these efforts, we believe that we have been able to broaden ourgeographic penetration, expand our customer base, enhance and diversify our product selections and increase our market share.We have been the primary distributor to Whole Foods Market for more than fifteen years. Effective June 2010, we amended our distribution agreementwith Whole Foods Market to extend the term of the agreement to September 25, 2020. Under the terms of the amended agreement, we will continue to serve asthe primary wholesale natural grocery distributor to Whole Foods Market in its United States regions where we were serving as the primary distributor at thetime of the amendment. In September and October 2010 respectively, we acquired certain assets of Whole Foods Distribution previously used for their self-distribution of non-perishables in their Rocky Mountain and Southwest regions. We now serve as the primary distributor to Whole Foods Market in all of itsregions in the United States and have amended our distribution agreement with Whole Foods Market effective October 2010 to include these regions. WholeFoods Market accounted for approximately 36% of our net sales for the years ended August 3, 2013 and July 28, 2012.In June 2010, we acquired the SDG assets of SunOpta through our wholly-owned subsidiary, UNFI Canada for cash consideration of $65.8 million.With the acquisition, we became the largest distributor of natural, organic and specialty foods, including kosher foods, in Canada. This was a strategicacquisition as UNFI Canada provides us with an immediate platform for growth in the Canadian market. During fiscal 2012, we utilized our UNFI Canadaplatform to further expand in the Canadian market, including through our purchase of substantially all of the assets of a specialty food distribution businessin the Ontario market in November 2011. During the first quarter of fiscal 2013, we also utilized this platform for our August 2012 acquisition ofsubstantially all of the assets of a dairy distribution business in the central Canada market.The ability to distribute specialty food items (including ethnic, kosher and gourmet) has accelerated our expansion into a number of high-growthbusiness markets and allowed us to establish immediate market share in the fast-growing specialty foods market. We have now integrated specialty foodproducts and natural and organic specialty non-food products into most of our broadline distribution centers across the United States and Canada. Due to ourexpansion into specialty foods, we were awarded new business with a number of conventional supermarkets over the past three fiscal years that we previouslyhad not done business with because we did not distribute specialty products. We believe that distribution of these products enhances our conventionalsupermarket business channel and that our complementary product lines continue to present opportunities for cross-selling.In June 2011, we entered into an asset purchase agreement with L&R Distributors pursuant to which we agreed to sell our conventional non-foods andgeneral merchandise lines of business, including certain inventory related to these product lines. This divestiture was completed in the first quarter of fiscal2012, and has allowed us to concentrate on our core business of the distribution of natural, organic, and specialty foods and non-food products.To maintain our market leadership and improve our operating efficiencies, we seek to continually:•expand our marketing and customer service programs across regions;•expand our national purchasing opportunities;•offer a broader product selection;•offer operational excellence with high service levels and a higher percentage of on-time deliveries than our competitors;•centralize general and administrative functions to reduce expenses;•consolidate systems applications among physical locations and regions;•increase our investment in people, facilities, equipment and technology;•integrate administrative and accounting functions; and•reduce the geographic overlap between regions.Our continued growth has allowed us to expand our existing facilities and open new facilities in an effort to achieve increasing operating efficiencies. Wehave made significant capital expenditures and incurred considerable expenses in connection with the opening and expansion of our facilities. At August 3,2013, our distribution capacity totaled approximately 6.5 million square feet. In September 2010, we began shipping products from our distribution center inLancaster, Texas, which serves customers throughout the Southwestern United States, including Texas, Oklahoma, New Mexico, Arkansas and Louisiana.In October 2010, in connection with the acquisition of the Rocky Mountain distribution business of Whole Foods Distribution, we took over the operations,including the assumption of an operating lease at a distribution center in Aurora,25Table of ContentsColorado, augmenting our existing Aurora, Colorado distribution center, which was at capacity, in serving customers in Colorado, Utah, Arizona and NewMexico. In May 2013, we began operations at our new 540,000 square foot distribution center in Aurora, Colorado, replacing our existing two broadlinedistribution centers, an Albert's distribution center and an off-site storage location. In May 2013, we also began operations at our new Albert's distributioncenter in Logan, New Jersey. We have also announced a multi-year expansion project with additional distribution centers planned for the United States inRacine, Wisconsin in the village of Sturtevant, Hudson Valley, New York in the town of Montgomery as well as in Northern California.Our net sales consist primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns andallowances. Net sales also consist of amounts charged by us to customers for shipping and handling and fuel surcharges. The principal components of ourcost of sales include the amounts paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring the product to ourdistribution centers. Cost of sales also includes amounts incurred by us at our manufacturing subsidiary, Woodstock Farms Manufacturing, for inboundtransportation costs and depreciation for manufacturing equipment, offset by consideration received from suppliers in connection with the purchase orpromotion of the suppliers' products. Our gross margin may not be comparable to other similar companies within our industry that may include all costsrelated to their distribution network in their costs of sales rather than as operating expenses. We include purchasing and outbound transportation expenseswithin our operating expenses rather than in our cost of sales. Total operating expenses include salaries and wages, employee benefits (including paymentsunder our Employee Stock Ownership Plan), warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation,depreciation and amortization expense. Other expenses (income) include interest on our outstanding indebtedness, including the financing obligation related toour Aurora, Colorado distribution center, interest income and miscellaneous income and expenses. Fiscal year 2013 other expense also includes a pre-tax chargeof $4.9 million in the first quarter related to an agreement to settle a multi-state unclaimed property audit.Critical Accounting Policies and EstimatesThe preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets,liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Securities and Exchange Commission has defined criticalaccounting policies as those that are both most important to the portrayal of our financial condition and results and require our most difficult, complex orsubjective judgments or estimates. Based on this definition, we believe our critical accounting policies are: (i) determining our allowance for doubtful accounts,(ii) determining our reserves for the self-insured portions of our workers' compensation and automobile liabilities and (iii) valuing goodwill and intangibleassets. For all financial statement periods presented, there have been no material modifications to the application of these critical accounting policies.Allowance for doubtful accountsWe analyze customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels when evaluating theadequacy of our allowance for doubtful accounts. In instances where a reserve has been recorded for a particular customer, future sales to the customer areconducted using either cash-on-delivery terms, or the account is closely monitored so that as agreed upon payments are received, orders are released; a failureto pay results in held or cancelled orders. Our accounts receivable balance was $339.6 million and $305.2 million, net of the allowance for doubtful accountsof $9.3 million and $6.2 million, as of August 3, 2013 and July 28, 2012, respectively. Our notes receivable balances were $3.3 million and $3.7 million, netof the allowance for doubtful accounts of $0.8 million and $0.7 million, as of August 3, 2013 and July 28, 2012, respectively.Insurance reservesWe are primarily self-insured for workers' compensation, and general and automobile liability insurance. It is our policy to record the self-insuredportions of our workers' compensation and automobile liabilities based upon actuarial methods of estimating the future cost of claims and related expenses thathave been reported but not settled, and that have been incurred but not yet reported. Any projection of losses concerning workers' compensation and automobileliability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting litigation trends,benefit level changes and claim settlement patterns. If actual claims incurred are greater than those anticipated, our reserves may be insufficient and additionalcosts could be recorded in our consolidated financial statements. Accruals for workers' compensation and automobile liabilities totaled $18.5 million and$19.5 million as of August 3, 2013 and July 28, 2012, respectively.Valuation of goodwill and intangible assets26Table of ContentsWe are required to test goodwill for impairment at least annually, and between annual tests if events occur or circumstances change that would morelikely than not reduce the fair value of a reporting unit below its carrying amount. We have elected to perform our annual tests for indications of goodwillimpairment during the fourth quarter of each fiscal year. We test for goodwill impairment at the reporting unit level, which are at or one level below theoperating segment level. Beginning in fiscal 2012, the first step in our annual assessment of each of our reporting units is a qualitative assessment as allowedunder Accounting Standards Update ("ASU") No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment("ASU 2011-08"), unless we believe it is more likely than not that a reporting unit's fair value is less than the carrying value. In order to qualify for anexclusion from the quantitative two-step goodwill test, the thresholds used by the Company for this determination are that a reporting unit must (1) havepassed its previous two-step test with a margin of calculated fair value versus carrying value of at least 20%, (2) have had no significant changes to itsworking capital structure, and (3) have current year income which is at least 85% of prior year amounts. For reporting units which do not meet this exclusion,the quantitative goodwill impairment analysis is a two-step test. The first step, used to identify potential impairment, involves comparing each reporting unit'sestimated fair value to its carrying value, including goodwill. Each reporting unit regularly prepares discrete operating forecasts and uses these forecasts as thebasis for the assumptions used in the discounted cash flow analysis. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill isconsidered not to be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performedto measure the amount of impairment. If required, the second step involves calculating an implied fair value of goodwill for each reporting unit for which thefirst step indicated potential impairment. The implied fair value of goodwill is determined in a manner similar to the amount of goodwill calculated in abusiness combination, by measuring the excess of the estimated fair value of the reporting unit, as determined in the first step, over the aggregate estimated fairvalues of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fairvalue of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to areporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess.As of August 3, 2013, our annual assessment of each of our reporting units indicated that no impairment of goodwill existed. Approximately 91.2% ofour goodwill is within our wholesale reporting unit. Total goodwill as of August 3, 2013 and July 28, 2012 was $201.9 million and $193.7 million,respectively.Intangible assets with indefinite lives are tested for impairment at least annually and between annual tests if events occur or circumstances change thatwould indicate that the value of the asset may be impaired. In accordance with ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): TestingIndefinite-Lived Intangible Assets for Impairment ("ASU No. 2012-02"), we analyzed several qualitative factors to determine whether it was more likelythan not that an indefinite-lived intangible asset was impaired as a basis for determining whether it is necessary to perform the quantitative impairment test.Impairment would be measured as the difference between the fair value of the asset and its carrying value. During fiscal 2012, our long-term plans related tothe trade name of a portion of our Canadian wholesale distribution business evolved, and we decided to phase out this trade name. As a result, we beganamortizing this trade name over a period of ten years. As a result, our branded product line asset group is the only remaining indefinite lived intangible asset.As of our most recent annual impairment review, the branded product line asset group was determined not to be impaired. The qualitative factors used in theimpairment assessment for the branded product line asset group included a review of the most recent quantitative impairment review through which weconfirmed that fair value exceeded carrying value by at least 20% and that pre-tax operating income was at least 85% of the prior year. We believe theseprojections are reasonable based on our historical trends and expectation of future results. Total indefinite lived intangible assets as of August 3, 2013 andJuly 28, 2012 were $28.3 million and $28.2 million, respectively.Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not berecoverable. Cash flows expected to be generated by the related assets are estimated over the asset's useful life based on updated projections. If the evaluationindicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow model.During the fiscal year ended August 3, 2013, an impairment charge of $1.6 million was recognized in connection with the termination of a long-term licensingagreement and the write-off of the associated intangible asset. Total finite-lived intangible assets as of August 3, 2013 and July 28, 2012 were $21.3 millionand $24.3 million, respectively.The assessment of the recoverability of goodwill and intangible assets will be impacted if estimated future cash flows are not achieved.Results of OperationsThe following table presents, for the periods indicated, certain income and expense items expressed as a percentage of net sales:27Table of Contents Fiscal year ended August 3, 2013July 28, 2012July 30, 2011 Net sales 100.0 %100.0 %100.0 %Cost of sales 83.1 %82.5 %81.8 %Gross profit 16.9 %17.5 %18.2 %Operating expenses 13.8 %14.4 %15.2 %Restructuring and asset impairment expenses — %0.1 %0.1 %Total operating expenses 13.8 %14.5 %15.3 %Operating income 3.1 %3.0 %2.9 %Other expense (income): Interest expense 0.1 %0.1 %0.1 %Interest income — %— %— %Other, net 0.1 %— %— %Total other expense, net 0.2 %0.1 %0.1 %Income before income taxes 2.9 %2.9 %2.8 %Provision for income taxes 1.1 %1.1 %1.1 %Net income 1.8 %1.7 %*1.7 % * Total reflects roundingFiscal year ended August 3, 2013 compared to fiscal year ended July 28, 2012Net SalesOur net sales for the fiscal year ended August 3, 2013 increased approximately 15.8%, or $828 million, to a record $6.06 billion from $5.24 billionfor the fiscal year ended July 28, 2012. This increase was primarily due to growth in our wholesale segment of $821.8 million. Our organic growth (salesgrowth excluding the impact of acquisitions) of 14.8% is due to the continued growth of the natural and organic products industry in general, increased marketshare as a result of our focus on service and value added services, and a broader selection of products, including specialty foods. In addition to net salesgrowth attributable to our organic growth, we also benefited from the inclusion of $53.8 million in incremental net sales related to our acquisitions of certainassets of three distributors completed during the first quarter of fiscal 2013. Our net sales for the fiscal year ended August 3, 2013 were also favorablyimpacted by approximately 2.2%, or $118.7 million, due to the addition of an extra week in the fiscal year compared to fiscal 2012, and by moderate priceinflation of approximately 2% during the year.Our net sales by customer type for the years ended August 3, 2013 and July 28, 2012 were as follows (in millions):Customer Type 2013Net Sales % of TotalNet Sales 2012Net Sales % of TotalNet Sales Independently owned natural products retailers $2,040 34%$1,847 35%Supernatural chains 2,207 36%1,883 36%Conventional supermarkets 1,501 25%1,246 24%Other 316 5%260 5%Total $6,064 100% $5,236 100% Net sales to our independent retailer channel increased by approximately $193 million, or 10.4% during the year ended August 3, 2013 compared to theyear ended July 28, 2012. While net sales in this channel have increased, they have grown at a slower rate than net sales in our supernatural and conventionalsupermarket channels, and therefore represent a lower percentage of our total net sales compared to the prior year.Whole Foods Market is our only supernatural chain customer, and net sales to Whole Foods Market for the year ended August 3, 2013 increased byapproximately $324 million or 17.2% over the prior year and accounted for approximately 36% of our total net sales for each of the years ended August 3,2013 and July 28, 2012. The increase in sales to Whole Foods Market is primarily due to the increases in same-store sales, and to a lesser extent, the expandedprimary distribution agreement noted above.28Table of ContentsNet sales to conventional supermarkets for the year ended August 3, 2013 increased by approximately $255 million, or 20.5% from fiscal 2012 andrepresented approximately 25% of total net sales in fiscal 2013 compared to 24% in fiscal 2012. The increase in net sales to conventional supermarkets is dueto increased demand for our products, conventional supermarkets expanding the breadth of products carried in their stores, and the additional two months ofsales in fiscal 2013 versus the ten months of sales in fiscal 2012 to a large national customer which we began servicing during the first quarter of fiscal 2012.Other net sales, which include sales to foodservice and sales from the United States to countries other than Canada, as well as sales through our retaildivision, manufacturing division, and our branded product lines, increased by approximately $56 million or 21.5% during the fiscal year ended August 3,2013 over the prior fiscal year and accounted for approximately 5% of total net sales in fiscal 2013 and fiscal 2012. The increase in other net sales wasprimarily driven by an increase in broadline distribution sales to foodservice customers.As we continue to aggressively pursue new customers and as economic conditions continue to stabilize, we expect net sales for fiscal 2014 to grow overfiscal 2013. We believe that the integration of our specialty business into our national platform has allowed us to attract customers that we would not have beenable to attract without that business and will continue to allow us to pursue a broader array of customers as many customers seek a single source for theirnatural, organic and specialty products. We believe that our projected sales growth will come from both sales to new customers and an increase in the numberof products that we sell to existing customers. We expect that most of this sales growth will occur in our lower gross margin supernatural and conventionalsupermarket channels. Although sales to these customers typically generate lower gross margins than sales to customers within our independent retailerchannel, they also typically carry a lower average cost to serve than sales to our independent customers. We also believe that food price inflation similar to thelevels experienced in fiscal 2013 will contribute to our projected net sales growth in fiscal 2014.Cost of Sales and Gross ProfitOur gross profit increased approximately 11.9%, or $109.1 million, to $1.03 billion for the year ended August 3, 2013, from $916.0 million for theyear ended July 28, 2012. Our gross profit as a percentage of net sales was 16.9% for the year ended August 3, 2013 and 17.5% for the year ended July 28,2012. The decrease in gross profit as a percentage of net sales is primarily due to the continued change in the mix of net sales by channel that began during thesecond fiscal quarter of 2010, as well as a reduced number of promotional opportunities driven by higher supplier out of stocks and the increased sales ofcustomers' private label brands, which carry a lower gross margin, combined with higher inbound freight costs. Our decision to maintain higher service levelsdespite greater supplier out of stocks also negatively impacted our gross margin in fiscal 2013 due to increased costs to move freight on an expedited basis andbetween our facilities.Our gross profits are generally higher on net sales to independently owned retailers and lower on net sales in the conventional supermarket and thesupernatural channels. For the year ended August 3, 2013 approximately $579 million of our total net sales growth of $828 million was from increased netsales in the conventional supermarket and supernatural channels. As a result, approximately 61% of our total net sales in fiscal 2013 were to the conventionalsupermarket and supernatural channels compared to approximately 60% in fiscal 2012. This change in sales mix from 2012 to 2013 resulted in lower grossprofits as a percentage of net sales during fiscal 2013 than we experienced in fiscal 2012. We anticipate net sales growth in the conventional supermarket andsupernatural channels will continue to outpace growth in the independent and other channels.We expect that our growth with Whole Foods Market and our opportunities in the conventional supermarket channel will continue to generate lower grossprofit percentages than our historical rates, particularly during the time period when we are on-boarding new business and incurring costs of hiring andtraining additional associates and increasing inventory levels before a new customer has reached expected purchasing levels. We will seek to fully offset thesereductions in gross profit percentages by reducing our operating expenses as a percentage of net sales primarily through improved efficiencies in our supplychain and improvements to our information technology infrastructure.Operating ExpensesOur total operating expenses increased approximately 10.3%, or $78.7 million, to $839.6 million for the year ended August 3, 2013, from $760.8million for the year ended July 28, 2012. The increase in total operating expenses for the year ended August 3, 2013 was primarily due to higher sales volume,approximately $6.3 million in labor action related costs at our Auburn, Washington facility and approximately $1.6 million related to the termination of alicensing agreement and write-off of the associated intangible asset. Operating expenses for the year ended July 28, 2012 included $5.1 million of severanceand other restructuring expenses associated with the divestiture of our conventional non-food and general merchandise lines of business and $1.6 million instart-up expenses incurred in connection with onboarding a large national conventional supermarket customer.Total operating expenses for fiscal 2013 include share-based compensation expense of $15.1 million, compared to $11.4 million in fiscal 2012. Share-based compensation expense for the years ended August 3, 2013 and July 28, 2012 includes29Table of Contentsapproximately $1.5 million and $1.7 million, respectively, in expense related to performance share-based awards granted to our Chief Executive Officer relatedto certain financial goals for those years ended August 3, 2013 and July 28, 2012. The Company recorded $1.7 million and $0.4 million for the years endedAugust 3, 2013 and July 28, 2012, respectively, related to performance-based equity compensation arrangements with a 2-year performance-based vestingcomponent that was established for members of our executive leadership team. See Note 3 "Equity Plans" to our Consolidated Financial Statements included in"Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.As a percentage of net sales, total operating expenses decreased to approximately 13.8% for the year ended August 3, 2013, from approximately 14.5%for the year ended July 28, 2012. The decrease in total operating expenses as a percentage of net sales was primarily attributable to the growth in thesupernatural and conventional supermarket channels which in general have lower operating expenses and higher fixed cost coverage due to higher sales, as wellas expense control programs across all of our divisions. Our operating expenses as a percentage of net sales for fiscal 2013 were negatively impacted by $6.3million in labor action related costs at our Auburn, Washington facility and approximately $1.6 million related to the termination of a licensing agreement andwrite-off of the associated intangible asset. We were able to manage our fuel costs despite rising prices by locking in the price of a portion of our expected fuelusage, updating and revising existing routes to reduce miles traveled and optimize use of trailer space, reducing idle times and other similar measures. Weexpect that we will be able to continue to reduce our operating expenses as we continue the roll-out of our supply chain initiatives including a nationalwarehouse management and procurement system, which was first launched in the Lancaster, Texas facility in September 2010, launched in the Ridgefield,Washington facility in July 2012 and is expected to be rolled out in all of our existing, broadline distribution centers by the end of fiscal 2017.Operating IncomeOperating income increased approximately 19.6%, or $30.3 million, to $185.5 million for the year ended August 3, 2013, from $155.2 million for theyear ended July 28, 2012. As a percentage of net sales, operating income was 3.1% for the year ended August 3, 2013 compared to 3.0% for the year endedJuly 28, 2012. The increase in operating income is primarily attributable to sales growth and lower operating expenses as a percentage of net sales during fiscal2013 compared to fiscal 2012.Other Expense (Income)Other expense (income) increased $7.0 million to $11.4 million for the year ended August 3, 2013, from $4.4 million for the year ended July 28, 2012.Other expense for the year ended August 3, 2013 includes a pre-tax charge of $4.9 million related to an agreement to settle a multi-state unclaimed propertyaudit. Interest expense for the year ended August 3, 2013 increased to $5.9 million from $4.7 million in the year ended July 28, 2012 primarily due to $0.7million of non-cash interest expense related to the Aurora, Colorado facility as we are accounting for this facility under the financing method due to our meetingthe criteria for continuing involvement in this sale-leaseback transaction. Interest income for the year ended August 3, 2013 decreased to $0.6 million from$0.7 million in the year ended July 28, 2012.Provision for Income TaxesOur effective income tax rate was 38.1% and 39.4% for the years ended August 3, 2013 and July 28, 2012, respectively. The decrease in the effectiveincome tax rate was impacted by a net benefit for the reversal of uncertain tax positions for the year ended August 3, 2013, and one time tax credits associatedwith a renewable energy project in Moreno Valley, California. Our effective income tax rate in both fiscal years was also affected by increased state taxesresulting from the states in which we operate.Net IncomeReflecting the factors described in more detail above, net income increased $16.5 million to $107.9 million, or $2.18 per diluted share, for the yearended August 3, 2013, compared to $91.3 million, or $1.86 per diluted share for the year ended July 28, 2012.Fiscal year ended July 28, 2012 compared to fiscal year ended July 30, 2011Net SalesOur net sales for the fiscal year ended July 28, 2012 increased approximately 15.6%, or $706 million, to $5.2 billion from $4.5 billion for thefiscal year ended July 30, 2011. This increase was primarily due to growth in our wholesale segment of $702.8 million, which includes net sales from anational conventional supermarket customer that began shipping in October 2011 and the strong performance of our UNFI Canada division. Our organicgrowth (sales growth excluding the impact of acquisitions) was due to the continued growth of the natural and organic products industry in general, increasedmarket share as a result of our30Table of Contentsfocus on service and value added services, and a broader selection of products, including specialty foods. We believe that the integration of our specialtybusiness has allowed us to attract customers that we would not have been able to attract without that business as many customers seek a single source for theirnatural, organic and specialty products. Our net sales for the fiscal year ended July 28, 2012 were also favorably impacted by moderate price inflation.In addition to net sales growth attributable to our organic growth, we also benefited from the inclusion of $25.4 million in incremental net sales resulting fromexpanded distribution to Whole Foods Market during fiscal 2012 following the acquisition of the Southwest and Rocky Mountain distribution business ofWhole Foods Distribution and expanded distribution agreement with Whole Foods Market in the first quarter of fiscal 2011 and approximately $4.2 million insales resulting from our acquisition of substantially all of the assets of a specialty food distribution business in the Ontario market in November 2011.Our net sales by customer type for the years ended July 28, 2012 and July 30, 2011 were as follows (in millions):Customer Type 2012Net Sales % of TotalNet Sales 2011Net Sales % of TotalNet Sales Independently owned natural products retailers $1,847 35%$1,693 37%Supernatural chains 1,883 36%1,627 36%Conventional supermarkets 1,246 24%991 22%Other 260 5%219 5%Total $5,236 100% $4,530 100% Net sales to our independent retailer channel increased by approximately $154 million, or 9.1% during the year ended July 28, 2012 compared to theyear ended July 30, 2011. While net sales in this channel have increased, they have grown at a slower rate than net sales in our supernatural and conventionalsupermarket channels, and therefore represent a lower percentage of our total net sales in fiscal 2012 compared to the prior year.Whole Foods Market is our only supernatural chain customer, and net sales to Whole Foods Market for the year ended July 28, 2012 increased byapproximately $256 million or 15.8% over the prior year and accounted for approximately 36% of our total net sales for the years ended July 28, 2012 andJuly 30, 2011. The increase in sales to Whole Foods Market is primarily due to the increases in same-store sales, and to a lesser extent, the expanded primarydistribution agreement noted above.Net sales to conventional supermarkets for the year ended July 28, 2012 increased by approximately $255 million, or 25.7% from fiscal 2011 andrepresented approximately 24% of total net sales in fiscal 2012 compared to 22% in fiscal 2011. The increase in net sales to conventional supermarkets wasprimarily due to a large national customer which we began servicing during the first quarter of fiscal 2012, as part of our strategy to be the sole supplier ofnatural, organic and specialty products to our conventional supermarket customers.Other net sales, which include sales to foodservice and sales from the United States to countries other than Canada, as well as sales through ourretail division, manufacturing division, and our branded product lines, increased by approximately $41 million or 18.7% during the fiscal year ended July28, 2012 over the prior fiscal year and accounted for approximately 5% of total net sales in fiscal 2012 and fiscal 2011.Cost of Sales and Gross ProfitOur gross profit increased approximately 11.1%, or $91.2 million, to $916.0 million for the year ended July 28, 2012, from $824.8 million for theyear ended July 30, 2011. Our gross profit as a percentage of net sales was 17.5% for the year ended July 28, 2012 and 18.2% for the year ended July 30,2011. The change in gross profit as a percentage of net sales is primarily due to the change in the mix of net sales by channel that began during the secondquarter of fiscal 2010 as well as higher inventory shrink related to perishable items and improper storage of products in certain categories, and use of thirdparties for inbound freight during fiscal 2012, partially offset by higher fuel surcharge revenue during the year ended July 28, 2012.Our gross profits are generally higher on net sales to independently owned retailers and lower on net sales in the conventional supermarket and thesupernatural channels. For the year ended July 28, 2012 approximately $512 million of our total net sales growth of $706 million was from increased netsales in the conventional supermarket and supernatural channels. As a result, approximately 60% of our total net sales in fiscal 2012 were to the conventionalsupermarket and supernatural channels compared to approximately 58% in fiscal 2011. This change in sales mix from 2011 to 2012 resulted in lower grossprofits as a percentage of sales during fiscal 2012. We anticipate net sales growth in the conventional supermarket and supernatural channels31Table of Contentswill continue to outpace growth in the independent and other channels.Operating ExpensesOur total operating expenses increased approximately 9.5%, or $65.7 million, to $760.8 million for the year ended July 28, 2012, from $695.1million for the year ended July 30, 2011. The increase in total operating expenses for the year ended July 28, 2012 was primarily due to higher sales volume,$5.1 million of severance and other restructuring expenses associated with the divestiture of our conventional non-food and general merchandise lines ofbusiness and $1.6 million in start-up expenses incurred in connection with onboarding a large national conventional supermarket customer. Operatingexpenses for the year ended July 30, 2011 included $6.3 million in restructuring and asset impairment charges associated with the divestiture of ourconventional non-foods and general merchandise lines of business.Total operating expenses for fiscal 2012 include share-based compensation expense of $11.4 million, compared to $9.2 million in fiscal 2011. Share-based compensation expense for the years ended July 28, 2012 and July 30, 2011 includes approximately $1.7 million and $0.7 million, respectively, inexpense related to performance share-based awards granted to our Chief Executive Officer related to certain financial goals for those various periods ended July28, 2012 and July 30, 2011. During fiscal 2012, $0.4 million was recognized related to a new performance-based equity compensation arrangement with a 2-year performance-based vesting component that was established for members of our executive leadership team. See Note 3 “Equity Plans” to our ConsolidatedFinancial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.As a percentage of net sales, total operating expenses decreased to approximately 14.5% for the year ended July 28, 2012, from approximately 15.3%for the year ended July 30, 2011. The decrease in total operating expenses as a percentage of net sales was primarily attributable to the growth in thesupernatural and conventional supermarket channels which in general have lower operating expenses, higher fixed cost coverage due to higher sales, as well asexpense control programs across all of our divisions. We were able to manage our fuel costs despite rising prices by locking in the price of a portion of ourexpected fuel usage, updating and revising existing routes to reduce miles traveled, reducing idle times and other similar measures. Our expansion intoLancaster, Texas, where our facility began servicing customers in late September 2010, has helped to further reduce our fuel costs as a percentage of net salesas we are able to reduce the number of miles traveled to serve our customers in Texas, Oklahoma, New Mexico, Arkansas and Louisiana who were previouslyprimarily served from our facility in Denver, Colorado. These improvements in our operating expenses were offset in part by higher health insurance costs,higher workers' compensation costs and the above described higher share-based compensation costs.Operating IncomeOperating income increased approximately 19.7%, or $25.5 million, to $155.2 million for the year ended July 28, 2012, from $129.7 million for the yearended July 30, 2011. As a percentage of net sales, operating income was 3.0% for the year ended July 28, 2012 compared to 2.9% for the year ended July 30,2011. The increase in operating income was primarily attributable to sales growth and lower operating expenses as a percentage of net sales during fiscal 2012compared to fiscal 2011.Other Expense (Income)Other expense (income) increased $1.2 million to $4.4 million for the year ended July 28, 2012, from $3.2 million for the year ended July 30, 2011. Interestexpense for the year ended July 28, 2012 decreased to $4.7 million from $5.0 million in the year ended July 30, 2011, but was negatively impacted by $0.3million related to the settlement in the fourth quarter of fiscal 2012 of the interest rate swap that we entered into in July 2005 in connection with our term loanthat we paid off in May 2012. The decrease in interest expense was due primarily to lower average debt levels during the year. Interest income for the year endedJuly 28, 2012 decreased to $0.7 million from $1.2 million in the year ended July 30, 2011, primarily as a result of lower average cash balances during theyear.Provision for Income TaxesOur effective income tax rate was 39.4% for the years ended July 28, 2012 and July 30, 2011. Our effective income tax rate in both fiscal years was primarilyaffected by state taxes in the states in which we operate. Certain incentive stock option expenses are not deductible for tax purposes unless a disqualifyingdisposition occurs. A disqualifying disposition occurs when the option holder sells shares within one year of exercising an incentive stock option and withintwo years of original grant. We receive a tax benefit in the period that the disqualifying disposition occurs. Our effective income tax rate will continue to beeffected by the tax impact related to incentive stock options and the timing of tax benefits related to disqualifying dispositions, however we expect this impactto diminish as in recent years we have granted non-qualified stock options in lieu of incentive stock options.Net Income32Table of ContentsReflecting the factors described in more detail above, net income increased $14.7 million to $91.3 million, or $1.86 per diluted share, for the yearended July 28, 2012, compared to $76.7 million, or $1.60 per diluted share on a lower share base, for the year ended July 30, 2011.Liquidity and Capital ResourcesWe finance our day to day operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating leases,trade payables and bank indebtedness. In addition, from time to time, we may issue equity and debt securities to finance our operations and acquisitions. Webelieve that our cash on hand and available credit through our amended and restated revolving credit facility as discussed below is sufficient for our operationsand planned capital expenditures over the next twelve months. We expect to generate an average of $50 million to $100 million in cash flow from operations peryear for the 2014 and 2015 fiscal years. We intend to continue to utilize this cash generated from operations to fund acquisitions, fund investment in workingcapital and capital expenditure needs, including expansion of our distribution facilities, and reduce our debt levels. We intend to manage capital expenditures toapproximately 1.4% of net sales for fiscal 2014, reflecting an increase over levels experienced in fiscal 2012 and fiscal 2013 as we construct new distributioncenters in New York and Wisconsin in fiscal 2014. We expect to finance these requirements with cash generated from operations and borrowings under ouramended and restated revolving credit facility. Our planned capital projects will provide both new and expanded facilities as well as technology that we believewill provide us with increased efficiency and the capacity to continue to support the growth of our customer base. Future investments and acquisitions may befinanced through equity, long-term debt negotiated at the time of the potential acquisition or borrowings under our amended and restated revolving creditfacility.In May 2012, we amended and restated our revolving credit facility, pursuant to which we now have a $500 million revolving credit facility whichmatures on May 24, 2017, of which up to $450.0 million is available to our U.S. subsidiaries and up to $50.0 million is available to UNFI Canada. Thiscredit facility also provides a one-time option, subject to approval by the lenders under the revolving credit facility, to increase the borrowing base by up to anadditional $100 million. The borrowings of the US portion of the credit facility accrue interest, at our option, at either (i) a base rate (generally defined as thehighest of (x) the Bank of America Business Capital prime rate, (y) the average overnight federal funds effective rate plus one-half percent (0.50%) per annumand (z) one-month LIBOR plus one percent (1%) per annum plus an initial margin of 0.50%, or (ii) LIBOR for one, two, three or six months or, if approvedby all affected lenders, nine months plus an initial margin of 1.50%. The borrowings on the Canadian portion of the credit facility for Canadian swing-lineloans, Canadian overadvance loans or Canadian protective advances accrue interest, at our option, at either (i) a prime rate (generally defined as the highest of(x) 0.50% over 30-day Reuters Canadian Deposit Offering Rate for bankers' acceptances, (y) the prime rate of Bank of America, N.A.'s Canada branch, and(z) a bankers' acceptance equivalent rate for a one month interest period plus 1.00% plus an initial margin of 0.50%, or (ii) the CDOR rate, and an initialmargin of 1.50%. All other borrowings on the Canadian portion of the credit facility must exclusively accrue interest under the CDOR rate plus the applicablemargin. The revolving credit facility supports our working capital requirements in the ordinary course of business and provides capital to grow our businessorganically or through acquisitions. Our borrowing base is determined as the lesser of (1) $500 million or (2) the fixed percentages of our previous fiscalmonth-end eligible accounts receivable and inventory levels. As of August 3, 2013, our borrowing base, based on eligible accounts receivable and inventorylevels, was $484.5 million. As of August 3, 2013, the Company had $130.6 million outstanding under our credit facility, $31.8 million in letter of creditcommitments and $2.9 million in reserves which generally reduces our available borrowing capacity under its revolving credit facility on a dollar for dollarbasis. Our resulting remaining availability was $319.3 million as of August 3, 2013. The revolving credit facility, as amended and restated, subjects us to aspringing minimum fixed charge coverage ratio (as defined in the underlying credit agreement) of 1.0 to 1.0 calculated at the end of each of our fiscal quarterson a rolling four quarter basis when aggregate availability (as defined in the underlying credit agreement) is less than the greater of (i) $35.0 million and(ii) 10% of the aggregate borrowing base. We were not subject to fixed charge coverage ratio covenants as of the fiscal year ended August 3, 2013.Our amended and restated revolving credit facility includes borrowing rates that are approximately 50 to 100 basis points higher than our prior revolvingcredit facility, depending on remaining availability. However, we do not expect our overall interest expense to increase significantly if rates remain relativelystable as we have terminated our higher fixed rate interest rate swap, which covered our term loan.In connection with amending and restating our revolving credit facility, we used a portion of our availability to pay off our term loan agreement, whichwas to mature on July 28, 2012. At that time, our interest rate swap entered into in July 2005 was settled concurrently with a payment of $0.3 million which isreflected within interest expense during the fiscal year ended July 28, 2012.Our capital expenditures for the 2013 fiscal year were $66.6 million, compared to $31.5 million for fiscal 2012, primarily driven by construction ofour new Aurora, Colorado distribution center. We believe that our capital requirements for fiscal 201433Table of Contentswill be between $80 and $95 million. We expect to finance these requirements with cash generated from operations and borrowings under our revolving creditfacility. Our planned capital projects will provide both additional warehouse space (including through the build out of our new Racine, Wisconsin distributionfacility in the village of Sturtevant and our Hudson Valley, New York distribution facility in the town of Montgomery) and technology that we believe willprovide us with increased efficiency and the capacity to continue to support the growth of our customer base. We believe that our future capital requirementsafter fiscal 2014 will be marginally lower than our anticipated fiscal 2014 requirements, as a percentage of net sales, although we plan to continue to invest intechnology and expand our facilities. Future investments and acquisitions will be financed through our revolving credit facility, or with the issuance of equityor long-term debt, negotiated at the time of the potential acquisition.Net cash provided by operations was $44.3 million for the year ended August 3, 2013, a decrease of $21.9 million from the $66.2 million provided byoperations for the year ended July 28, 2012. The primary reasons for the decrease in cash flows from operations for the year ended August 3, 2013 were anincrease in inventories of $123.9 million in part as a response to higher supplier out of stocks, and an increase in accounts receivable of $37.3 million due toour sales growth during the year, partially offset by net income of $107.9 million. Net cash provided by operations of $49.8 million for the year endedJuly 30, 2011 was primarily the result of an increase in net income, partially offset by changes in working capital. Days in inventory was 52 days atAugust 3, 2013, compared to 50 days at July 28, 2012. The increase in inventory is due in part to efforts to stabilize service levels. Days sales outstandingdecreased from 22 at July 28, 2012 to 21 days at August 3, 2013. Working capital increased by $104.3 million, or 17.0%, to $717.0 million at August 3,2013, compared to working capital of $612.7 million at July 28, 2012, primarily as a result of the increase in our inventory balances.Net cash used in investing activities increased $37.9 million to $72.3 million for the year ended August 3, 2013, compared to $34.5 million for the yearended July 28, 2012. The increase from the fiscal year ended July 28, 2012 was primarily due to an increase in capital spending associated with our Logan,New Jersey distribution center coupled with the acquisition of certain assets of three distribution companies during the first quarter of fiscal 2013.Net cash used in investing activities of $62.7 million for the year ended July 30, 2011 was primarily due to the purchase of the Rocky Mountain andSouthwest distribution business of Whole Foods Distribution, a wholly owned subsidiary of Whole Foods Market, during the year ended July 30, 2011.Net cash provided by financing activities was $22.3 million for the year ended August 3, 2013, primarily due to borrowings, net of repayments, underour amended and restated revolving credit facility of $15.9 million. Net cash used in financing activities was $32.8 million for the year ended July 28, 2012,primarily due to repayments on long-term debt of $47.4 million as we paid off our term loan with availability under our amended and restated revolving creditfacility. Net cash provided by financing activities was $16.3 million for the year ended July 30, 2011, primarily due to net proceeds from our secondaryequity offering of $138.3 million, partially offset by net repayments on borrowings on notes payable of $127.6 million.We may from time to time enter into commodity swap agreements to reduce price risk associated with our anticipated purchases of diesel fuel. Thesecommodity swap agreements hedge a portion of our expected fuel usage for the periods set forth in the agreements. We monitor the commodity (NYMEX #2Heating oil) used in our swap agreements to determine that the correlation between the commodity and diesel fuel is deemed to be "highly effective." During thefiscal years ended August 3, 2013 and July 28, 2012, we had no outstanding commodity swap agreements.In addition to the previously discussed interest rate and commodity swap agreements, from time-to-time we enter into fixed price fuel supply agreements.As of August 3, 2013, we are not a party to any agreements which required us to purchase diesel fuel. As of July 28, 2012, we had entered into agreementswhich required us to purchase a total of approximately 4.3 million gallons of diesel fuel at prices ranging from $3.33 to $3.91 per gallon through July 2013.These fixed price fuel agreements qualified for the "normal purchase" exception under ASC 815, Derivatives and Hedging as physical deliveries will occurrather than net settlements, therefore the fuel purchases under these contracts will be expensed as incurred and included within operating expenses.Commitments and ContingenciesThe following schedule summarizes our contractual obligations and commercial commitments as of August 3, 2013:34Table of Contents Payments Due by Period Total Less thanOne Year 1–3Years 3–5Years Thereafter (in thousands)Inventory purchase commitments$26,478 $26,478 Notes payable (1)130,594 — — 130,594 Long-term debt (2)34,110 1,019 2,194 2,391 28,506Deferred compensation12,287 1,163 2,640 2,227 6,257Long-term non-capitalized leases327,639 44,140 82,432 64,396 136,671Total$531,108 $72,800 $87,266 $199,608 $171,434(1) The notes payable obligations shown reflect the expiration of the credit facility, not necessarily the underlying individual borrowings. Notespayable does not included outstanding letters of credit of approximately $31.8 million at August 3, 2013 nor approximately $13.2 million in interest payments(including unused lines fees) projected to be due in future years (less than 1 year – $3.4 million; 1−3 years – $6.9 million; and 3-5 years $2.8 million) basedon the variable rates in effect at August 3, 2013. Variable rates, as well as outstanding principal balances, could change in future periods. See "Liquidity andCapital Resources" above and Note 6 "Notes Payable" to our Consolidated Financial Statements included in "Item 8. Financial Statements and SupplementaryData" of this Annual Report on Form 10-K for a discussion of our credit facility.(2) Long-term debt does not include approximately $26.2 million in interest payments projected to be due in future years (less than 1 year - $1.9million; 1-3 years - $4.8 million; 3-5 years - $4.5 million; thereafter - $15.0 million). See Note 7 "Long-Term Debt" to our Consolidated Financial Statementsincluded in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion of our long-term debt.Included in other liabilities in the consolidated balance sheets at August 3, 2013, the Company has a liability, including potential interest and penalties,of $1.4 million for uncertain tax positions that have been taken or are expected to be taken in various income tax returns. The Company does not know theultimate resolution of these uncertain tax positions and as such, does not know the ultimate timing of payments related to this liability. Accordingly, theseamounts are not included in the table above.SeasonalityGenerally, we do not experience any material seasonality. However, our sales and operating results may vary significantly from quarter to quarter due tofactors such as changes in our operating expenses, management's ability to execute our operating and growth strategies, personnel changes, demand for naturalproducts, supply shortages and general economic conditions.Recently Issued Financial Accounting StandardsIn February 2013, the Financial Accounting Standards Board issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting ofAmounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU No. 2013-02"). This update supersedes the presentation requirements forreclassifications out of accumulated other comprehensive income in ASU No. 2011-05, Presentation of Comprehensive Income, and ASU No. 2011-12,Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income inAccounting Standards Update No. 2011-05. ASU No. 2013-02 requires an entity to provide information about amounts reclassified out of accumulated othercomprehensive income by component and to present, either on the face of the financial statements or in a single note, any significant amount reclassified out ofaccumulated other comprehensive income in its entirety in the period, and the income statement line item affected by the reclassification. For other amounts thatare not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required underU.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 is effective for annual reporting periods that begin after December 15,2012, which will be the first quarter of our fiscal year ending August 2, 2014. The adoption of ASU No. 2013-02 is not expected to have a material impact onthe presentation of our consolidated financial statements.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.We are exposed to interest rate fluctuations on our borrowings. As more fully described in Note 8 "Fair Value Measurements" to the ConsolidatedFinancial Statements included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K, we have used interest rateswap agreements to modify variable rate obligations to fixed rate obligations.35Table of ContentsDuring the fiscal year ended July 28, 2012, we were a party to an interest rate swap agreement entered into in July 2005 (the "2005 swap"), which wasset to expire in July 2012 concurrent with the maturity of our term loan. The 2005 swap was terminated in connection with our repayment of all borrowingsunder the term loan during the fourth quarter of fiscal 2012. The 2005 swap had an initial notional principal amount of $50 million and provided for us topay interest for a seven-year period at a fixed rate of 4.70% while receiving interest for the same period at one-month LIBOR on the same notional principalamount. The 2005 swap had an amortizing notional amount which adjusted down on the dates payments were due on the underlying term loan. The 2005swap had been entered into as a hedge against LIBOR movements on current variable rate indebtedness at one-month LIBOR plus 1.00%, thereby fixing oureffective rate on the notional amount at 5.70%. We accounted for the 2005 swap using hedge accounting treatment because the derivative was determined to behighly effective in achieving offsetting changes in cash flows of the hedged item. Under this method of accounting, we had recorded a liability of $1.3 millionrepresenting the fair value of the swap as of July 30, 2011. There was no liability recorded as of July 28, 2012 due to the settlement of the swap in conjunctionwith the payoff of the underlying term loan in May 2012. We do not enter into derivative agreements for trading purposes.At August 3, 2013, we had long-term floating rate debt under our amended and restated revolving credit facility of $130.6 million and long-term fixedrate debt of $0.6 million, representing 99.5% and 0.5%, respectively, of our long-term borrowings. At July 28, 2012, we had long-term floating rate debtunder our amended and restated revolving credit facility of $115.0 million and long-term fixed rate debt of $1.0 million, representing 99.1% and 0.9%,respectively, of our long-term borrowings. Holding other debt levels constant, a 25 basis point decrease in interest rates would change the unrealized fairmarket value of the fixed rate debt by approximately $0.6 million and $3,000 at August 3, 2013 and July 28, 2012, respectively. The increase from the prioryear is due to the financing obligation recorded related to our Aurora, Colorado facility.36Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAThe financial statements listed below are filed as part of this Annual Report on Form 10-K.INDEX TO FINANCIAL STATEMENTSUnited Natural Foods, Inc. and Subsidiaries:PageReport of Independent Registered Public Accounting Firm38Consolidated Balance Sheets39Consolidated Statements of Income40Consolidated Statements of Comprehensive Income 41Consolidated Statements of Stockholders' Equity42Consolidated Statements of Cash Flows43Notes to Consolidated Financial Statements4437Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of Directors and StockholdersUnited Natural Foods, Inc.:We have audited the accompanying consolidated balance sheets of United Natural Foods, Inc. and subsidiaries as of August 3, 2013 and July 28,2012, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the fiscal years in the three-year period ended August 3, 2013. We also have audited United Natural Foods, Inc.'s internal control over financial reporting as of August 3, 2013, based oncriteria established in the Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). United Natural Foods, Inc.'s management is responsible for these consolidated financial statements, for maintaining effective internal control overfinancial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's AnnualReport on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion onthe Company's internal control over financial reporting based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whethereffective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements includedexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used andsignificant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reportingincluded obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as weconsidered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internalcontrol over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of United NaturalFoods, Inc. and subsidiaries as of August 3, 2013 and July 28, 2012, and the results of their operations and their cash flows for each of the fiscal years in thethree-year period ended August 3, 2013, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, inall material respects, effective internal control over financial reporting as of August 3, 2013, based on criteria established in Internal Control-IntegratedFramework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.Providence, Rhode IslandOctober 1, 201338Table of ContentsUNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except per share data) August 3, 2013 July 28, 2012ASSETS Current assets: Cash and cash equivalents$11,111 $16,122Accounts receivable, net of allowance of $9,271 and $6,249, respectively339,590 305,177Inventories702,161 578,555Deferred income taxes23,822 25,353Prepaid expenses and other current assets38,534 21,654Total current assets1,115,218 946,861Property & equipment, net338,594 278,455Goodwill201,874 193,741Intangible assets, net of accumulated amortization of $14,214 and $10,809, respectively49,540 52,496Other long-term assets24,682 22,393Total assets$1,729,908 $1,493,946LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable$283,851 $242,179Accrued expenses and other current liabilities113,397 91,632Current portion of long-term debt1,019 350Total current liabilities398,267 334,161Notes payable130,594 115,000Deferred income taxes41,474 36,260Other long-term liabilities27,336 29,174Long-term debt, excluding current portion33,091 635Total liabilities630,762 515,230Commitments and contingencies (Note 11) Stockholders' equity: Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding— —Common stock, $0.01 par value, authorized 100,000 shares; 49,330 issued and outstanding shares at August 3,2013; 49,011 issued and outstanding shares at July 28, 2012493 490Additional paid-in capital380,109 364,598Unallocated shares of Employee Stock Ownership Plan(39) (89)Accumulated other comprehensive (loss) income(1,092) 1,896Retained earnings719,675 611,821Total stockholders' equity1,099,146 978,716Total liabilities and stockholders' equity$1,729,908 $1,493,946 See accompanying notes to consolidated financial statements.39Table of ContentsUNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share data) Fiscal year ended August 3, 2013 July 28, 2012 July 30, 2011Net sales$6,064,355 $5,236,021 $4,530,015Cost of sales5,039,279 4,320,018 3,705,205Gross profit1,025,076 916,003 824,810Operating expenses837,953 755,744 688,859Restructuring and asset impairment expenses1,629 5,101 6,270Total operating expenses839,582 760,845 695,129Operating income185,494 155,158 129,681Other expense (income): Interest expense5,897 4,734 5,000Interest income(632) (715) (1,226)Other, net6,113 356 (528)Total other expense, net11,378 4,375 3,246Income before income taxes174,116 150,783 126,435Provision for income taxes66,262 59,441 49,762Net income$107,854 $91,342 $76,673Basic per share data: Net income$2.19 $1.87 $1.62Weighted average basic shares of common stock49,217 48,766 47,459Diluted per share data: Net income$2.18 $1.86 $1.60Weighted average diluted shares of common stock49,509 49,100 47,815 See accompanying notes to consolidated financial statements.40Table of ContentsUNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands) Fiscal year ended August 3, 2013 July 28, 2012 July 30, 2011 Pre-taxTaxAfter-tax Pre-taxTaxAfter-tax Pre-taxTaxAfter-tax Amount(expense) benefitAmount Amount(expense) benefitAmount Amount(expense) benefitAmountNet income $107,854 $91,342 $76,673Other comprehensive income(loss): Foreign currency translationadjustments$(2,988)$—$(2,988) $(3,729)$—$(3,729) $5,285$—$5,285Change in fair value of swapagreements——— 1,259(496)763 1,234(502)732Total other comprehensiveincome (loss)$(2,988)$—$(2,988) $(2,470)$(496)$(2,966) $6,519$(502)$6,017Total comprehensive income $104,866 $88,376 $82,690See accompanying notes to consolidated financial statements.41Table of ContentsUNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock Treasury Stock AdditionalPaid inCapital UnallocatedShares ofESOP AccumulatedOtherComprehensive(Loss) Income RetainedEarnings TotalStockholders'Equity(In thousands)Shares Amount Shares Amount Balances at July 31,201043,558 $435 27 $(708) $188,727 $(713) $(1,155) $443,861 $630,447Allocation of sharesto ESOP 171 171Issuance of commonstock pursuant tosecondary offering,net of direct offeringcosts4,428 44 138,257 138,301Stock optionexercises andrestricted stockvestings, net534 6 7,348 7,354Share-basedcompensation 9,159 9,159Tax benefitassociated with stockplans 1,545 1,545Fair value of swapagreement, net of tax 732 732Foreign currencytranslation 5,285 5,285Net income 76,673 76,673Balances at July 30,201148,520 $485 27 $(708) $345,036 $(542) $4,862 $520,534 $869,667Allocation of sharesto ESOP 453 453Stock optionexercises andrestricted stockvestings, net491 5 (27) 708 5,386 (55) 6,044Share-basedcompensation 11,372 11,372Tax benefitassociated with stockplans 2,804 2,804Fair value of swapagreements, net oftax 763 763Foreign currencytranslation (3,729) (3,729)Net income 91,342 91,342Balances at July 28,201249,011 $490 — $— $364,598 $(89) $1,896 $611,821 $978,716Allocation of sharesto ESOP 50 50Stock optionexercises andrestricted stockvestings, net319 3 (1,545) (1,542)Share-basedcompensation 15,104 15,104Tax benefitassociated with stockplans 1,952 1,952Foreign currencytranslation (2,988) (2,988)Net income 107,854 107,854Balances atAugust 3, 201349,330 $493 — $— $380,109 $(39) $(1,092) $719,675 $1,099,146See accompanying notes to consolidated financial statements.42Table of ContentsUNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal year ended(In thousands)August 3, 2013July 28, 2012 July 30, 2011CASH FLOWS FROM OPERATING ACTIVITIES: Net income$107,854$91,342 $76,673Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization42,39839,560 35,296Deferred income tax expense (benefit)6,780(6,115) 15,520Share-based compensation15,10411,372 9,159Excess tax benefit from share-based payment arrangements(1,952)(2,804) (1,545)Gain on disposals of property and equipment(513)(313) (42)Impairment on long-term assets—— 5,790Impairment of indefinite lived intangibles1,629— 200Unrealized (gain) loss on foreign exchange(698)(468) 318Provision for doubtful accounts4,2273,532 635 Non-cash interest expense651— —Changes in assets and liabilities, net of acquired companies: Accounts receivable(37,295)(51,193) (39,791)Inventories(123,904)(62,822) (66,283)Prepaid expenses and other assets(17,702)15,050 (12,283)Accounts payable34,97416,095 9,583Accrued expenses12,77813,008 16,614Net cash provided by operating activities44,33166,244 49,844CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures(66,554)(31,492) (40,778)Purchases of acquired businesses, net of cash acquired(8,135)(3,297) (22,061)Proceeds from disposals of property and equipment2,368332 96Net cash used in investing activities(72,321)(34,457) (62,743)CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from common stock issuance—— 138,301Proceeds from borrowings under revolving credit line610,0461,021,517 957,662Repayments of borrowings under revolving credit line(594,107) (1,021,517) (1,085,232)Repayments of long-term debt(353)(47,447) (5,033)Increase in bank overdraft6,3478,673 1,739Proceeds from exercise of stock options1,9427,571 10,162Payment of employee restricted stock tax withholdings(3,484)(1,526) (2,808)Excess tax benefit from share-based payment arrangements1,9522,804 1,545Capitalized debt issuance costs—(2,905) —Net cash provided by (used in) financing activities22,343(32,830) 16,336Effect of exchange rate changes on cash and cash equivalents636 298 (372)NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(5,011) (745) 3,065 Cash and cash equivalents at beginning of period16,12216,867 13,802Cash and cash equivalents at end of period$11,111$16,122 $16,867Supplemental disclosures of cash flow information: Non-cash financing activity$32,826 $— $—Non-cash investing activity$32,826 $— $—Cash paid for interest$5,246$4,734 $4,752Cash paid for federal and state income taxes, net of refunds$64,367$52,666 $42,018See accompanying notes to consolidated financial statements.43Table of ContentsUNITED NATURAL FOODS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1.SIGNIFICANT ACCOUNTING POLICIES(a)Nature of BusinessUnited Natural Foods, Inc. and subsidiaries (the "Company") is a leading distributor and retailer of natural, organic and specialty products. TheCompany sells its products primarily throughout the United States and Canada.(b)Basis of PresentationThe accompanying financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompanytransactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year'spresentation.The fiscal year of the Company ends on the Saturday closest to July 31. Fiscal 2013, 2012 and 2011 ended on August 3, 2013, July 28, 2012 andJuly 30, 2011, respectively. Fiscal year 2013 contained 53 weeks and fiscal years 2012 and 2011 each contained 52 weeks. Each of the Company's interimquarters consisted of 13 weeks except for the fourth quarter of fiscal year 2013 which contained 14 weeks.Net sales consists primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns andallowances. Net sales also includes amounts charged by the Company to customers for shipping and handling, and fuel surcharges. The principalcomponents of cost of sales include the amount paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring theproduct to the Company's distribution centers. Cost of sales also includes amounts incurred by the Company's manufacturing subsidiary, United NaturalTrading Co., which does business as Woodstock Farms Manufacturing, for inbound transportation costs and depreciation for manufacturing equipmentoffset by consideration received from suppliers in connection with the purchase or promotion of the suppliers' products. Operating expenses include salariesand wages, employee benefits (including payments under the Company's Employee Stock Ownership Plan), warehousing and delivery, selling, occupancy,insurance, administrative, share-based compensation and amortization expense. Operating expenses also include depreciation expense related to the wholesaleand retail divisions. Other expense (income) includes interest on outstanding indebtedness, interest income and miscellaneous income and expenses. Theconsolidated statements of cash flows for the fiscal years ended July 28, 2012 and July 30, 2011 have been adjusted to properly present proceeds andborrowings related to the Company's revolving credit facility on a gross basis. These amounts were previously presented on a net basis. The revisions werenot material to the Company's consolidated financial statements as a whole.(c)Cash EquivalentsCash equivalents consist of highly liquid investments with original maturities of three months or less.(d)Inventories and Cost of SalesInventories consist primarily of finished goods and are stated at the lower of cost or market, with cost being determined using the first-in, first-out(FIFO) method. Allowances received from suppliers are recorded as reductions in cost of sales upon the sale of the related products.(e)Property and EquipmentProperty and equipment are stated at cost less accumulated depreciation and amortization. Equipment under capital leases is stated at the lower of thepresent value of minimum lease payments at the inception of the lease or the fair value of the asset. As of August 3, 2013, property and equipment includes theCompany's non-cash capital expenditures made by the landlord for our Aurora, Colorado distribution center and related accumulated depreciation. Refer toNote 7, Long-Term Debt, for additional information regarding this transaction. Depreciation and amortization of property and equipment is computed on astraight-line basis, over the estimated useful lives of the assets or, when applicable, the life of the lease, whichever is shorter.Applicable interest charges incurred during the construction of new facilities may be capitalized as one of the elements of cost and amortized over theassets' estimated useful lives. There was no interest capitalized during the fiscal years ended August 3, 2013, July 28, 2012 or July 30, 2011.Property and equipment consisted of the following at August 3, 2013 and July 28, 2012:44Table of Contents OriginalEstimatedUseful Lives(Years) 2013 2012 (In thousands, except years)Land $12,950 $13,311Buildings and improvements20-40 192,837 160,940Leasehold improvements5-20 97,749 85,648Warehouse equipment3-30 117,999 104,310Office equipment3-10 74,003 68,674Computer software3-7 63,333 50,998Motor vehicles3-7 4,461 4,562Construction in progress 23,298 12,072 586,630 500,515Less accumulated depreciation and amortization 248,036 222,060Net property and equipment $338,594 $278,455Depreciation expense amounted to $37.6 million, $35.2 million and $31.1 million for the fiscal years ended August 3, 2013, July 28, 2012 andJuly 30, 2011, respectively.(f)Income TaxesThe Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities arerecognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and theirrespective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which thosetemporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income inthe period that includes the enactment date. The Company recognizes interest and penalties related to income taxes as a component of income tax expense.(g)Long-Lived AssetsManagement reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes incircumstances indicate that the carrying value of the assets may not be recoverable. Cash flows expected to be generated by the related assets are estimated overthe assets' useful lives based on updated projections. If the evaluation indicates that the carrying amount of an asset may not be recoverable, the potentialimpairment is measured based on a projected discounted cash flow model.(h)Goodwill and Intangible AssetsGoodwill represents the excess of cost over the fair value of net assets acquired in a business combination. Goodwill and other intangible assets withindefinite lives are not amortized. Intangible assets with definite lives are amortized on a straight-line basis over the following lives:Customer relationships7-10 yearsTrademarks and tradenames4-10 yearsGoodwill is assigned to the reporting units that are expected to benefit from the synergies of the business combination. The Company is required to testgoodwill for impairment at least annually, and between annual tests if events occur or circumstances change that would more likely than not reduce the fairvalue of a reporting unit below its carrying amount. The Company has elected to perform its annual tests for indications of goodwill impairment during thefourth quarter of each fiscal year.The Company's reporting units are at or one level below the operating segment level. Approximately 91.2% of the Company's goodwill is within itswholesale reporting unit. In accordance with Accounting Standards Update ("ASU") No. 2011-08, Intangibles- Goodwill and Other (Topic 350): TestingGoodwill for Impairment ("ASU 2011-08"), the Company is allowed to perform a qualitative assessment for goodwill impairment unless it believes it ismore likely than not that a reporting45Table of Contentsunit's fair value is less than the carrying value. The thresholds used by the Company for this determination in fiscal 2013 were for any reporting units that(1) have passed their previous two-step test with a margin of calculated fair value versus carrying value of at least 20%, (2) have had no significant changes totheir working capital structure, and (3) have current year income which is at least 85% of prior year amounts. Based on the qualitative assessment performedfor fiscal 2013, all of the Company's reporting units met these thresholds. As each reporting unit's net income has not decreased more than 15% and theirworking capital requirements have not increased significantly, no quantitative testing was performed in fiscal 2013.If a reporting unit did not meet the thresholds above, the Company would have performed a two-step goodwill impairment analysis. The first step toidentify potential impairment, involves comparing each reporting unit's estimated fair value to its carrying value, including goodwill. Each reporting unitregularly prepares discrete operating forecasts and uses these forecasts as the basis for the assumptions used in the discounted cash flow analysis. If theestimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value,there is an indication of potential impairment and the second step is performed to measure the amount of impairment. If required, the second step involvescalculating an implied fair value of goodwill for each reporting unit for which the first step indicated potential impairment. The implied fair value of goodwillis determined in a manner similar to the amount of goodwill calculated in a business combination, by measuring the excess of the estimated fair value of thereporting unit, as determined in the first step, over the aggregate estimated fair values of the individual assets, liabilities and identifiable. If the implied fairvalue of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to areporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess.Intangible assets with indefinite lives are tested for impairment at least annually during the fourth quarter and any affected intangible asset is reviewed ifevents occur or circumstances change that would indicate that the value of the asset may be impaired. Impairment is measured as the difference between thefair value of the asset and its carrying value. In the first quarter of fiscal 2013, the Company entered into an agreement to terminate its licensing agreement withthe former owners of an acquired business. In connection with this termination agreement, during the three months ended October 27, 2012, the Companyrecognized an impairment of $1.6 million representing the remaining unamortized balance of the intangible asset. In accordance with ASU No. 2012-02,Intangibles- Goodwill and Other (Topic 350): Testing Indefinite Lived Intangible Assets for Impairment ("ASU 2012-02"), the Company is allowed toperform a qualitative assessment for intangible asset impairment unless it believes it is more likely than not that an intangible asset's fair value is less than thecarrying value. The thresholds used by the Company for this determination in the fourth quarter of fiscal 2013 were for any intangible assets (or groups ofassets) that (1) have passed their previous two-step test with a margin of calculated fair value versus carrying value of at least 20% and (2) have current yearincome which is at least 85% of prior year amounts. The Company's only indefinite lived intangible assets are the branded product line asset group. As ofAugust 3, 2013, the Company's annual assessment of its indefinite lived intangible assets indicated that no impairment existed.The changes in the carrying amount of goodwill and the amount allocated by reportable segment for the years presented are as follows (in thousands): Wholesale Other TotalGoodwill as of July 30, 2011$174,612 $17,331 $191,943Goodwill adjustment for prior year business combinations2,857 200 3,057Change in foreign exchange rates(1,259) — (1,259)Goodwill as of July 28, 2012$176,210 $17,531 $193,741Goodwill from current year business combinations8,979 — 8,979Contingent consideration for prior year business combinations— 200 200Change in foreign exchange rates(1,046) — (1,046)Goodwill as of August 3, 2013$184,143 $17,731 $201,87446Table of ContentsThe following table presents the detail of the Company's other intangible assets (in thousands): August 3, 2013 July 28, 2012 Gross CarryingAmount AccumulatedAmortization Net Gross CarryingAmount AccumulatedAmortization NetAmortizing intangible assets: Customer relationships$34,704 $14,136 $20,568 $32,120 $10,286 $21,834Trademarks and tradenames771 78 693 3,030 523 2,507Total amortizing intangible assets35,475 14,214 21,261 35,150 10,809 24,341Indefinite lived intangible assets: Trademarks and tradenames28,279 — 28,279 28,155 — 28,155Total$63,754 $14,214 $49,540 $63,305 $10,809 $52,496Amortization expense was $4.8 million, $4.3 million and $3.5 million for the years ended August 3, 2013, July 28, 2012 and July 30, 2011,respectively. The estimated future amortization expense for the next five fiscal years on finite lived intangible assets existing as of August 3, 2013 is shownbelow:Fiscal Year:(In thousands)2014$3,97320153,97320162,94120172,63220182,1752019 and thereafter5,567 $21,261(i)Revenue Recognition and Concentration of Credit RiskThe Company records revenue upon delivery of products. Revenues are recorded net of applicable sales discounts and estimated sales returns. Salesincentives provided to customers are accounted for as reductions in revenue as the related revenue is recorded. The Company's sales are primarily to customerslocated throughout the United States and Canada.Whole Foods Market, Inc. was the Company's largest customer in each fiscal year presented. Whole Foods Market, Inc. accounted for approximately36% of the Company's net sales for the years ended August 3, 2013, July 28, 2012 and July 30, 2011. There were no other customers that individuallygenerated 10% or more of the Company's net sales.The Company analyzes customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels whenevaluating the adequacy of its allowance for doubtful accounts. In instances where a reserve has been recorded for a particular customer, future sales to thecustomer are conducted using either cash-on-delivery terms, or the account is closely monitored so that as agreed upon payments are received, orders arereleased; a failure to pay results in held or cancelled orders.(j)Fair Value of Financial InstrumentsThe carrying amounts of the Company's financial instruments including cash, accounts receivable, accounts payable and certain accrued expensesapproximate fair value due to the short-term nature of these instruments.The following estimated fair value amounts have been determined by the Company using available market information and appropriate valuationmethodologies. Refer to Note 8, Fair Value Measurements, for additional information regarding the fair value hierarchy. The fair value of notes payable andlong-term debt are based on the instruments' interest rate, terms, maturity date and collateral, if any, in comparison to the Company's incremental borrowingrate for similar financial instruments. However, considerable judgment is required in interpreting market data to develop the estimates of fair value.Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.47Table of Contents August 3, 2013 July 28, 2012 Carrying Value Fair Value Carrying Value Fair Value (In thousands)Assets: Cash and cash equivalents$11,111 $11,111 $16,122 $16,122Accounts receivable339,590 339,590 305,177 305,177Notes receivable3,315 3,315 3,703 3,703Liabilities: Accounts payable283,851 283,851 242,179 242,179Notes payable130,594 130,594 115,000 115,000Long-term debt, including current portion34,110 36,230 985 988(k)Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actualresults reported in future periods may be based on amounts that differ from those estimates.(l)Notes Receivable, TradeThe Company issues trade notes receivable to certain customers under two basic circumstances; inventory purchases for initial store openings andoverdue accounts receivable. Notes issued in connection with store openings are generally receivable over a period not to exceed thirty-six months. Notes issuedin connection with overdue accounts receivable may extend for periods greater than one year. All notes are issued at a market interest rate and contain certainguarantees and collateral assignments in favor of the Company.(m)Share-Based CompensationThe Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")718, Stock Compensation("ASC 718") effective August 1, 2005. ASC 718 requires the recognition of the fair value of share-based compensation in net income. The Company has fourshare-based employee compensation plans, which are described more fully in Note 3. Share-based compensation consists of stock options, restricted stockawards, restricted stock units, performance shares and performance units. Stock options are granted to employees and directors at exercise prices equal to thefair market value of the Company's stock at the dates of grant. Generally, stock options, restricted stock awards and restricted stock units granted toemployees vest ratably over 4 years from the grant date and grants to members of the Company's Board of Directors vest ratably over 2 years with one thirdvesting immediately. Beginning in fiscal 2008, the Company's President and Chief Executive Officer has been granted performance shares and performanceunits which have vested in accordance with the terms of the related Performance Share and Performance Unit agreements. During fiscal 2013 and fiscal 2012,the Company granted performance-based stock units to its executive officers that will vest if the Company achieves certain performance metrics as of and forthe years ended August 2, 2014 and August 3, 2013, respectively. The Company recognizes share-based compensation expense on a straight-line basis over therequisite service period of the individual grants, which generally equals the vesting period.ASC 718 also requires that compensation expense be recognized for only the portion of share-based awards that are expected to vest. Therefore, we applyestimated forfeiture rates that are derived from historical employee and director termination activity to reduce the amount of compensation expense recognized. Ifthe actual forfeitures differ from the estimate, additional adjustments to compensation expense may be required in future periods.The Company receives an income tax deduction for restricted stock awards and restricted stock units when they vest and for non-qualified stockoptions exercised by employees equal to the excess of the fair market value of its common stock on the vesting or exercise date over the exercised price. Excesstax benefits (tax benefits resulting from tax deductions in excess of compensation cost recognized) are presented as a cash inflow provided by financingactivities in the accompanying consolidated statement of cash flows.48Table of Contents(n)Earnings Per ShareBasic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Dilutedearnings per share is calculated by adding the dilutive potential common shares to the weighted average number of common shares that were outstandingduring the period. For purposes of the diluted earnings per share calculation, outstanding stock options, restricted stock awards, restricted stock units andperformance-based awards, if applicable, are considered common stock equivalents, using the treasury stock method. A reconciliation of the weighted averagenumber of shares outstanding used in the computation of the basic and diluted earnings per share for all periods presented follows: Fiscal year ended August 3, 2013 July 28, 2012 July 30, 2011 (In thousands)Basic weighted average shares outstanding49,217 48,766 47,459Net effect of dilutive common stock equivalents based upon the treasury stock method292 334 356Diluted weighted average shares outstanding49,509 49,100 47,815Potential anti-dilutive share-based payment awards excluded from the computation above121 88 99(o)Comprehensive Income (Loss)Comprehensive income (loss) is reported in accordance with ASU No. 2011-05, Presentation of Comprehensive Income, and includes net income andthe change in other comprehensive income (loss). Other comprehensive income (loss) is comprised of the net change in fair value of derivative instrumentsdesignated as cash flow hedges, as well as foreign currency translation related to the translation of UNFI Canada, Inc. ("UNFI Canada") from the functionalcurrency of Canadian dollars to U.S. dollar reporting currency. For all periods presented, the Company displays comprehensive income (loss) and itscomponents in the consolidated statements of comprehensive income.(p)Derivative Financial InstrumentsThe Company is exposed to market risks arising from changes in interest rates, fuel costs, and with the creation and operation of UNFI Canada,foreign currency exchange rates. The Company uses derivatives principally in the management of interest rate and fuel price exposure. From time to time theCompany may use foreign contracts to hedge transactions in foreign currency. The Company does not utilize derivatives that contain leverage features. Forderivative transactions accounted for as hedges, on the date the Company enters into the derivative transaction, the exposure is identified. The Companyformally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking thehedge transaction. In this documentation, the Company specifically identifies the asset, liability, firm commitment, forecasted transaction, or net investmentthat has been designated as the hedged item and states how the hedging instrument is expected to reduce the risks related to the hedged item. The Companymeasures effectiveness of its hedging relationships both at hedge inception and on an ongoing basis as needed. As of August 3, 2013, the Company was not aparty to any derivative financial instruments.(q)Shipping and Handling Fees and CostsThe Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight aregenerally recorded in cost of sales, whereas shipping and handling costs for selecting, quality assurance, and outbound transportation are recorded inoperating expenses. Outbound shipping and handling costs, totaled $358.8 million, $295.5 million and $266.7 million for the fiscal years ended August 3,2013, July 28, 2012 and July 30, 2011, respectively. The Company began allocating employee benefit expenses to shipping and handling fees and costs infiscal 2013. Outbound shipping and handling costs for fiscal 2012 and 2011 exclude employee benefit expenses.49Table of Contents(r)Reserves for Self-InsuranceThe Company is primarily self-insured for workers' compensation, and general and automobile liability insurance. It is the Company's policy to recordthe self-insured portion of workers' compensation and automobile liabilities based upon actuarial methods to estimate the future cost of claims and relatedexpenses that have been reported but not settled, and that have been incurred but not yet reported. Any projection of losses concerning workers' compensationand automobile liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affectinglitigation trends, benefit level changes and claim settlement patterns.(s)Operating Lease ExpensesThe Company records lease expense via the straight-line method. For leases with step rent provisions whereby the rental payments increase over the lifeof the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense based on a straight-line basis based on the totalminimum lease payments to be made over the expected lease term.(t)Recently Issued Accounting PronouncementsIn February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of AccumulatedOther Comprehensive Income ("ASU 2013-02"). This update supersedes the presentation requirements for reclassifications out of accumulated othercomprehensive income in ASU No. 2011-05, Presentation of Comprehensive Income, and ASU No. 2011-12, Deferral of the Effective Date for Amendmentsto the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2013-02requires an entity to provide information about amounts reclassified out of accumulated other comprehensive income by component and to present, either onthe face of the financial statements or in a single note, any significant amount reclassified out of accumulated other comprehensive income in its entirety in theperiod, and the income statement line item affected by the reclassification. For other amounts that are not required under U.S. GAAP to be reclassified in theirentirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about thoseamounts. ASU No. 2013-02 is effective for annual reporting periods that begin after December 15, 2012, which will be the first quarter of the Company'sfiscal year ending August 2, 2014. The adoption of ASU No. 2013-02 is not expected to have a material impact on the presentation of the Company'sconsolidated financial statements.2.ACQUISITIONSWholesale SegmentBroadline Distribution Acquisitions. During the first quarter of fiscal 2013, the Company completed three business combinations related to theacquisition of certain assets of three distribution companies. The total consideration related to these acquisitions was approximately $9.2 million, includingcash consideration (net of cash acquired) of $8.1 million. In addition, certain of the asset purchase agreements related to these acquisitions provide for futurecontingent consideration payments of up to $3.7 million through February 2017. Furthermore, in connection with one of the acquisitions, the Companygranted restricted stock units which have pro-rata time-based vesting over four years similar to the structure of the majority of the awards of restricted stockunits granted to employees, but for which the vesting may be fully accelerated after two years if net sales of the acquired business, as defined in the applicableasset purchase agreement, meets or exceeds a targeted amount in either of the first two years following consummation of the Company's acquisition of thebusiness. The preliminary fair value of the identifiable intangible assets acquired in the three acquisitions was determined by using an income approach. Theidentifiable intangible assets recorded based on the provisional valuations include customer lists of $3.1 million, which are being amortized on a straight-linebasis over estimated useful lives of approximately 5 - 10 years. Significant assumptions utilized in the income approach were based on company-specificinformation and projections, which are not observable in the market and are considered Level 3 measurements as defined by authoritative guidance. TheCompany recorded a total of $9.0 million of goodwill as a result of these acquisitions. These three acquisitions were financed through borrowings under theCompany’s amended and restated revolving credit facility. The Company is still completing the final valuations of the acquired intangibles for theseacquisitions and therefore the Company’s estimates and assumptions are subject to change within the measurement period. Acquisition costs related to thesepurchases were insignificant, have been expensed as incurred and are included within “Operating Expenses” in the Consolidated Statements of Income. Eachof these businesses were absorbed by the operations of the Company’s broadline distribution business, therefore the Company does not record the expenses forthese businesses separately from the rest of the broadline distribution business and it is not possible to provide complete financial results for each acquisitionseparately or in total. Net sales resulting from these three acquisitions totaled approximately $53.8 million for the fiscal year ended August 3, 2013.50Table of ContentsCanadian expansion. During the second quarter of fiscal 2012, through its wholly-owned subsidiary, UNFI Canada, the Company acquiredsubstantially all of the assets of a private specialty food distribution business located in Ontario, Canada. Total cash consideration paid in connection withthis acquisition was $3.0 million. In addition, the asset purchase agreement provides for potential earn-outs of up to $1.95 million from November 2011through November 2014. This acquisition was financed through borrowings under the Company's then existing revolving credit facility. The fair valueassigned to an identifiable intangible asset acquired was determined by using an income approach. The identifiable intangible asset recorded based on theprovisional valuation includes a customer list of $0.8 million, which is being amortized on a straight-line basis over an estimated useful life of approximately9.7 years. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable inthe market and are considered Level 3 measurements as defined by authoritative guidance. Acquisition costs related to this purchase were insignificant, andhave been expensed as incurred and are included within "Operating Expenses" in the Consolidated Statements of Income. Net sales resulting from theacquisition have been included in the Company's results since November 15, 2011, however, neither these sales nor the increase in total assets related to thisacquisition were significant compared to the Company's consolidated amounts.Whole Foods Distribution. During the first quarter of fiscal 2012, the Company finalized its valuation of the customer relationship intangible assetrelated to the first quarter fiscal 2011 acquisition of the Rocky Mountain and Southwest distribution business of Whole Foods Market Distribution, Inc.("Whole Foods Distribution"), a wholly owned subsidiary of Whole Foods Market, Inc., whereby the Company (i) acquired inventory at Whole FoodsDistribution's Aurora, Colorado and Austin, Texas distribution centers; (ii) acquired substantially all of Whole Foods Distribution's assets, other than theinventory, at the Aurora, Colorado distribution center; (iii) assumed Whole Foods Distribution's obligations under the existing lease agreement related to theAurora, Colorado distribution center; and (iv) hired substantially all of Whole Foods Distribution's employees working at the Aurora, Colorado distributioncenter. In connection with the transaction, we also amended our distribution agreement in the first quarter of fiscal 2011 to become the primary distributor toWhole Foods Market, Inc. in those regions. Net sales resulting from the transaction totaled approximately $131.6 million for the year ended July 30, 2011. Forthe year ended July 28, 2012, net sales resulting from the transaction in the first two months of the fiscal year, which correspond to when we had not yetbegun primary distribution in those regions during the prior year, totaled approximately $25.4 million. The Company does not record the expenses for thisbusiness separately from the rest of its broadline distribution business, and therefore it is impracticable for the Company to provide complete financial resultsfor this business.The following table summarizes the consideration paid for the acquisition and the amounts of assets acquired and liabilities assumed recognized at theacquisition date: (In thousands)Inventory$6,911Property & equipment1,500Customer relationships and other intangible assets7,900Goodwill5,600Total assets$21,911Liabilities—Cash consideration paid$21,911Other SegmentThe Company recorded an increase of $0.1 million to its intangible assets during the years ended August 3, 2013 and July 28, 2012 in recognition ofongoing contingent consideration payments in the form of royalties ranging between 2%- 4% of net sales (as defined in the applicable purchase agreement)related to two of its acquisitions of assets of branded product companies during fiscal 2009. The acquisition of assets of a third branded product companyduring fiscal 2009 requires ongoing contingent consideration payments in the form of earn-outs over a period of 5 years from the acquisition date of November2008. These earn-outs are based on tiers of net sales for the trailing 12 months, and $0.2 million was paid during the year ended August 3, 2013.3.EQUITY PLANSThe Company recognized total share-based compensation expense of $15.1 million for the fiscal year ended August 3, 2013, compared to share-basedcompensation expense of $11.4 million and $9.2 million for the fiscal years ended July 28, 2012 and July 30, 2011, respectively. The share-basedcompensation expense related to performance-based share awards,51Table of Contentsincluding the 2-year long-term incentive awards granted during fiscal 2012 and 2013, was $3.3 million, $2.1 million and $0.7 million for the fiscal yearsended August 3, 2013, July 28, 2012 and July 30, 2011, respectively.As of August 3, 2013, there was $18.0 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements(including stock options, restricted stock, restricted stock units and performance-based restricted shares and units). This cost is expected to be recognizedover a weighted-average period of 2.5 years.For stock options, the fair value of each grant was estimated at the date of grant using the Black-Scholes option pricing model. Black-Scholes utilizesassumptions related to volatility, the risk-free interest rate, the dividend yield and expected life. Expected volatilities utilized in the model are based on thehistorical volatility of the Company's stock price. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. Themodel incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data. The expected term is derived from historicalinformation and other factors. The fair value of restricted stock awards, restricted stock units, and performance share units are determined based on thenumber of shares or units, as applicable, granted and the quoted price of the Company's common stock as of the grant date.The following summary presents the weighted average assumptions used for stock options granted in fiscal 2013, 2012 and 2011: Fiscal year ended August 3, 2013 July 28, 2012 July 30, 2011Expected volatility29.8% 39.3% 44.7%Dividend yield—% —% —%Risk free interest rate0.3% 0.4% 0.9%Expected term (in years)3.0 3.0 3.0The Company has four equity incentive plans that provide for the issuance of stock options: the 1996 Stock Option Plan (the "1996 Plan"), the 2002Stock Incentive Plan (the "2002 Plan"), the 2004 Equity Incentive Plan, as amended (the "2004 Plan"), and the 2012 Equity Incentive Plan (the "2012 Plan")(collectively, the "Plans"). The Plans provide for grants of stock options to employees, officers, directors and others. Since fiscal 2010, the Company has notgranted stock options intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Vesting requirements forawards under the Plans are at the discretion of the Company's Board of Directors, or Compensation Committee of the Board of Directors. Typically optionsgranted to employees vest ratably over 4 years, while options granted to non-employee directors vest one third immediately with the remainder vesting ratablyover 2 years. The maximum term of all incentive and non-statutory stock options granted under the Plans is 10 years. There were 9,050,000 shares authorizedfor grant under the 1996 Plan, 2002 Plan and 2012 Plan. There were 1,054,267 remaining shares authorized for grant under the 2004 Plan as ofDecember 16, 2010, the effective date when the 2004 Plan was amended to allow for the award of stock options. These shares may be used to issue stockoptions, restricted stock, restricted stock units or performance based awards. As of August 3, 2013, 302,006 and 1,250,000 shares were available for grantunder the 2004 Plan and 2012 Plan, respectively, and the authorization for new grants under the 1996 Plan and 2002 Plan has expired. No shares were issuedunder the 2012 Plan during fiscal 2013. During fiscal 2010 and fiscal 2012, the Company issued shares from treasury in addition to issuing new shares tosatisfy stock option exercises and restricted stock vestings.The following summary presents the weighted-average remaining contractual term of options outstanding at August 3, 2013 by range of exercise prices:Exercise Price Range Number ofOptionsOutstanding WeightedAverageExercisePrice WeightedAverageRemainingContractualTerm Number ofSharesExercisable WeightedAverageExercise Price$12.00 - $24.00 3,500 $15.37 3.3 3,500 $15.37$24.01 - $34.00 234,212 $28.04 5.2 178,739 $27.48$34.01 - $44.00 133,265 $37.44 6.4 69,243 $37.06$44.01 - $60.00 103,260 $58.62 9.1 1,773 $46.77 474,237 $37.25 6.4 253,255 $30.0752Table of ContentsThe following summary presents information regarding outstanding stock options as of August 3, 2013 and changes during the fiscal year then endedwith regard to options under the Plans: Numberof Options WeightedAverageExercisePrice WeightedAverageRemainingContractualTerm AggregateIntrinsicValueOutstanding at beginning of year440,832 $31.24 Granted101,600 $58.93 Exercised(62,683) $30.82 Forfeited(2,500) $17.71 Cancelled(3,012) $28.28 Outstanding at end of year474,237 $37.25 6.4 years $10,937,491Exercisable at end of year253,255 $30.07 4.8 years $7,659,585The weighted average grant-date fair value of options granted during the fiscal years ended August 3, 2013, July 28, 2012, and July 30, 2011 was$12.21, $10.27 and $10.64, respectively. The aggregate intrinsic value of options exercised during the fiscal years ended August 3, 2013, July 28, 2012, andJuly 30, 2011, was $1.6 million, $5.2 million and $3.9 million, respectively.The 2004 Plan was amended during fiscal 2009 to provide for the issuance of up to 2,500,000 equity-based compensation awards, and during fiscal2011 was further amended to provide for the issuance of stock options in addition to restricted shares and units, performance shares and units, bonus sharesand stock appreciation rights. Vesting requirements for the awards under the 2004 Plan are at the discretion of the Company's Board of Directors, or theCompensation Committee thereof, and are typically four equal annual installments for employees and three equal annual installments with one third vestingimmediately for non-employee directors. The performance units granted to the Company's President and Chief Executive Officer upon hire during fiscal 2009vested as of July 31, 2010, those granted during March 2011 vested as of July 30, 2011 and those granted during September 2011 vested as of July 28, 2012,each in accordance with the terms of the related Performance Unit and Performance Share agreements.The following summary presents information regarding restricted stock awards, restricted stock units, performance shares and performance unitsunder the 2004 Plan as of August 3, 2013 and changes during the fiscal year then ended: Numberof Shares Weighted AverageGrant-DateFair ValueOutstanding at July 28, 2012743,991 $34.59Granted340,333 $57.84Vested(331,576) $37.51Forfeited(87,478) $42.40Outstanding at August 3, 2013665,270 $44.00The total intrinsic value of restricted stock awards and restricted stock units vested was $16.7 million, $14.2 million and $9.1 million during thefiscal years ended August 3, 2013, July 28, 2012 and July 30, 2011, respectively. The total intrinsic value of performance share awards and performanceunits vested was $1.6 million, $1.7 million and $0.7 million during the fiscal years ended August 3, 2013, July 28, 2012 and July 30, 2011, respectively.During the year ended August 3, 2013, 25,000 performance shares and 5,123 performance units were granted (in each case subject to the issuance of anadditional 25,000 shares and 5,123 units if the Company's performance exceeded specified targeted levels) to the Company's President and CEO, the vestingof which was contingent on the attainment of specific levels of earnings before interest and taxes and return on invested capital. The per share grant-date fairvalue of these grants was $52.00. Effective August 3, 2013, an additional 695 units were granted and a total of 30,818 performance share and units vestedwith a corresponding intrinsic value and fair value of $1.6 million and $1.9 million, respectively.During the year ended July 28, 2012, 25,000 performance shares and 12,500 performance units were granted (in each case subject to the issuance of anadditional 25,000 shares and 12,500 units if the Company's performance exceeded specified targeted levels) to the Company's President and CEO, the vestingof which was contingent on the attainment of specific levels53Table of Contentsof earnings before interest and taxes and return on invested capital. The per share grant-date fair value of these grants was $37.82. Effective July 28, 2012, anadditional 6,610 units were granted and a total of 44,110 performance shares and units vested with a corresponding intrinsic value and fair value of $1.7million and $2.4 million, respectively.During the year ended July 28, 2012, the Company created a new performance-based equity compensation arrangement with a 2-year performance-basedvesting component that was established for members of the Company's executive leadership team. Under this arrangement, the executives are eligible forperformance-based stock units equal to a grant-date fair value of approximately 33% of the sum of 125% of their annual base salary and 50% of their cash-based performance award for fiscal 2012. Similar to the performance awards granted to the Company's President and CEO, if the Company's performanceexceeds specified targeted levels, the grants may be increased up to an additional 100%. Effective August 3, 2013, the Company issued an aggregate of 23,882shares to the executive leadership team upon the vesting of an equal number of performance share units based on the final results of the 2-year performanceperiod.During the year ended July 30, 2011, 25,000 performance shares and 12,500 performance units were granted (in each case subject to the issuance of anadditional 25,000 shares and 12,500 units if the Company's performance exceeded specified targeted levels) to the Company's President and CEO, the vestingof which was contingent on the attainment of specific levels of earnings before interest and taxes and return on invested capital. The per share grant-date fairvalue of these grants was $42.03. Effective July 30, 2011, 18,924 performance shares vested with a corresponding intrinsic value and fair value of $0.8million. The remainder of the performance shares were forfeited, and no shares were issued for the performance units.4.ALLOWANCE FOR DOUBTFUL ACCOUNTS AND NOTES RECEIVABLEThe allowance for doubtful accounts and notes receivable consists of the following: Fiscal year ended August 3, 2013 July 28, 2012 July 30, 2011 (In thousands)Balance at beginning of year$6,956 $5,854 $7,692Additions charged to costs and expenses4,227 3,532 635Deductions(1,157) (2,430) (2,473)Balance at end of year$10,026 $6,956 $5,8545.RESTRUCTURING ACTIVITIESDivestiture of conventional non-foods and general merchandise lines of businessIn June 2011, the Company entered into an asset purchase agreement with L&R Distributors, Inc. ("L&R Distributors"), a leading national distributorof non-food products and general merchandise, to divest the Company's conventional non-foods and general merchandise lines of business. The Companyentered the conventional non-foods and general merchandise businesses, which includes cosmetics, seasonal products, conventional health & beauty productsand hard goods, as part of its acquisition of Distribution Holdings, Inc. in November 2007. This strategic transaction will allow the Company to concentrateon its core business of the distribution of natural, organic, and specialty foods and products.In connection with this divestiture, the Company planned to cease operations at its Harrison, Arkansas distribution center and during the fourth quarterof fiscal 2011, the Company recognized a non-cash impairment charge on long-lived assets including land, building and equipment of $5.8 million. Inaddition, the Company incurred $0.5 million during the fourth quarter of fiscal 2011 to transition the specialty food line of business into the Company's otherdistribution centers. Upon the closure of the Harrison, Arkansas distribution center during the first quarter of fiscal 2012, the carrying value of $2.6 millionin long-term property and equipment was reclassified to assets held for sale. During the first quarter of fiscal 2012, the Company recognized $5.1 million inseverance and other expenses related to the completion of the divestiture. During the fourth quarter of fiscal 2012, the land, buildings and equipment was soldto a third party, resulting in a nominal gain.54Table of ContentsImpairment of an intangible assetDuring fiscal 2007, the Company made several asset acquisitions under its Blue Marble Brands division, one of which included a licensing agreementunder which the Company was permitted to sell products under the seller’s existing trademark in exchange for royalty payments. The fair value of theintangible asset at the time of acquisition was $2.1 million, and was being amortized over a life of 27 years, the maximum life of the licensing agreementincluding renewal periods. In October 2012, the Company entered into an agreement to terminate its licensing agreement with the former owners. In connectionwith this termination agreement, during the first quarter of 2013 the Company recognized an impairment of $1.6 million representing the remainingunamortized balance of the intangible asset.6.NOTES PAYABLEIn May 2012, the Company amended and restated its revolving credit facility, pursuant to which the Company has a $500 million secured revolvingcredit facility which now matures on May 24, 2017, of which up to $450.0 million is available to the Company's U.S. subsidiaries and up to $50.0 millionis available to UNFI Canada. This credit facility also provides a one-time option, subject to approval by the lenders under the revolving credit facility, toincrease the borrowing base by up to an additional $100 million. The borrowings of the US portion of the credit facility accrue interest, at the Company'soption, at either (i) a base rate (generally defined as the highest of (x) the Bank of America Business Capital prime rate, (y) the average overnight federal fundseffective rate plus one-half percent (0.50%) per annum and (z) one-month LIBOR plus one percent (1%) per annum) plus an initial margin of 0.50%, or (ii) theLondon Interbank Offered Rate ("LIBOR") for one, two, three or six months or, if approved by all affected lenders, nine months plus an initial margin of1.50%. The borrowings on the Canadian portion of the credit facility for Canadian swing-line loans, Canadian overadvance loans or Canadian protectiveadvances accrue interest, at the Company's option, at either (i) a prime rate (generally defined as the highest of (x) 0.50% over 30-day Reuters Canadian DepositOffering Rate for bankers' acceptances, (y) the prime rate of Bank of America, N.A.'s Canada branch, and (z) a bankers' acceptance equivalent rate for a onemonth interest period plus 1.00%) plus an initial margin of 0.50%, or (ii) a bankers' acceptance equivalent rate of the rate of interest per annum equal to theannual rates applicable to Canadian Dollar bankers' acceptances on the "CDOR Page" of Reuter Monitor Money Rates Service, plus five basis points (the"CDOR rate"), and an initial margin of 1.50%. All other borrowings on the Canadian portion of the credit facility must exclusively accrue interest under theCDOR rate plus the applicable margin. An annual commitment fee in the amount of 0.30% if the average daily balance of amounts actually used (other thanswing-line loans) is less than 40% of the aggregate commitments, or 0.25% if such average daily balance is 40% or more of the aggregate commitments.As of August 3, 2013, the Company's borrowing base, based on eligible accounts receivable and inventory levels, was $484.5 million. As of August 3,2013, the Company had $130.6 million outstanding under the Company's credit facility, $31.8 million in letter of credit commitments and $2.9 million inreserves which generally reduces the Company's available borrowing capacity under its revolving credit facility on a dollar for dollar basis. The Company'sresulting remaining availability was $319.3 million as of August 3, 2013. During fiscal 2012, the Company used borrowings under the revolving creditfacility to pay off its term loan.The revolving credit facility, as amended and restated, subjects the Company to a springing minimum fixed charge coverage ratio (as defined in theunderlying credit agreement) of 1.0 to 1.0 calculated at the end of each of its fiscal quarters on a rolling four quarter basis when aggregate availability (asdefined in the underlying credit agreement) is less than the greater of (i) $35.0 million and (ii) 10% of the aggregate borrowing base. The Company was notsubject to the fixed charge coverage ratio covenants as of the fiscal year ended August 3, 2013.The credit facility also allows for the lenders thereunder to syndicate the credit facility to other banks and lending institutions. The Company haspledged the majority of its accounts receivable and inventory for its obligations under the amended and restated credit facility.7.LONG-TERM DEBTDuring the fiscal year ended July 28, 2012, the Company entered into a lease agreement for a new distribution facility in Aurora, Colorado. As ofAugust 3, 2013, actual construction costs exceeded the construction allowance as defined by the lease agreement, and therefore, the Company has determined ithas met the criteria for continuing involvement pursuant to ASC 840, Leases, and has applied the financing method to account for this transaction. Under thefinancing method, the book value of the distribution facility and related accumulated depreciation remains on the balance sheet. The construction allowance isrecorded as a financing obligation in long-term debt. A portion of each lease payment will reduce the amount of the financing obligation, and a portion will berecorded as interest expense at an effective rate of approximately 7.32%.55Table of ContentsDuring the year ended July 28, 2012, the Company used the availability under its amended and restated revolving credit facility to pay off its term loanagreement which accrued interest at 30 day LIBOR plus 1.0% and was to mature in July 2012.As of August 3, 2013 and July 28, 2012, the Company's long-term debt consisted of the following: August 3, 2013 July 28, 2012 (In thousands)Financing obligation, due monthly, and maturing in October 2028 at an effective interest rate of 7.32%$33,477 $—Real estate and equipment term loans payable to bank, secured by building and other assets, due monthly andmaturing in June 2015, at an interest rate of 8.60%409 598Term loan for employee stock ownership plan, secured by common stock of the Company, due monthly andmaturing in May 2015, at an interest rate of 1.33%224 387 $34,110 $985Less: current installments1,019 350Long-term debt, excluding current installments$33,091 $635Aggregate maturities of long-term debt for the next five years and thereafter are as follows at August 3, 2013:Year (In thousands)2014 $1,0192015 1,1942016 1,0002017 1,1412018 1,2502019 and thereafter 28,506 $34,1108.FAIR VALUE MEASUREMENTSAs of August 2, 2009, the Company had fully adopted ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), for financial assets andliabilities and for non-financial assets and liabilities that are recognized or disclosed at fair value on at least an annual basis. ASC 820 defines fair value as theprice that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principalor most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability,such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the useof observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used tomeasure fair value:•Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities.•Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with marketdata. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities inmarkets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputsused in the model, such as interest rates and volatility, can be corroborated by readily observable market data.•Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use ofsignificant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models,discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation.Interest Rate Swap AgreementOn August 1, 2005, the Company entered into an interest rate swap agreement effective July 29, 2005. The agreement provided for the Company to payinterest for a seven-year period at a fixed rate of 4.70% on an initial amortizing notional principal amount of $50.0 million while receiving interest for the sameperiod at the one-month London Interbank Offered Rate56Table of Contents(LIBOR) on the same notional principal amount. The swap was entered into as a hedge against LIBOR movements on current variable rate indebtedness at one-month LIBOR plus 1.00%, thereby fixing its effective rate on the notional amount at 5.70%. The swap agreement qualified as an "effective" hedge under FASBASC 815, Derivatives and Hedging ("ASC 815"). Concurrent with the payoff of the underlying term loan, this swap was settled during the fourth quarterof fiscal 2012, with a payment of $0.3 million included within interest expense.Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent ofthose exposures. The Company's interest rate swap agreement was designated as a cash flow hedge at July 30, 2011 and at that date was reflected at fair valuein the Company's consolidated balance sheet as a component of other long-term liabilities. The related gains or losses on this contract were generally deferred instockholders' equity as a component of other comprehensive income. However, to the extent that the swap agreement was not considered to be effective inoffsetting the change in the value of the item being hedged, any change in fair value relating to the ineffective portion of the swap agreement is immediatelyrecognized in income. For the periods presented, the Company did not have any ineffectiveness requiring current income recognition.Fuel Supply AgreementsFrom time to time the Company is a party to fixed price fuel supply agreements. During the years ended August 3, 2013 and July 28, 2012, theCompany entered into several agreements which required it to purchase a portion of its diesel fuel each month at fixed prices through July 2013 and 2012,respectively. These fixed price fuel agreements qualify for the "normal purchase" exception under ASC 815; therefore, the fuel purchases under these contractsare expensed as incurred and included within operating expenses.Exchange Rate Forward ContractWith the settlement of the interest rate swap during fiscal 2012, there were no financial assets and liabilities measured on a recurring basis as of thefiscal year ended August 3, 2013 and July 28, 2012.The Company's determination of the fair value of its interest rate swap was calculated using a discounted cash flow analysis based on the terms of theswap contract and the observable interest rate curve. The Company does not enter into derivative agreements for trading purposes.The fair value of the Company's other financial instruments including cash, cash equivalents, accounts receivable, notes receivable, accounts payableand certain accrued expenses are derived using Level 2 inputs and approximate carrying amounts due to the short-term nature of these instruments. The fairvalue of notes payable approximate carrying amounts as they are variable rate instruments.The following estimated fair value amounts have been determined by the Company using available market information and appropriate valuationmethodologies taking into account the instruments' interest rate, terms, maturity date and collateral, if any, in comparison to the Company's incrementalborrowing rate for similar financial instruments and are therefore deemed Level 2 inputs. However, considerable judgment is required in interpreting marketdata to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company couldrealize in a current market exchange. August 3, 2013 July 28, 2012 Carrying Value Fair Value Carrying Value Fair Value (In thousands)Liabilities Long term debt, including current portion$34,110 $36,230 $985 $988The following table provides the fair value hierarchy for non-financial assets and liabilities measured on a nonrecurring basis for fiscal 2013. Therewere no non-financial assets and liabilities measured on a non-recurring basis as of the end of fiscal 2012.57Table of Contents Fair Value at August 3, 2013 Level 1 Level 2 Level 3 TotalLosses (In thousands)Description Fair value of intangible assets subject to write-down$— $— $— $1,629In accordance with the provisions of ASC 360-10, Impairment and Disposal of Long-Lived Assets, an impairment charge of $1.6 million wasrecognized in connection with the termination of a long-term licensing agreement and the write-off of the associated intangible asset during the fiscal year endedAugust 3, 2013. Long-lived assets held and used with a carrying amount of $290.9 million were written down to their fair value of $285.2 million, resultingin an impairment charge of $5.8 million included in earnings for the fiscal year ended July 30, 2011. The assets which corresponded to the impairment duringfiscal 2011 were sold during fiscal 2012.In accordance with the provisions ASC 350-30, Intangibles- Goodwill and Other, indefinite lived intangible assets with a carrying amount of $58.5million were written down to their fair value of $58.3 million, resulting in an impairment charge of $0.2 million included in earnings for the fiscal year endedJuly 30, 2011. There were no impairments recognized on indefinite lived intangible assets during fiscal 2013 or fiscal 2012.9.TREASURY STOCKOn December 1, 2004, the Company's Board of Directors authorized the repurchase of up to $50 million of common stock through February 2008 inthe open market or in privately negotiated transactions. As part of the stock repurchase program, the Company purchased 228,800 shares of its commonstock for its treasury during the year ended July 29, 2006 at an aggregate cost of approximately $6.1 million. All shares were purchased at prevailing marketprices. There were no other purchases made during the authorization period.The Company, in an effort to reduce the treasury share balance, decided in the fourth quarter of fiscal 2010 to issue treasury shares to satisfy certainshare requirements related to exercises of stock options and vesting of restricted stock units and awards under its equity incentive plans. The Company issued201,814 and 26,986 treasury shares during fiscal 2010 and 2012, respectively, related to stock option exercises and the vesting of restricted stock units andawards.10.SECONDARY COMMON STOCK OFFERINGDuring the first quarter of fiscal 2011, the Company completed a secondary common stock offering. This offering resulted in an issuance of 4,427,500shares of common stock, including shares issued to cover the underwriters' overallotment option, at a price of $33.00 per share. The net proceeds ofapproximately $138.3 million were used to repay a portion of the Company's outstanding borrowings under its revolving credit facility. The Company alsoutilized a portion of the additional borrowing capacity under its revolving credit facility resulting from the common stock offering to fund its acquisition of theRocky Mountain and Southwest distribution businesses of Whole Foods Distribution.11.COMMITMENTS AND CONTINGENCIESThe Company leases various facilities and equipment under operating lease agreements with varying terms. Most of the leases contain renewal optionsand purchase options at several specific dates throughout the terms of the leases.Rent and other lease expense for the fiscal years ended August 3, 2013, July 28, 2012 and July 30, 2011 totaled approximately $59.5 million, $56.4million and $48.4 million, respectively.Future minimum annual fixed payments required under non-cancelable operating leases having an original term of more than one year as of August 3,2013 are as follows:58Table of ContentsFiscal Year (In thousands)2014 $44,1402015 42,6532016 39,7792017 35,4612018 28,9352019 and thereafter 136,671 $327,639As of August 3, 2013, outstanding commitments for the purchase of inventory were approximately $26.5 million. The Company had outstandingletters of credit of approximately $31.8 million at August 3, 2013.As of August 3, 2013, there were no outstanding commitments for the purchase of diesel fuel.Assets mortgaged at August 3, 2013 and July 28, 2012 were not material.The Company may from time to time be involved in various claims and legal actions arising in the ordinary course of business. In the opinion ofmanagement, amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, arenot deemed to be material to the Company's consolidated financial position or results of operations. Legal expenses incurred in connection with claims and legalactions are expensed as incurred.12.RETIREMENT PLANSRetirement PlanThe Company has a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code, the United Natural Foods, Inc. RetirementPlan (the "Retirement Plan"). In order to become a participant in the Retirement Plan, employees must meet certain eligibility requirements as described in theRetirement Plan document. In addition to amounts contributed to the Retirement Plan by employees, the Company makes contributions to the Retirement Planon behalf of the employees. The Company also has the Millbrook Distribution Services Union Retirement Plan, which was assumed as part of an acquisitionduring fiscal 2008. The Company's contributions to these plans were approximately $5.2 million, $4.4 million, and $3.9 million for the fiscal years endedAugust 3, 2013, July 28, 2012 and July 30, 2011, respectively.Deferred Compensation and Supplemental Retirement PlansThe Company's non-employee directors and certain of its employees are eligible to participate in the United Natural Foods Deferred Compensation Planand the United Natural Foods Deferred Stock Plan (collectively the "Deferral Plans"). The Deferral Plans are nonqualified deferred compensation planswhich are administered by the Company's Compensation Committee of the Board of Directors. The Deferral Plans were established to provide participantswith the opportunity to defer the receipt of all or a portion of their compensation to a non-qualified retirement plan in amounts greater than the amount permittedto be deferred under the Company's 401(k) Plan. The Company believes that this is an appropriate benefit because (i) it operates to place employees and non-employee directors in the same position as other employees who are not affected by Internal Revenue Code limits placed on plans such as the Company's401(k) Plan; (ii) does not substantially increase the Company's financial obligations to its employees and directors (there are no employer matchingcontributions, only a crediting of deemed earnings); and (iii) provides additional incentives to the Company's employees and directors, since amounts set asideby the employees and directors are subject to the claims of the Company's creditors until paid. Under the Deferral Plans, only the payment of thecompensation earned by the participant is deferred and there is no deferral of the expense in the Company's financial statements related to the participants'earnings; the Company records the related compensation expense in the year in which the compensation is earned by the participants.Under the Deferred Stock Plan, which was frozen to new deferrals effective January 1, 2007, each eligible participant could elect to defer between 0%and 100% of restricted stock awards granted during the election calendar year. Effective January 1, 2007, each participant may elect to defer up to 100% oftheir restricted share unit awards, performance shares and performance units under the Deferred Compensation Plan. Under the Deferred Compensation Plan,each participant may also elect to defer a minimum of $1,000 and a maximum of 90% of base salary and 100% of director fees, employee bonuses andcommissions, as applicable, earned by the participants for the calendar year. From January 1, 2009 to July 31, 2010, participants' cash-derived deferralsunder the Deferred Compensation Plan earned interest at the 5-year certificate of deposit annual yield taken from the Wall Street Journal Market Data Center (ascaptured on the first and last business date of each calendar quarter and averaged) plus 3% credited and compounded quarterly. Beginning August 1, 2010,participants' cash-59Table of Contentsderived deferrals accrue earnings and appreciation based on the performance of mutual funds selected by the participant. The value of equity-based awardsdeferred under the Deferred Compensation and Deferred Stock Plans are based upon the performance of the Company's common stock.The Millbrook Deferred Compensation Plan and the Millbrook Supplemental Retirement Plan were assumed by the Company as part of an acquisitionduring fiscal 2008. Deferred compensation relates to a compensation arrangement implemented in 1984 by a predecessor of the acquired company in the formof a non-qualified defined benefit plan and a supplemental retirement plan which permitted former officers and certain management employees, at the time, todefer portions of their compensation to earn specified maximum benefits upon retirement. The future obligations, which are fixed in accordance with the plans,have been recorded at a discount rate of 5.7%. These plans do not allow new participants, and there are no active employees subject to these plans.In an effort to provide for the benefits associated with these plans, the acquired company's predecessor purchased whole-life insurance contracts on theplan participants. The cash surrender value of these policies included in Other Assets in the Consolidated Balance Sheet was $10.7 million and $10.1 millionat August 3, 2013 and July 28, 2012, respectively. At August 3, 2013, total future obligations including interest, assuming commencement of payments at anindividual's retirement age, as defined under the deferred compensation arrangement, were as follows:Fiscal Year (In thousands)2014 $1,1632015 1,3242016 1,3162017 1,2042018 1,0232019 and thereafter 6,257 $12,28713.EMPLOYEE STOCK OWNERSHIP PLANThe Company adopted the UNFI Employee Stock Ownership Plan (the "ESOP") for the purpose of acquiring outstanding shares of the Company forthe benefit of eligible employees. The ESOP was effective as of November 1, 1988 and has received notice of qualification by the Internal Revenue Service.In connection with the adoption of the ESOP, a Trust was established to hold the shares acquired. On November 1, 1988, the Trust purchased 40% ofthe then outstanding common stock of the Company at a price of $4.1 million. The trustees funded this purchase by issuing promissory notes to the initialstockholders, with the Trust shares pledged as collateral. These notes bear interest at 1.33% as of August 3, 2013 and July 28, 2012, and are payable throughMay 2015. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of principal and interest paid inthe year.All shares held by the ESOP were purchased prior to December 31, 1992. As a result, the Company considers unreleased shares of the ESOP to beoutstanding for purposes of calculating both basic and diluted earnings per share, whether or not the shares have been committed to be released. The debt ofthe ESOP is recorded as debt and the shares pledged as collateral are reported as unearned ESOP shares in the consolidated balance sheets. During the fiscalyears ended August 3, 2013, July 28, 2012, and July 30, 2011, contributions totaling approximately $0.2 million each fiscal year were made to the Trust. Ofthese contributions, less than $0.1 million in each fiscal year represented interest.The ESOP shares were classified as follows: August 3, 2013 July 28, 2012 (In thousands)Total ESOP shares—beginning of year2,053 2,199Shares distributed to employees(220) (146)Total ESOP shares—end of year1,833 2,053Allocated shares1,777 1,955Unreleased shares56 98Total ESOP shares1,833 2,05360Table of ContentsDuring the fiscal years ended August 3, 2013 and July 28, 2012, 41,630 and 42,171 shares were released for allocation based on note payments,respectively. During fiscal 2012, the Company also allocated 402,285 shares to correct an operational error in prior years as elected in a Voluntary CorrectionProgram filed with the IRS. In connection with this allocation, the Company recorded compensation expense of approximately $0.3 million during the fourthquarter of fiscal 2012. The fair value of unreleased shares was approximately $3.4 million and $5.3 million at August 3, 2013 and July 28, 2012,respectively.14.INCOME TAXESFor the fiscal year ended August 3, 2013, income before income taxes consists of $166.7 million from U.S. operations and $7.4 million from foreignoperations. For the fiscal year ended July 28, 2012, income before income taxes consists of $142.2 million from U.S. operations and $8.6 million fromforeign operations. For the fiscal year ended July 30, 2011, income before income taxes consists of $118.5 million from U.S. operations and $7.9 millionfrom foreign operations.Total federal and state income tax (benefit) expense consists of the following: Current Deferred Total (In thousands)Fiscal year ended August 3, 2013 U.S. Federal$44,095 $7,029 $51,124State & Local13,366 (364) $13,002Foreign2,021 115 $2,136 $59,482 $6,780 $66,262Fiscal year ended July 28, 2012 U.S. Federal$55,083 $(7,506) $47,577State & Local9,002 462 9,464Foreign1,471 929 2,400 $65,556 $(6,115) $59,441Fiscal year ended July 30, 2011 U.S. Federal$24,971 $14,273 $39,244State & Local7,091 1,207 8,298Foreign2,180 40 2,220 $34,242 $15,520 $49,762Total income tax expense (benefit) was different than the amounts computed using the United States statutory income tax rate (35)% applied to incomebefore income taxes as a result of the following: Fiscal year ended August 3, 2013July 28, 2012July 30, 2011 (In thousands)Computed "expected" tax expense$60,940 $52,774 $44,252State and local income tax, net of Federal income tax benefit7,501 6,152 5,394Non-deductible expenses1,516 1,260 1,111Tax effect of share-based compensation134 (140) (440)General business credits(1,374) (231) (1,021)Other, net(2,455) (374) 466Total income tax expense$66,262 $59,441 $49,762Total income tax expense (benefit) for the years ended August 3, 2013, July 28, 2012 and July 30, 2011 was allocated as follows:61Table of Contents August 3, 2013 July 28, 2012 July 30, 2011 (In thousands)Income tax expense$66,262 $59,441 $49,762Stockholders' equity, difference between compensation expense for tax purposes and amountsrecognized for financial statement purposes(1,952) (2,804) (1,545)Other comprehensive income— 495 502 $64,310 $57,132 $48,719The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and deferred tax liabilities at August 3, 2013and July 28, 2012 are presented below: 2013 2012 (In thousands)Deferred tax assets: Inventories, principally due to additional costs inventoried for tax purposes$6,906 $6,431Compensation and benefits related21,224 18,471Accounts receivable, principally due to allowances for uncollectible accounts3,861 2,817Accrued expenses8,914 8,294Net operating loss carryforwards2,374 2,778Other deferred tax assets179 221Total gross deferred tax assets43,458 39,012Less valuation allowance819 990Net deferred tax assets$42,639 $38,022Deferred tax liabilities: Plant and equipment, principally due to differences in depreciation$34,222 $23,828Intangible assets25,766 24,825Other303 276Total deferred tax liabilities60,291 48,929Net deferred tax liabilities$(17,652) $(10,907)Current deferred income tax assets$23,822 $25,353Non-current deferred income tax liabilities(41,474) (36,260) $(17,652) $(10,907)The net increase (decrease) in total valuation allowance in fiscal year 2013, 2012, and 2011 was $(171), $(4,081) and $19, respectively. The netdecrease in fiscal 2013 did not have an impact on net income as it relates to expired unutilized tax attributes for which a valuation allowance was previouslyrecorded in prior fiscal years.At August 3, 2013, the Company had net operating loss carryforwards of approximately $4.0 million for federal income tax purposes. The federalcarryforwards are subject to an annual limitation of approximately $0.3 million under Internal Revenue Code Section 382. The carryforwards expire at varioustimes between fiscal years 2017 and 2027. In addition, the Company had net operating loss carryforwards of approximately $21.8 million for state income taxpurposes that expire in fiscal years 2014 through 2031.In assessing the recoverability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred taxassets will not be realized. Due to the fact that the Company has sufficient taxable income in the federal carryback period and anticipates sufficient futuretaxable income over the periods in which the deferred tax assets are deductible, the ultimate realization of deferred tax assets for federal and state tax purposesappears more likely than not at August 3, 2013, with the exception of certain state deferred tax assets. Valuation allowances were established againstapproximately $0.8 million of state deferred tax assets. The subsequent release of this valuation allowance, if such release occurs, will reduce income taxexpense.62Table of ContentsThe Company and its subsidiaries file income tax returns in the United States federal jurisdiction and in various state jurisdictions. UNFI Canada filesincome tax returns in Canada and certain of its provinces. U.S. federal income tax examination years prior to 2012 have either statutorily or administrativelybeen closed with the Internal Revenue Service, and with limited exception, the fiscal tax years that remain subject to examination by state jurisdictions rangefrom the Company's fiscal 2009 to fiscal 2012.The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. For the fiscal year endedAugust 3, 2013, the Company recognized net tax benefits of approximately $4.4 million in its consolidated statement of income related to tax examinationsclosed during the fiscal year. For the fiscal years ended August 3, 2013, July 28, 2012 and July 30, 2011, the Company did not have any significantunrecognized tax benefits and thus, no significant interest and penalties related to unrecognized tax benefits were recognized.The undistributed earnings of the Company's non-U.S. subsidiaries approximated $7.4 million at August 3, 2013. We consider the undistributedearnings to be indefinitely reinvested; therefore, we have not provided a deferred tax liability for any residual U.S. tax that may be due upon repatriation ofthese earnings. Because of the effect of U.S. foreign tax credits, it is not practicable to estimate the amount of tax that might be payable on these earnings in theevent they no longer are indefinitely reinvested.15.BUSINESS SEGMENTSThe Company has several operating divisions aggregated under the wholesale segment, which is the Company's only reportable segment. Theseoperating divisions have similar products and services, customer channels, distribution methods and historical margins. The wholesale segment is engaged innational distribution of natural, organic and specialty foods, produce and related products in the United States and Canada. The Company has additionaloperating divisions that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of "Other". "Other"includes a retail division, which engages in the sale of natural foods and related products to the general public through retail storefronts on the east coast of theUnited States, a manufacturing division, which engages in importing, roasting and packaging of nuts, seeds, dried fruit and snack items, and theCompany's branded product lines. "Other" also includes certain corporate operating expenses that are not allocated to operating divisions, which consist ofdepreciation, salaries, retainers, and other related expenses of officers, directors, corporate finance (including professional services), information technology,governance, legal, human resources and internal audit that are necessary to operate the Company's headquarters located in Providence, Rhode Island. As theCompany continues to expand its business and serve its customers through a new national platform, these corporate expense amounts have increased, whichis the primary driver behind the increasing operating losses within the "Other" category below. Non-operating expenses that are not allocated to the operatingdivisions are under the caption of "Unallocated Expenses". The Company does not record its revenues for financial reporting purposes by product group, andit is therefore impracticable for the Company to report them accordingly.Following is business segment information for the periods indicated:63Table of Contents Wholesale Other Eliminations UnallocatedExpenses Consolidated (In thousands)Fiscal year ended August 3, 2013 Net sales$5,997,235 $186,505 $(119,385) $6,064,355Operating income (loss)225,895 (38,836) (1,565) 185,494Interest expense $5,897 5,897Interest income (632) (632)Other, net 6,113 6,113Income before income taxes 174,116Depreciation and amortization40,148 2,250 42,398Capital expenditures64,969 1,585 66,554Goodwill184,143 17,731 201,874Total assets1,596,131 145,770 (11,993) 1,729,908Fiscal year ended July 28, 2012 Net sales$5,175,445 $163,278 $(102,702) $5,236,021Operating income (loss)190,787 (34,461) (1,168) 155,158Interest expense $4,734 4,734Interest income (715) (715)Other, net 356 356Income before income taxes 150,783Depreciation and amortization36,333 3,227 39,560Capital expenditures29,824 1,668 31,492Goodwill176,210 17,531 193,741Total assets1,357,988 144,637 (8,679) 1,493,946Fiscal year ended July 30, 2011 Net sales$4,472,694 $162,731 $(105,410) $4,530,015Operating income (loss)161,952 (31,305) (966) 129,681Interest expense $5,000 5,000Interest income (1,226) (1,226)Other, net (528) (528)Income before income taxes 126,435Depreciation and amortization33,520 1,776 35,296Capital expenditures38,035 2,743 40,778Goodwill174,612 17,331 191,943Total assets1,258,783 150,151 (7,946) 1,400,98816.QUARTERLY FINANCIAL DATA (UNAUDITED)The following table sets forth certain key interim financial information for the years ended August 3, 2013 and July 28, 2012:64Table of Contents FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Full Year (In thousands except per share data) 2013 Net sales$1,410,037 $1,445,703 $1,566,217 $1,642,398 $6,064,355 Gross profit235,953 241,673 262,997 284,453 1,025,076 Income before income taxes30,980 37,574 52,278 53,284 174,116 Net income21,536 22,620 31,621 32,077 107,854 Per common share income Basic:$0.44 $0.46 $0.64 $0.65 $2.19Diluted:$0.43 $0.46 $0.64 $0.65 $2.18Weighted average basic Shares outstanding49,142 49,289 49,303 49,320 49,217 Weighted average diluted Shares outstanding49,585 49,582 49,567 49,646 49,509 Market Price High$61.26 $56.01 $56.45 $60.42 $61.26 Low$52.72 $50.25 $47.20 $47.67 $47.20 FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Full Year (In thousands except per share data) 2012 Net sales$1,217,428 $1,286,910 $1,388,023 $1,343,660 $5,236,021 Gross profit217,113 223,147 244,531 231,212 916,003 Income before income taxes25,011 36,323 47,908 41,541 150,783 Net income15,157 22,011 29,032 25,142 91,342 Per common share income Basic:$0.31 $0.45 $0.59 $0.51 $1.87*Diluted:$0.31 $0.45 $0.59 $0.51 $1.86Weighted average basic Shares outstanding48,594 48,774 48,848 48,951 48,766 Weighted average diluted Shares outstanding48,889 49,019 49,207 49,368 49,100 Market Price High$42.53 $44.68 $50.37 $55.86 $55.86 Low$35.07 $32.83 $43.81 $47.98 $32.83 * Total reflects rounding17. SUBSEQUENT EVENTSSubsequent to the fiscal year ended August 3, 2013, the Company entered into a definitive agreement to acquire all of the equity interests of TrudeauFoods, LLC (“Trudeau Foods”) from Trudeau Holdings, LLC, a portfolio company of Arbor Investments II, LP. Trudeau Foods is the largest Minnesota-based distributor of natural, organic and specialty food products and serves over 600 customer locations, including chain and independent grocers,wholesalers and meat markets in Minnesota, North Dakota, Wisconsin and Michigan’s Upper Peninsula. Trudeau Foods carries a full range of fine-qualityand specialty gourmet meats, frozen foods, dairy, bakery, deli, seafood and dry grocery items under a wide breadth of national, regional and private labelbrands. 65Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENot applicable.ITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and Procedures.We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of theeffectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of theend of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"). Based on this evaluation, our Chief Executive Officer and ChiefFinancial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective.Management's Annual Report on Internal Control Over Financial Reporting.Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principalexecutive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples and includes those policies and procedures that:•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management anddirectors; and•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have amaterial effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting as of August 3, 2013. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of theTreadway Commission (COSO) in the Internal Control-Integrated Framework (1992 framework). Based on its assessment, our management concluded that,as of August 3, 2013, our internal control over financial reporting was effective based on those criteria at the reasonable assurance level.Report of the Independent Registered Public Accounting Firm.The effectiveness of our internal control over financial reporting as of August 3, 2013 has been audited by KPMG LLP, an independent registered publicaccounting firm, as stated in its attestation report which is included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report onForm 10-K.Changes in Internal Controls Over Financial ReportingNo change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)or 15d-15(f)) occurred during thefiscal quarter ended August 3, 2013 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.ITEM 9B. OTHER INFORMATIONNone.66Table of ContentsPART III.ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item will be contained, in part, in our Definitive Proxy Statement on Schedule 14A for our Annual Meeting ofStockholders to be held on December 18, 2013 (the "2013 Proxy Statement") under the captions "Directors and Nominees for Director," "Section 16(a)Beneficial Ownership Reporting Compliance," and "Committees of the Board of Directors—Audit Committee" and is incorporated herein by this reference.Pursuant to Item 401(b) of Regulation S-K, our executive officers are reported under the caption "Executive Officers of the Registrant" in Part I, Item I of thisAnnual Report on Form 10-K.We have adopted a code of conduct and ethics that applies to our Chief Executive Officer, Chief Financial Officer, and employees within our finance,operations, and sales departments. Our code of conduct and ethics is publicly available on our website at www.unfi.com and is available free of charge bywriting to United Natural Foods, Inc., 313 Iron Horse Way, Providence, Rhode Island 02908, Attn: Investor Relations. We intend to make any legally requireddisclosures regarding amendments to, or waivers of, the provisions of the code of conduct and ethics on our website at www.unfi.com. Please note that ourwebsite address is provided as an inactive textual reference only.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this item will be contained in the 2013 Proxy Statement under the captions "Non-employee Director Compensation,""Executive Compensation", "Compensation Discussion and Analysis", "Compensation Committee Interlocks and Insider Participation" and "Report of theCompensation Committee" and is incorporated herein by this reference.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERSThe information required by this item will be contained, in part, in the 2013 Proxy Statement under the caption "Stock Ownership of Certain BeneficialOwners and Management", and is incorporated herein by this reference.The following table provides certain information with respect to equity awards under our equity compensation plans as of August 3, 2013.Plan Category Number of securities tobe issued upon exerciseof outstanding options,warrants and rights Weighted-averageexercise price ofoutstanding options,warrants and rights Number of securities remainingavailable for future issuanceunder equity compensationplans (excluding securitiesreflected in the second column) Plans approved by stockholders 1,156,806(1)$37.25(1)1,552,006(2)Plans not approved by stockholders 129,627(3)—(3)— Total 1,286,433 $37.25 1,552,006 (1)Includes 620,816 restricted stock units under the 2004 Equity Incentive Plan (the "2004 Plan"), 61,753 performance-based restricted stock unitsoutstanding under the 2004 Plan, 116,794 stock options under the 2004 Plan, 338,143 stock options under the 2002 Stock Incentive Plan (the "2002Plan") and 19,300 stock options under the 1996 Stock Option Plan (the "1996 Plan"). Restricted stock units and performance stock units do nothave an exercise price because their value is dependent upon continued employment over a period of time or the achievement of certain performancegoals, and are to be settled for shares of common stock. Accordingly, they have been disregarded for purposes of computing the weighted-averageexercise price.(2)Of these shares, 302,006 shares were available for issuance under the 2004 Plan and 1,250,000 shares were available for issuance under the 2012Plan. The 2004 Plan and 2012 Plan authorize grants in the form of stock options, stock appreciation rights, restricted stock, restricted stock units,performance shares, performance units or a combination thereof. The number of shares remaining available for future issuances assumes that, withrespect to outstanding performance-based restricted stock units, the vesting criteria will be achieved at the target level.(3)Consists of 129,627 phantom stock units outstanding under the United Natural Foods Inc. Deferred Compensation Plan. Phantom stock units donot have an exercise price because the units may be settled only for shares of common stock on a one-for-one basis at a future date as outlined in theplan.67Table of ContentsITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by this item will be contained in the 2013 Proxy Statement under the caption "Certain Relationships and Related Transactions"and "Director Independence" and is incorporated herein by this reference.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this item will be contained in the 2013 Proxy Statement under the caption "Fees Paid to KPMG LLP" and is incorporatedherein by this reference.68Table of ContentsPART IV.ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)Documents filed as a part of this Annual Report on Form 10-K.1.Financial Statements. The Financial Statements listed in the Index to Financial Statements in Item 8 hereof are filed as part of thisAnnual Report on Form 10-K.2.Financial Statement Schedules. All schedules have been omitted because they are either not required or the information required isincluded in our consolidated financial statements or the notes thereto included in Item 8 hereof.3.Exhibits. The Exhibits listed in the Exhibit Index immediately preceding such Exhibits are filed as part of this Annual Report on Form 10-K.69Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized. UNITED NATURAL FOODS, INC. /s/ MARK E. SHAMBER Mark E. Shamber Senior Vice President, Chief Financial Officer and Treasurer(Principal Financial and Accounting Officer) Dated: October 1, 2013________________________________________________________________________________________________________________________Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.NameTitleDate/s/ STEVEN L. SPINNERPresident, Chief Executive Officer and Director (PrincipalExecutive Officer)October 1, 2013Steven L. Spinner /s/ MICHAEL S. FUNKChair of the BoardOctober 1, 2013Michael S. Funk /s/ MARK E. SHAMBERSenior Vice President, Chief Financial Officer and Treasurer(Principal Financial and Accounting Officer)October 1, 2013Mark E. Shamber /s/ GORDON D. BARKER Director October 1, 2013Gordon D. Barker /s/ MARY ELIZABETH BURTONDirectorOctober 1, 2013Mary Elizabeth Burton /s/ DENISE M. CLARKDirectorOctober 1, 2013Denise M. Clark /s/ GAIL A. GRAHAMDirectorOctober 1, 2013Gail A. Graham /s/ JAMES P. HEFFERNANDirectorOctober 1, 2013James P. Heffernan /s/ PETER ROY Director October 1, 2013Peter Roy /s/ RICHARD J. SCHNIEDERSDirectorOctober 1, 2013Richard J. Schnieders 70Table of ContentsEXHIBIT INDEXExhibit No. Description2.1 Asset Purchase Agreement, dated May 10, 2010, by and among UNFI Canada, Inc., a subsidiary of the Registrant, with SunOpta Inc. andits wholly owned subsidiary, Drive Organics Corp. (incorporated by reference to the Registrant's Current Report on Form 8-K, filed onMay 11, 2010 (File No. 1-15723)). (Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits have been omitted from thisfiling.)2.2 Amendment No 1., dated June 4, 2010, to the Asset Purchase Agreement dated May 10, 2010, by and among UNFI Canada, Inc., asubsidiary of the Registrant, with SunOpta Inc. and its wholly owned subsidiary, Drive Organics Corp. (incorporated by reference to theRegistrant's Current Report on Form 8-K, filed on June 10, 2010 (File No. 1-15723)).3.1 Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to the Registrant's Quarterly Report onForm 10-Q for the quarter ended January 31, 2005 (File No. 1-15723)).3.2 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to theRegistrant's Quarterly Report on Form 10-Q for the quarter ended January 31, 2005 (File No. 1-15723)).3.3 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to theRegistrant's Quarterly Report on Form 10-Q for the quarter ended January 28, 2006 (File No. 1-15723)).3.4 Amended and Restated Bylaws of the Registrant, as amended on September 13, 2007 (incorporated by reference to the Registrant's CurrentReport on Form 8-K, filed on September 19, 2007 (File No. 1-15723)).4.1 Specimen Certificate for shares of Common Stock, $0.01 par value, of the Registrant (incorporated by reference to the Registrant's AnnualReport on Form 10-K for the year ended August 1, 2009 (File No. 1-15723)).10.1** Amended and Restated Employee Stock Ownership Plan, effective March 1, 2004 (incorporated by reference to the Registrant's AnnualReport on Form 10-K for the year ended July 31, 2004 (File No. 1-15723)).10.2* ** Amendments No. 1 through 8 to Amended and Restated Employee Stock Ownership Plan.10.3 Employee Stock Ownership Trust Loan Agreement among Norman Cloutier, Steven Townsend, Daniel Atwood, Theodore Cloutier and theEmployee Stock Ownership Plan and Trust, dated November 1, 1988 (incorporated by reference to the Registrant's Registration Statementon Form S-1 (File No. 333-11349)).10.4 Stock Pledge Agreement between the Employee Stock Ownership Trust and Steven Townsend, Trustee for Norman Cloutier, StevenTownsend, Daniel Atwood and Theodore Cloutier, dated November 1, 1988 (incorporated by reference to the Registrant's RegistrationStatement on Form S-1 (File No. 333-11349)).10.5 Trust Agreement among Norman Cloutier, Steven Townsend, Daniel Atwood, Theodore Cloutier and Steven Townsend as Trustee, datedNovember 1, 1988 (incorporated by reference to the Registrant's Registration Statement on Form S-1 (File No. 333-11349)).10.6 Guaranty Agreement between the Registrant and Steven Townsend as Trustee for Norman Cloutier, Steven Townsend, Daniel Atwood andTheodore Cloutier, dated November 1, 1988 (incorporated by reference to the Registrant's Registration Statement on Form S-1 (File No. 333-11349)).10.7** Amended and Restated 1996 Stock Option Plan (incorporated by reference to the Registrant's Definitive Proxy Statement for the year endedJuly 31, 2000 (File No. 1-15723)).10.8** Amendment No. 1 to Amended and Restated 1996 Stock Option Plan (incorporated by reference to the Registrant's Definitive ProxyStatement for the year ended July 31, 2000 (File No. 1-15723)).10.9** Amendment No. 2 to Amended and Restated 1996 Stock Option Plan (incorporated by reference to the Registrant's Definitive ProxyStatement for the year ended July 31, 2000 (File No. 1-15723)).10.10** 2002 Stock Incentive Plan (incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended July 31, 2003 (FileNo. 1-15723)).10.11** United Natural Foods, Inc. Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the Registrant's Current Reporton Form 8-K, filed on December 21, 2010 (File No. 1-15723)).10.12** Form of Restricted Stock Agreement, pursuant to the 2004 Equity Incentive Plan (incorporated by reference to the Registrant's RegistrationStatement on Form S-8 POS (File No. 333-123462)).71Table of ContentsExhibit No. Description10.13** Form of Restricted Unit Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference tothe Registrant's Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 1-15723)).10.14** Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated byreference to the Registrant's Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 1-15723)).10.15** Form of Performance Share Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to theRegistrant's Current Report on Form 8-K, filed on March 18, 2011 (File No. 1-15723)).10.16** Form of Performance Share Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by referenceto the Registrant's Annual Report on Form 10-K for the year ended July 30, 2011 (File No. 1-15723)).10.17** Form of Performance Unit Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference tothe Registrant's Annual Report on Form 10-K for the year ended July 30, 2011 (File No. 1-15723)).10.18** Form of Restricted Stock Unit Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Employee)(incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 1-15723)).10.19** Form of Restricted Stock Unit Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Director) (incorporatedby reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 1-15723)).10.20** Form of Non-Statutory Stock Option Award Agreement, pursuant to the 2002 Stock Incentive Plan (Employee) (incorporated by reference tothe Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 1-15723)).10.21** Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Director)(incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 1-15723)).10.22** Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Employee)(incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 1-15723)).10.23** United Natural Foods, Inc. 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form8-K filed on December 18, 2012 (File No. 1-15723)) (the “2012 Equity Plan”).10.24** Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Employee, pursuant to the 2012 Equity Plan (incorporated byreference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 1-15723)).10.25** Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Director, pursuant to the 2012 Equity Plan (incorporated byreference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 1-15723)).10.26** Form of Terms and Conditions of Grant of Restricted Share Units to Employee, pursuant to the 2012 Equity Plan (incorporated by referenceto the Registrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013) (File No. 1-15723)).10.27** Form of Terms and Conditions of Grant of Restricted Share Units to Director, pursuant to the 2012 Equity Plan (incorporated by referenceto the Registrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013) (File No. 1-15723)).10.28** Form of Performance-Based Vesting Restricted Share Unit Award Agreement, pursuant to the 2012 Equity Plan (incorporated by reference tothe Registrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013) (File No. 1-15723)).10.29** Form of Performance-Based Vesting Restricted Share Award Agreement, pursuant to the 2012 Equity Plan (incorporated by reference to theRegistrant's Quarterly Report on Form 10-Q for the quarter ended January 26, 2013) (File No. 1-15723)).10.30** Fiscal 2013 Senior Management Cash Incentive Plan (incorporated by reference to the Registrant's Annual Report on Form 10-K for the yearended July 28, 2012 (File No. 1-15723)).72Table of ContentsExhibit No.Description10.31* ** Fiscal 2014 Senior Management Cash Incentive Plan.10.32** United Natural Foods, Inc. Deferred Compensation Plan (incorporated by reference to the Registrant's Annual Report on Form 10-K for theyear ended July 30, 2011 (File No. 1-15723)).10.33** United Natural Foods, Inc. Deferred Stock Plan (incorporated by reference to the Registrant's Annual Report on Form 10-K for the year endedJuly 30, 2011(File No. 1-15723)).10.34** Offer Letter between Steven L. Spinner, President and CEO, and the Registrant, dated August 27, 2008 (incorporated by reference to theRegistrant's Quarterly Report on Form 10-Q for the quarter ended November 1, 2008(File No. 1-15723)).10.35** Amendment to Offer Letter between Steven L. Spinner, President and CEO, and the Registrant, dated August 27, 2008 to include applicationof Incentive Compensation Recoupment Policy of UNFI (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for thequarter ended October 31, 2009 (File No. 1-15723)).10.36** Severance Agreement between Steven L. Spinner, President and CEO, and the Registrant, effective as of September 16, 2008 (includedwithin Exhibit 10.26, which is incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarter endedNovember 1, 2008 (File No. 1-15723)).10.37** Form Indemnification Agreement for Directors and Officers (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q forthe quarter ended May 2, 2009 (File No. 1-15723)).10.38* Form of Modification of Indemnification Agreement.10.39* Revised Form Indemnification Agreement for Directors and Officers.10.40** Form of Change in Control Agreement between the Registrant and each of Mark Shamber and Joseph J. Traficanti (incorporated by referenceto the Registrant's Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 1-15723)).10.41** Form of Change in Control Agreement between the Registrant and each of Eric Dorne, Thomas Dziki, Sean Griffin, Thomas Grillea, DavidMatthews, Craig Smith, Christopher Testa and Donald McIntyre (incorporated by reference to the Registrant's Annual Report on Form 10-Kfor the year ended July 31, 2010 (File No. 1-15723)).10.42** Severance Agreement between the Registrant and each of Eric Dorne, Michael Funk, Thomas Dziki, Sean Griffin, Thomas Grillea, DavidMatthews, Craig Smith, Christopher Testa, Donald McIntyre, Mark Shamber and Joseph J. Traficanti (incorporated by reference to theRegistrant's Current Report on Form 8-K, filed on April 7, 2008 (File No. 1-15723)).10.43 Real Estate Term Notes between the Registrant and City National Bank, dated April 28, 2000 (incorporated by reference to the Registrant'sAnnual Report on Form 10-K for the year ended July 31, 2000 (File No. 1-15723)).10.44+ Distribution Agreement between the Registrant and Whole Foods Market Distribution, Inc., effective September 26, 2006 (incorporated byreference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 28, 2006 (File No. 1-15723)).10.45+ Amendment to Distribution Agreement between the Registrant and Whole Foods Market Distribution, Inc., effective June 2, 2010(incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 1-15723)).10.46+ Amendment to Distribution Agreement between the Registrant and Whole Foods Distribution effective October 11, 2010 (incorporated byreference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 30, 2010 (File No. 1-15723)).10.47 Second Amended and Restated Loan and Security Agreement dated May 24, 2012, by and among United Natural Foods, Inc., UnitedNatural Foods West, Inc., United Natural Trading Co. and UNFI Canada, Inc. as Borrowers, the Lenders party thereto, Bank of America,N.A. as Administrative Agent for the Lenders, Bank of America, N.A. (acting through its Canada branch), as Canadian Agent for theLenders and the other parties thereto (incorporated by reference to the Registrant's Current Report on Form 8-K, filed on May 31, 2012 (FileNo. 1-15723)).21* Subsidiaries of the Registrant.23.1* Consent of Independent Registered Public Accounting Firm.31.1* Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2* Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1* Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2* Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 73Table of ContentsExhibit No.Description101* The following materials from the United Natural Foods, Inc.'s Annual Report on Form 10-K for the fiscal year ended August 3, 2013,formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed ConsolidatedStatements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders'Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements. * Filed herewith.** Denotes a management contract or compensatory plan or arrangement.+ Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. This exhibit has been filed separately with the Securitiesand Exchange Commission accompanied by a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.74Exhibit 10.2UNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANAMENDMENT NO 1This Amendment No. 1 is made and entered into this 6th day of July, 2005 by United Natural Foods, Inc. (the “Employer”):W I T N E S S E T HWHEREAS, the Employer amended and restated the United Natural Foods, Inc. Employee Stock Ownership Plan, effective March 1, 2004 andWHEREAS, the Employer reserved the right to amend the Plan at any time.NOW THEREFORE, by adoption of this Amendment No. 1, the Employer hereby amends the Plan, effective March 28, 2005, as follows:1. The second sentence of Section 6.1(a) of the Plan is amended in its entirety to read as follows:“However, if the Vested portion of a Participant's Account exceeds One Thousand Dollars ($1,000), the Participant may elect to defer distributionuntil he or she attains age 65."IN WITNESS WHEREOF, the Employer has executed this Amendment No. 1 this 6th day of July, 2005, effective March 28, 2005. UNITED NATURAL FOODS, INC.By:/s/ Rick D. Puckett Authorized Officer TECHNICAL AMENDMENTUNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANWHEREAS, United Natural Foods, Inc. (the “Employer”), adopted the United Natural Foods, Inc. (the “Plan”); andWHEREAS, the Employer reserves the right to amend the Plan at any time.NOW THEREFORE, by adoption of this Amendment, the Employer hereby amends the Plan as follows effective as of the first Limitation Yearbeginning on or after July 1, 2007 unless stated otherwise:1. Section 1.7 shall be amended to read as follows:1.7 “Compensation” means the following:(a) Compensation includes the total of all amounts paid to a Participant for the Plan Year by the Company for personal servicesas reported on the Participant’s Federal Income Tax Withholding Statement (Form W-2), and shall include elective deferrals as defined in CodeSection 402(g)(3) and any amount which is contributed or deferred at the election of the Participant and which is not includible in the gross income ofthe Participant by reason of Code Sections 125, 132(f)(4) or 457.(b) Compensation excludes (even if includible in gross income), fringe benefits (cash and non-cash), moving expenses, deferredcompensation and compensation attributable to the exercise of any stock option which may be issued by the Employer.(c) In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to thecontrary, Compensation for any Participant taken into account under the Plan shall not exceed the compensation limit in Section 401(a)(17) of theCode. The Compensation of each Participant taken into account for determining all benefits under the Plan for the Plan Year shall not exceed$225,000, as adjusted for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. If a determination period consists offewer than 12 months, the applicable annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months inthe determination period, and the denominator of which is 12.(d) Notwithstanding, the above, Compensation paid after the date on which an Employee ceases to be an Employee shall bedisregarded provided however, the following amounts paid to a terminated Employee within the later of 2 1/2 months or the end of the LimitationYear that includes the date of his severance from employment shall constitute Compensation.(1) (i) the payment is regular Compensation for service during the Employee’s regular working hours or Compensationfor services outside the Employee’s regular working hours (such as overtime or shift differential) commissions, bonuses or other similar payments;and(ii) the payment would have been paid to the Employee prior to a severance from employment if the Employeehad continued in employment with the Employer.(2) the payment is for unused accrued bona fide sick, vacation or other leave, but only if the Employee would havebeen able to use the leave if employment had continue, or(3) payment from a nonqualified unfunded deferred compensation plan, but only if the payment would have been paidto the Employee at the same time if the Employee had continued in employment with the Employer and only to the extent that the payment isincludible in the employee’s gross income.Any payments including severance pay or parachute payments within the meaning of Code section 280G (b) (2) that are not described above are notconsidered Compensation if paid after severance from employment with the employer, even if it is paid within the time period described above.(e) Notwithstanding the above, Compensation shall include payments in the case of an individual who does not currentlyperform services for the employer by reason of qualified military service to the extent those payments do not exceed the amounts the individual wouldhave received if the individual had continue to perform services for the employer rather than entering qualified military service.(f) Compensation prior to the commencement of participation in the Plan shall be disregarded.2. Section 3.2(b) shall be amended by striking the last two sentences and inserting a new sentence in lieu thereto to read as follows:“Notwithstanding any provision of the Plan to the contrary, if the annual additions (within the meaning of Code section 415) are exceeded for anyParticipant, then the Plan may only correct such excess in accordance with the Employee Plans Compliance Resolution System (EPCRS) set forth inrevenue Procedure 2006-27 or any superseding guidance, including, but not limited to, the preamble of the final section 415 regulations.”IN WITNESS WHEREOF, the Employer has executed this Technical Amendment this 14th day of October, 2008.United Natural Foods, Inc.By:/s/ Mark E. ShamberUNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANAMENDMENT NO 3This Amendment is made and entered into this 14th day of April, 2010 by United Natural Foods, Inc. (the “Employer”);W I T N E S S E T HWHEREAS, the Employer amended and restated the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) effective March 1,2004; andWHEREAS, the Employer reserved the right to amend the Plan at any time.NOW THEREFORE, by adoption of this Amendment, the Employer hereby amends the Plan, effective as of November 1, 1988, as follows:1. Section 4.3(a) is amended to remove the second sentence thereof so the modified paragraph reads in its entirety as follows:(a) Any Financed Shares acquired by the Trust shall initially be credited to a Suspense Account and will be allocated to the Accounts ofParticipants only as payments on the Acquisition Loan are made by the Trustees.2. Section 4.3(b) is amended to remove the first sentence thereof and to clarify the remaining text so the modified paragraph reads in itsentirety as follows:(b) The number of Financed Shares to be released from the Suspense Account for allocation to Participants' Accounts for each Plan Yearshall be based upon the ratio that the payments of principal and interest on the Acquisition Loan for the Plan Year bears to the total projectedpayments of principal and interest for the Plan Year and over the remainder of the Acquisition Loan repayment period (determined without reference toany possible extensions or renewals thereof). For purposes of computing the above ratio, if the interest rate on an Acquisition Loan is variable, theinterest to be paid in subsequent Plan Years shall be calculated by assuming that the interest rate in effect as of the end of the applicable Plan Yearwill be the interest rate in effect for the remainder of the term of the Acquisition Loan. In the event such Acquisition Loan is repaid with the proceedsof a subsequent Acquisition Loan (the “Substitute Loan”), such repayment shall not operate to release all such Employer Stock in the SuspenseAccount but, rather, such release shall be effected pursuant to the foregoing provisions of this Section 4.3 based on payments of principal andinterest on the Substitute Loan. Notwithstanding the foregoing, if the requirements of Code Section 4975 and the related regulations are satisfied,Financed Shares may be allocated (as determined by the Plan Administrator in its discretion) to Participants' Accounts based on principal paymentson the Acquisition Loan.IN WITNESS WHEREOF, the Employer has executed this Amendment on the date first set forth above. UNITED NATURAL FOODS, INC.By:/s/ Mark E. Shamber Authorized OfficerUNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANAMENDMENT NO. 4This Amendment is made and entered into this 28th day of July, 2010 by United Natural Foods, Inc. (the “Employer”);W I T N E S S E T HWHEREAS, the Employer amended and restated the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) effective March 1,2004; andWHEREAS, the Employer reserved the right to amend the Plan at any time.NOW, THEREFORE, by adoption of this Amendment No. 4, the Employer hereby amends the Plan, effective as of the dates stated herein, asfollows:1. Section 1.9 is amended, effective August 1, 2010, to read as follows:1.9 “Disability” means a condition that qualifies the Participant for total disability benefits under a long-term disability plan maintained by the Employer orqualifies the Participant for Social Security disability benefits.2. Section 5.1 is amended, effective August 1, 2009, to add the following new paragraph to the end thereof:The table below shall be effective for Plan Years beginning on or after the earlier of (a) the date the Acquisition Loan that was outstanding on September 26,2005 is fully repaid or (b) May 15, 2015, the date the Acquisition Loan that was outstanding on September 26, 2005 is scheduled to be fully repaid, andshall apply only to allocations made to a Participant's Account for Plan Years beginning on or after such effective date (subject to Section 5.2 below). AParticipant shall be entitled to a percentage of the allocations described in the forgoing sentence, as determined in accordance with the following table:Participant'sYears of ServiceVested PercentageFewer than 2 years—%2 years25%3 years50%4 years75%5 years100%3. Section 6.1(g) is amended, effective January 1, 2008, to modify the “eligible retirement plan” definition, which appears in the thirdparagraph, by adding the following sentence to the end thereof:Effective as of January 1, 2008, the term “eligible retirement plan” includes an individual retirement plan described in Code Section 408A(b), subject to anylimitations described in Code Section 408A(c).4. Section 6.1(g) is amended, effective August 1, 2010, to add the following sentence immediately after the first sentence thereof:Notwithstanding any provision of the Plan to the contrary that would otherwise limit a non-spouse beneficiary's election under this Section 6.1(g), a non-spouse beneficiary may elect, at the time and in the manner prescribed by the Plan Administrator, to have all or any portion of an eligible rollover distributionpaid in a direct rollover, in cash and/or Employer Stock, directly to an individual retirement account described in Code Section 408(a) or an individualretirement annuity described in Code Section 408(b), other than an endowment contract, which has been established by the non-spouse beneficiary to receivethe eligible rollover distribution in accordance with Code Section 402(c)(ii).5. Article V is amended, effective January 1, 2007, to add the following new Section 5.6:5.6 Qualified Military Service. In the case of a Participant who dies while performing qualified military service (as defined in Code Section 414(u)), thesurvivors of the Participant are entitled to any additional benefits, including allocations relating to the period of qualified military service, provided under thePlan as though the Participant had resumed employment and then died. In the case of a Participant who becomes disabled while performing qualified militaryservice (as defined in Code Section 414(u)), the Participant is entitled to any additional benefits, including allocations relating to the period of qualified militaryservice, provided under the Plan as though the Participant had resumed employment and then became disabled.6. Section 8.5 is amended, effective March 1, 2004, to replace the text reading “Section 6.3 and Section 6.4” in the first sentence of the lastparagraph with text reading “Section 6.2 and Section 6.3.”7. Section 9.12 is amended, effective August 1, 2010, to read as follows:9.12 Claim and Appeal Procedures.(a) Initial Claim and Determination. Claims for benefits under the Plan shall be made in writing to the Plan Administrator or its dulyauthorized delegate. If the Plan Administrator or such delegate wholly or partially denies a claim for benefits, the Plan Administrator or, ifapplicable, its delegate, shall, within a reasonable period of time, but no later than ninety (90) days after receipt of the claim, notify theclaimant in writing or electronically of the adverse benefit determination. Notice of an adverse benefit determination shall be written in amanner calculated to be understood by the claimant and shall contain:(1) the specific reason or reasons for the adverse benefit determination,(2) a specific reference to the pertinent Plan provisions upon which the adverse benefit determination is based,(3) a description of any additional material or information necessary for the claimant to perfect the claim, together with anexplanation of why such material or information is necessary, and(4) an explanation of the Plan's review procedure and the time limits applicable to such procedure, including a statement of theclaimant's right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal.If the Plan Administrator or its delegate determines that an extension of time is necessary for processing the claim, the Plan Administrator orits delegate shall notify the claimant in writing of such extension, the special circumstances requiring the extension and the date by whichthe Plan Administrator expects to render the benefit determination. In no event shall the extension exceed a period of ninety (90) days fromthe end of the initial ninety (90) day period. If notice of the denial of a claim is not furnished in accordance with this paragraph (a) withinninety (90) days after the Plan Administrator or its duly authorized delegate receives it (or within one hundred and eighty (180) days aftersuch receipt if the Plan Administrator or its delegate determines an extension is necessary), the claim shall be deemed denied and theclaimant shall be permitted to proceed to the review stage described in paragraph (b) below.(b) Appeal of Initial Determination. Within sixty (60) days after the claimant receives written or electronic notice of an adverse benefitdetermination, or the date the claim is deemed denied pursuant to paragraph (a) above, or such later time as shall be deemed reasonable inthe sole discretion of the Plan Administrator taking into account the nature of the benefit subject to the claim and other attendantcircumstances, the claimant may file with the Plan Administrator a written request for review of the adverse benefit determination,including the holding of a hearing, if deemed necessary by the Plan Administrator. In connection with the claimant's appeal of the adversebenefit determination, the claimant may review pertinent documents and may submit issues and comments in writing. The PlanAdministrator shall render a decision on the appeal promptly, but not later than sixty (60) days after the receipt of the claimant's request forreview, unless special circumstances (such as the need to hold a hearing, if necessary) require an extension of time for processing, in whichcase the sixty (60) day period may be extended to one hundred and twenty (120) days. The Plan Administrator shall notify the claimant inwriting of any such extension, the special circumstances requiring the extension, and the date by which the Plan Administrator expects torender the determination on review. The claimant shall be notified of the Plan Administrator's decision in writing or electronically. In the caseof an adverse determination, such notice shall:(1) include specific reasons for the adverse determination,(2) be written in a manner calculated to be understood by the claimant,(3) contain specific references to the pertinent Plan provisions upon which the benefit determination is based,(4) contain a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of,all documents, records, and other information relevant to the claimant's claim for benefits, and(5) contain a statement of the claimant's right to bring an action under Section 502(a) of ERISA.(c)Limitation Period for Filing Actions and Notice of Error. No action at law or in equity may be brought to recover benefits or otherwise enforcethe provisions of the Plan unless the Participant, beneficiary or Alternate Payee (as defined in Section 6.6) has exhausted all remedies underthis Section 9.12. Any action brought after exhaustion of such remedies must be brought within ninety (90) days after the Participant,beneficiary or Alternate Payee has received final notice of an adverse benefit determination under Section 9.12(b). In no event may an actioninvolving an error or alleged error in the administration or investment of an account be brought at any time later than one (1) year after thedeadline for submission of a Notice of Error (as described in the paragraph below) has elapsed, unless the second sentence of this Section9.12(c) would permit such action to be brought at a later date.A written notice of error (“Notice of Error”) must be submitted to the Plan Administrator within ninety (90) days after a Participant,beneficiary or Alternate Payee receives or accesses a written benefit statement relating to his or her Account that indicates an error or allegederror in the administration or investment of such Account. Such Notice of Error should describe the error or alleged error in sufficient detailand include copies of account statements and/or other documents or records, to the extent applicable, to enable the Plan Administrator toinvestigate and resolve the matter.8. Article IX is amended, effective August 1, 2010, to add the following new Section 9.17:9.17 Use of Alternative Media. In any process or procedure for administering the Plan, the Plan Administrator (or its designee) may use alternative mediaincluding, but not limited to, telephone, facsimile, computer, or other such electronic means as are available. The use of such alternative media shall bedeemed to satisfy any Plan provision requiring a “written” document or an instrument to be signed “in writing” to the extent permissible under the Code andERISA.IN WITNESS WHEREOF, the Employer has executed this Amendment No. 4 on the date first set forth above. UNITED NATURAL FOODS, INC.By:/s/ Mark E. Shamber Authorized OfficerFIFTH AMENDMENTOFUNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANThis Fifth Amendment to the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) is hereby made this 27th day of March,2012, by United Natural Foods, Inc. (the “Employer”) to effectuate various revisions and updates to the Plan.WITNESSETH:WHEREAS, the Employer amended and restated United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) effective March 1, 2004;andWHEREAS, the Employer reserved the right to amend the Plan at any time;NOW, THEREFORE, by adoption of this Fifth Amendment, the Employer hereby amends the Plan, effective as of the dates stated herein, asfollows:1. Effective as of August 1, 2008, Section 4.3(a) is deleted, Section 4.3(b) is amended, to read as follows, and Sections 4.3(c) and (d) areredesignated as 4.3(b) and (c), respectively:“(a) Any Financed Shares acquired by the Trust shall initially be credited to a Suspense Account and will be allocated to the Accounts ofParticipants only as payments on the Acquisition Loan are made by the Trustees. The number of Financed Shares to be released from the Suspense Accountfor allocation to Participants' Accounts for each Plan Year shall be the number of Financed Shares held in the Suspense Account immediately before release forthe current Plan Year, the numerator of which is the amount of principal and interest paid on the Acquisition Loan for that Plan Year and the denominator ofwhich is the sum of the numerator and total of all payments of principal and interest to be paid during the remaining term of the Acquisition Loan.”2. By adding the following new Section 4.8 to the Plan:“4.8. Special One-Time Allocation. In order to reconcile the release and allocation of Financed Shares for Plan Years ending through July 31, 2008,during which time Financed Shares were released using the principal only method of release when the principal and interest method of release should have beenused, there will be a special one-time allocation of Financed Shares made on the July 31 coinciding with or next following the execution of a formal compliancestatement with the Internal Revenue Service related to this Section 4.8 in accordance with the Voluntary Compliance Program procedures of Revenue Procedure2008-50.The “eligible participants” to share in such special one-time allocation shall (i) for purposes of paragraph (a) of this Section 4.8, be those participantswho had Employer Stock allocated to their Accounts as of July 31, 2002 and were then vested or subsequently vested, and (ii) for purposes of paragraph (b)of this subsection 4.8, be those participants who had Employer Stock allocated to their Accounts during the period beginning on July 31, 2002 and ending onJuly 31, 2008. The Plan Administrator has determined that the number of under-released Financed Shares as of July 31, 2002 is 556,781.855 and that thenumber of over-released Financed Shares for Plan Years beginning on August 1, 2003 and ending on July 31, 2008 is 154,497.052. In addition, the Employerhas made a cash payment to the Plan of $149,097.63 to reconcile certain interest over-payments made by the Plan with respect to Financed Shares.Accordingly, the special one-time allocation shall be made to the Accounts of eligible participants as follows:(a)First, 50 percent of the number of under-released Financed Shares, or 278,390.9272, will be allocated to the Accounts of eligibleparticipants, pro rata, based on the ratio of Financed Shares allocated to the Account of each such eligible participant as of July31, 2002 to the aggregate number of Financed Shares allocated to all eligible participants on that date.(b)Second, the excess of remaining number of under-released Financed Share, or 278,390.9272, over the number of over-releasedFinanced Shares, 123,893.8755, will be allocated to the Accounts of eligibleparticipants based on the ratio of each eligible participant's number of Years of Service as of July 31, 2002 to the aggregate numberof Years of Service of all eligible participants as of that date.(c)Third, the cash settlement amount will be allocated to the Accounts of eligible participants on the same basis as described inparagraph (b) next above.” IN WITNESS WHEREOF, the Employer has executed this First Amendment on the date first set forth above. UNITED NATURAL FOODS, INC.By:/s/ Mark E. Shamber Authorized OfficerAmendment No. 6 to theUnited Natural Foods, Inc. Employee Stock Ownership PlanUnited Natural Foods, Inc. (the “Company”) hereby amends the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) asfollows effective March 1, 2004:1.Section 1.2 shall be amended by adding a new sentence to the end to read as follows:“Any such loan will be used primarily for the benefits of Participants and their Beneficiaries.”2.Section 3.2(b) shall be amended by deleting the following sentence:“At the option of the Employer, employees who are not among the top 20 percent of employees ranked on the basis of compensation paid during thePlan Year may be excluded from the definition of highly compensated employees.”3.The last sentence in Section 3.2(b) shall be amended read as follows:“Notwithstanding any provision of the Plan to the contrary, if the annual additions (within the meaning of Code section 415) are exceeded for anyParticipant, then the Plan may only correct such excess in accordance with the Employee Plans Compliance Resolution System (EPCRS) set forth inrevenue Procedure 2008-50 or any superseding guidance.”4.The first sentence of Section 4.3(b) shall be amended to read as follows:“Effective for the Plan Year beginning August 1, 2008, Financed Shares shall be allocated to the Accounts of Participants as payments of principaland interest on the Acquisition Loan are made by the Trustee.”5.Section 4.4(c) shall be deleted.6.Section 4.6 shall be amended by adding a new subsection (d) to read as follows:(d) Notwithstanding the foregoing, for purposes of transactions between the Plan and a disqualified person, fair market value shall be determinedas of the date of the transaction.7.Sections 6.l(d), (e) and (f) shall each be amended by adding a sentence to read as follows:“Employer Stock will not be considered “publicly traded on a nationally recognized securities exchange if the stock is traded only on the OTCBB.”8.Section 8.5 shall be amended by adding a new section (h) to read as follows: (h) The interest rate paid and the price of the stock to be acquired with the proceeds of an Acquisition Loan should not be such that the plan assetsmay be drained off.9.Section 8.5 shall be amended by adding the following sentence:“The Plan shall not be obligated to acquire securities from a particular security holder at an indefinite time determined upon the happening of an eventsuch as the death of the holder.”REMAINDER OF PAGE INTENTIONALLY LEFT BLANKTo record the adoption of the foregoing amendments to the Plan, the Company has caused this document to be executed on this 25th day of May,2012.UNITED NATURAL FOODS, INC. By:/s/ Mark E. ShamberPrintedName:Mark E. ShamberTitle:SVP, CFO and TreasurerREQUIRED MINIMUM DISTRIBUTION (“RMD'')AMENDMENT NO.7United Natural Foods, Inc. Employee Stock Ownership PlanUnited Natural Foods, Inc. (the “Company”) maintains the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”). Pursuant tothe Plan, the Employer reserves the right to amend the Plan from time to time.United Natural Foods, Inc. hereby amends the United Natural Foods, Inc. EmployeeStock Ownership Plan (the “Plan”) as follows:Section 6.1(c) shall be amended to add the following paragraph thereto:(d)Notwithstanding the preceding provisions of Section 6.1(c) to the contrary, the portion of any distribution that would have otherwiseconstituted a required minimum distribution for the 2009 calendar year with respect to a Participant or Beneficiary, including a distributionpaid after December 31, 2009, to any such individual whose required beginning date is April 1, 2010, shall not be made. This provisionshall not be interpreted to restrict the distribution of such amount to the extent the Participant or the Beneficiary would be entitled or requiredto receive a distribution of a vested Account under other provisions of the Plan.To record the adoption of the foregoing amendment to the Plan, the Company has caused this document to be executed on this 25th day of May,2012. UNITED NATURAL FOODS, INC. By:/s/ Mark E. ShamberPrinted Name:Mark E. ShamberTitle:SVP, CFO and TreasurerEIGHTH AMENDMENTOFUNITED NATURAL FOODS, INC.EMPLOYEE STOCK OWNERSHIP PLANThis Eighth Amendment to the United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) is hereby made this 23rd day of May,2013, by United Natural Foods, Inc. (the “Employer”) to effectuate various revisions and updates to the Plan.WITNESSETH:WHEREAS, the Employer amended and restated United Natural Foods, Inc. Employee Stock Ownership Plan (the “Plan”) effective March 1,2004; andWHEREAS, the Employer reserved the right to amend the Plan at any time;NOW, THEREFORE, by adoption of this Eighth Amendment, the Employer hereby amends the Plan, effective immediately:1.Section 7.7 is amended to read as follows:“7.7. Indemnification. To the maximum extent permitted by law, no person serving as Plan Administrator shall be personally liable by reason ofany contract or other instrument executed by the person or on the person's behalf in his or her capacity as Plan Administrator nor for any mistake ofjudgment made in good faith, and the Employer shall indemnify and hold harmless directly from its own assets (including the proceeds of anyinsurance policy, the premiums of which are paid from the Employer's own assets) each person serving as the Plan Administrator and each otherofficer, Employee, or director of the Employer to whom any duty or power relating to the administration or interpretation of the Plan or to themanagement and control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or liability(including any amount imposed in the form of a money judgment, civil penalty, excise tax, or any sum paid in settlement of a claim with theapproval of the Employer) arising out of any act or omission to act in connection with the Plan. No such individual shall be liable with respect to abreach of fiduciary duty if such a breach occurred before the individual became a fiduciary or after he or she ceased to be a fiduciary.However, these indemnification provisions shall not apply to the extent that any loss, cost, expense, or damage with respect to which any indemniteeshall seek indemnification is held by a court of competent jurisdiction, in a final judgment from which no appeal can be taken, to have resultedeither from the gross negligence or willful misconduct of the indemnitee or from the violation or breach of any fiduciary duty imposed under ERISAon the indemnitee. An indemnitee who receives an advancement of fees or expenses from the Employer pursuant to this Section 7.7 shall makearrangements reasonably satisfactory to the Employer to ensure that such indemnitee will reimburse the Employer for such advancements in the eventit is determined the indemnitee is not entitled to retain such amounts hereunder.”2.In all other respects, the Plan shall remain unchanged and in full force and effect.3.The Plan is further amended to erase any contrary changes necessary to affect the amendment.4.If any typographic or other drafting error is discovered in this amendment, it shall be corrected and such correction shall have the sameforce and effect as it originally contained in this amendment and, except to the extent necessary to give effect to this amendment, the Planshall otherwise remain unchanged.5.IN WITNESS WHEREOF, the Employer has executed this Eighth Amendment on the date first set forth above. UNITED NATURAL FOODS, INC. By:/s/ Joseph J. Traficanti Authorized OfficerExhibit 10.31United Natural FoodsSenior Management CashIncentive Plan Effective for FY2014I. Administration of Incentive PlanThe Senior Management Cash Incentive Plan (the “Incentive Plan”) is based on the 2014 fiscal year, August 4, 2013 - August 2, 2014 forUnited Natural Foods, Inc. (the “Company”). This Inventive Plan shall be administered pursuant to the Company’s 2004 Equity IncentivePlan; it is the intention of the Company that all awards hereunder to Covered Executives shall qualify for the “performance-based exception”to the deduction limitation imposed by Section 162(m) of the Code. All provisions hereof shall be interpreted accordingly. Capitalized termsnot otherwise defined herein shall have the meaning set forth in the Company’s 2004 Equity Incentive Plan. All incentive payouts will becalculated and paid by the Company on a date selected by the Company in its sole discretion that is not later than the later of i) the 15th day ofthe third month following the end of the Company’s 2014 fiscal year; or (ii) March 15 of the calendar year following the calendar year in whichthe bonus is earned; provided that no payment will be made prior to the end of the Company’s 2014 fiscal year. All Incentive Plan payouts aresubject to required local, state and federal taxes deductions.The Incentive Plan shall be administered by the Compensation Committee of the Company’s Board of Directors (the “CompensationCommittee”). The Compensation Committee may delegate to certain associates the authority to manage the day-to-day administrativeoperations of the Incentive Plan as it may deem advisable.The Compensation Committee reserves the right to amend, modify, or terminate the Incentive Plan at any time in its sole discretion.The Compensation Committee shall have the authority to modify the terms of any award under the Incentive Plan that has been granted, todetermine the time when awards under the Incentive Plan will be made, the amount of any payments pursuant to such awards, and theperformance period to which they relate, to establish performance objectives in respect of such performance periods and to determinewhether such performance objectives were attained. The Committee is authorized to interpret the Plan, to establish, amend and rescind anyrules and regulations relating to the Incentive Plan, and to make any other determinations that it deems necessary or desirable for theadministration of the Incentive Plan. The Compensation Committee may correct any defect or omission or reconcile any inconsistency in theIncentive Plan in the manner and to the extent the Compensation Committee deems necessary or desirable. Any decision of theCompensation Committee in the interpretation and administration of the Incentive Plan, as described herein, shall lie within its sole andabsolute discretion and shall be final, conclusive and binding on all parties concerned. Determinations made by the CompensationCommittee under the Incentive Plan need not be uniform and may be made selectively among participants in the Incentive Plan, whether ornot such participants are similarly situated. Any and all changes will be communicated to those executives participating in the Incentive Planthat are affected by the changes.II. Incentive Plan EligibilityThe Compensation Committee shall determine the executive officers and other members of the Company’s senior management eligible forparticipation in the Incentive Plan.Participants in the Incentive Plan hired or promoted from August 4, 2013 through January 31, 2014 will be eligible for a prorated payout atthe end of the fiscal year if he or she achieves the required performance metrics of his or her individual program. Such prorated payout shallbe made in accordance with the payment provisions of Section I above. Participants in the Incentive Plan hired or promoted from February 1,2014 through August 2, 2014 will not be eligible to participate in the Incentive Plan for the 2014 fiscal year. Additionally, if any participantreceives a change in base salary during the performance period, the bonus payout earned by the participant, if any, will be proratedaccordingly.All Incentive Plan participants must accept the commitment and responsibility to perform all duties in compliance with the Company’sStandards of Conduct. Any participant who manipulates or attempts to manipulate the Incentive Plan for personal gain at the expense ofcustomers, other associates, or Company objectives will be subject to appropriate disciplinary actions.Participants must not divulge to any outsider any non-public information regarding this Incentive Plan or any specific performance metricsapplicable to the participant.Participation in the Incentive Plan does not constitute a contract or promise of employment between the Company and any participant in theIncentive Plan. Any promise or representations, oral or written, which are inconsistent with or different from the terms of the Incentive Planare invalid.III. Termination ProvisionsAny participant whose employment is terminated for any reason (e.g., voluntary separation or termination due to misconduct) prior to the endof the 2014 fiscal year will not be eligible for distribution of awards under the Incentive Plan. A participant whose employment is terminatedfor any reason following the end of the 2014 fiscal year but prior to the payout of awards under the Incentive Plan shall remain entitled toreceive the award earned by such participant. If a participant becomes disabled during the 2014 fiscal year or is granted a leave of absenceduring that time, a pro rata share of the participant’s award based on the period of actual participation may, in the Compensation Committee’ssole discretion, be paid to the participant after the end of the performance period if it would have become earned and payable had theparticipant’s employment status not changed.IV. Performance MeasuresParticipants in the Incentive Plan may receive a cash award upon the attainment of performance goals which may be corporate and/orindividual goals. The percentage of any award payable pursuant to the Incentive Plan shall be based on the weights assigned to the applicableperformance goal. Each participant’s incentive award is based on a designated percentage of the participant’s base pay and is established bythe Compensation Committee.Each participant in the Incentive Plan will be eligible for a bonus payout conditioned on the achievement of performance measures outlined inan Incentive Plan Grid approved by the Compensation Committee.The Compensation Committee shall determine whether and to what extent each performance goal has been met. In determining whetherand to what extent a performance goal has been met for participants other than the Chief Executive Officer of the Company, theCompensation Committee shall consider the recommendation of the Chief Executive Officer and may consider such other matters as theCompensation Committee deems appropriate.V. Miscellaneous ProvisionsNotwithstanding anything to the contrary herein, the Compensation Committee, in its sole discretion, may reduce any amounts otherwisepayable to a participant hereunder in order to satisfy any liabilities owed to the Company or any of its subsidiaries by the participant.In the event of any material change in the business assets, liabilities or prospects of the Company, any division or any subsidiary, theCompensation Committee in its sole discretion and without liability to any person may make such adjustments, if any, as it deems to beequitable as to any affected terms of outstanding awards.The Company is the sponsor and legal obligor under the Incentive Plan and shall make all payments hereunder, other than any payments tobe made by any of the subsidiaries (in which case payment shall be made by such subsidiary, as appropriate). The Company shall not berequired to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any amounts underthe Incentive Plan, and the participant’s rights to the payment hereunder shall be not greater than the rights of the Company’s (orsubsidiary’s) unsecured creditors. All expenses involved in administering the Incentive Plan shall be borne by the Company.The Incentive Plan shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made andto be performed in the State of Delaware.Each participant agrees that payouts under this Incentive Plan are subject to the Company’s Recoupment Policy for performance-basedincentive compensation and also further agrees to return to the Company, if the Company shall so request, all or a portion of any incentiveamounts paid to such participant pursuant to this Incentive Plan based upon financial information or performance metrics later found to bematerially inaccurate. The amount to berecovered shall be equal to the excess amount paid out over the amount that would have been paid out had such financial information orperformance metric been fairly stated at the time the payout was made.Notwithstanding anything herein to the contrary, the Compensation Committee, in its sole discretion, may make payments (including prorata payments) to participants who do not meet the eligibility requirements of the Incentive Plan, including, but not limited to, the length ofservice requirements described in Section II above if the Plan Committee determines that such payments are in the best interest of theCompany.Exhibit 10.38Modification of Indemnification Agreement___________________________:As you know, United Natural Foods, Inc. (the “Corporation”) provides indemnification to you as a director or officer of the Corporation pursuant to a writtenindemnification agreement dated ______, 20____ (your “Indemnification Agreement”).Your Indemnification Agreement will be modified, effective immediately, by adding the following sentence as the new last sentence of Paragraph 5 of yourIndemnification Agreement:Further, the Corporation shall not be obligated under this Agreement to make any payment to Indemnitee with respect to any Proceeding in whichIndemnitee is held by a court of competent jurisdiction, in a final judgment from which no appeal can be taken, to have violated or breached anyfiduciary duty imposed on Indemnitee by the Employee Retirement Income Security Act of 1974, as amended.Please indicate your agreement to this modification of your Indemnification Agreement by signing below.AGREED: UNITED NATURAL FOODS, INC. By: Its: Dated: Dated: Exhibit 10.39INDEMNIFICATION AGREEMENTThis Agreement is made as of the ____ day of ___________, 2013, by and between United Natural Foods, Inc., a Delaware corporation (the“Corporation), and _________________ (“Indemnitee”), a director or officer of the Corporation.WHEREAS, it is essential to the Corporation to retain and attract as directors and officers the most capable persons available, andWHEREAS, the substantial increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that theavailability of directors’ and officers’ liability insurance has been severely limited, andWHEREAS, it is now and has always been the express policy of the Corporation to indemnify its directors and officers so as to provide them withthe maximum possible protection permitted by law, andWHEREAS, Indemnitee does not regard the protection available under the Corporation’s Certificate of Incorporation and insurance as adequate in thepresent circumstances, and may not be willing to serve as a director or officer without adequate protection, andWHEREAS, the Corporation desires Indemnitee to serve as a director or officer of the Corporation.NOW THEREFORE, the Corporation and Indemnitee do hereby agree as follows:1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as a director or officer of the Corporation for so long as he/she is duly electedor appointed or until such time as he/she tenders his/her resignation in writing.2. Definitions. As used in this Agreement:(a) The term “Proceeding” shall include any threatened, pending or completed action, suit, or proceeding, whether brought by or in theright of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, and any appeal therefrom.(b) The term “Corporate Status” shall mean the status of a person who is or was a director or officer of the Corporation, or is or wasserving, or has agreed to serve, at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture,trust or other enterprise.(c) The term “Expenses” shall include, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, travelexpenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and other disbursements or expenses of the typescustomarily incurred in connection with investigations, judicial or administrative proceedings or appeals, but shall not include the amount of judgments, finesor penalties against Indemnitee or amounts paid in settlement in connection with such matters.(d) References to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed withrespect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agentof the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, itsparticipants, or beneficiaries; and a person who acted in good faith and in a manner he/she reasonably believed to be in the interests of the participants andbeneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in thisAgreement.3. Indemnification in Third−Party Proceedings. The Corporation shall indemnify Indemnitee in accordance with the provisions of this Paragraph 3if Indemnitee was or is a party to or threatened to be made a party to or otherwise involved in any Proceeding (other than a Proceeding by or in the right of theCorporation to procure a judgment in its favor) by reason of his/her Corporate Status or by reason of any action alleged to have been taken or omitted inconnection therewith, against all Expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by Indemnitee or onhis/her behalf in connection with such Proceeding, if Indemnitee acted in good faith and in a manner which he/she reasonably believed to be in, or not opposedto, the best interests of the Corporation and, with respect to of any criminal Proceeding, had no reasonable cause to believe that his/her conduct was unlawful.The termination of any Proceeding by judgment, order, settlement, conviction orupon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner whichhe/she reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal Proceeding, had reasonable causeto believe that his/her conduct was unlawful.4. Indemnification in Proceedings by or in the Right of the Corporation. The Corporation shall indemnify Indemnitee in accordance with theprovisions of this Paragraph 4 if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any Proceeding by or in the right of theCorporation to procure a judgment in its favor by reason of his/her Corporate Status or by reason of any action alleged to have been taken or omitted inconnection therewith, against all Expenses and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by Indemnitee oron his/her behalf in connection with such Proceeding, if he/she acted in good faith and in a manner which he/she reasonably believed to be in, or not opposedto, the best interests of the Corporation, except that no indemnification shall be made under this Paragraph 4 in respect of any claim, issue, or matter as towhich Indemnitee shall have been adjudged to be liable to the Corporation, unless and only to the extent that the Court of Chancery of Delaware shall determineupon application that, despite the adjudication of such liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled toindemnity for such Expenses as the Court of Chancery shall deem proper.5. Exceptions to Right of Indemnification. Notwithstanding anything to the contrary in this Agreement, except as set forth in Paragraph 10, theCorporation shall not indemnify the Indemnitee in connection with a Proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof wasapproved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Agreement, the Corporation shall not indemnify theIndemnitee to the extent the Indemnitee is reimbursed from the proceeds of insurance, and in the event the Corporation makes any indemnification payments tothe Indemnitee and the Indemnitee is subsequently reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund such indemnificationpayments to the Corporation to the extent of such insurance reimbursement. Further, the Corporation shall not be obligated under this Agreement to make anypayment to Indemnitee with respect to any Proceeding in which Indemnitee is held by a court of competent jurisdiction, in a final judgment from which noappeal can be taken, to have violated or breached any fiduciary duty imposed on Indemnitee by the Employee Retirement Income Security Act of 1974, asamended.6. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has beensuccessful, on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified againstall Expenses incurred by him/her or on his/her behalf in connection therewith. Without limiting the foregoing, if any Proceeding or any claim, issue or mattertherein is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) anadjudication that the Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the Indemniteedid not act in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to anycriminal proceeding, an adjudication that the Indemnitee had reasonable cause to believe his/her conduct was unlawful, the Indemnitee shall be considered forthe purposes hereof to have been wholly successful with respect thereto.7. Notification and Defense of Claim. As a condition precedent to his/her right to be indemnified, the Indemnitee must notify the Corporation inwriting as soon as practicable of any Proceeding for which indemnity will or could be sought by him and provide the Corporation with a copy of anysummons, citation, subpoena, complaint, indictment, information or other document relating to such Proceeding with which he/she is served. With respect toany Proceeding of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defensethereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so toassume such defense, the Corporation shall not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee inconnection with such claim, other than as provided below in this Paragraph 7. The Indemnitee shall have the right to employ his/her own counsel inconnection with such claim, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shallbe at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel to theIndemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and theIndemnitee in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, ineach of which cases the fees and expenses of counsel for the Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided bythis Agreement. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right ofthe Corporation or as to which counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.8. Advancement of Expenses. Subject to the provisions of Paragraph 9 below, in the event that the Corporation does not assume the defensepursuant to Paragraph 7 of this Agreement of any Proceeding to which Indemnitee was or is a party or is threatened to be made a party by reason of his/herCorporate Status or by reason of any action alleged to have been taken oromitted in connection therewith and of which the Corporation receives notice under this Agreement, any Expenses incurred by the Indemnitee in defending suchProceeding shall be paid by the Corporation in advance of the final disposition of such matter; provided, however, that the payment of such Expensesincurred by the Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of theIndemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by theCorporation as authorized in this Agreement. Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to make repayment.9. Procedure for Indemnification. In order to obtain indemnification or advancement of Expenses pursuant to Paragraphs 3, 4, 6 or 8 of thisAgreement, Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonablyavailable to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification or advancement ofExpenses. Any such indemnification or advancement of Expenses shall be made promptly, and in any event within 60 days after receipt by the Corporation ofthe written request of the Indemnitee, unless with respect to requests under Paragraphs 3, 4 or 8 the Corporation determines within such 60-day period thatsuch Indemnitee did not meet the applicable standard of conduct set forth in Paragraph 3 or 4, as the case may be. Such determination shall be made in eachinstance by (a) a majority vote of the directors of the Corporation consisting of persons who are not at that time parties to the Proceeding (“disinteresteddirectors”), whether or not a quorum, (b) a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote for directors, voting as asingle class, which quorum shall consist of stockholders who are not at that time parties to the Proceeding, (c) independent legal counsel (who may, to theextent permitted by applicable law, be regular legal counsel to the Corporation), or (d) a court of competent jurisdiction.10. Remedies. The right to indemnification or advancement of Expenses as provided by this Agreement shall be enforceable by the Indemnitee inany court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60−day periodreferred to above in Paragraph 9. Unless otherwise required by law, the burden of proving that indemnification is not appropriate shall be on the Corporation.Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in thecircumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Paragraph 9 thatIndemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicablestandard of conduct. Indemnitee’s expenses (of the type described in the definition of “Expenses” in Paragraph 2(c)) reasonably incurred in connection withsuccessfully establishing his/her right to indemnification, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation.11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or aportion of the Expenses, judgments, fines, penalties or amounts paid in settlement actually and reasonably incurred by him/her or on his/her behalf inconnection with any Proceeding but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of suchExpenses, judgments, fines, penalties or amounts paid in settlement to which Indemnitee is entitled.12. Subrogation. In the event of any payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of therights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of suchdocuments as are necessary to enable the Corporation to bring suit to enforce such rights.13. Term of Agreement. This Agreement shall continue until and terminate upon the later of (a) six years after the date that Indemnitee shall haveceased to serve as a director or officer of the Corporation or, at the request of the Corporation, as a director, officer, employee or agent of another corporation,partnership, joint venture, trust or other enterprise or (b) the final termination of all Proceedings pending on the date set forth in clause (a) in respect of whichIndemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Paragraph10 of this Agreement relating thereto.14. Indemnification Hereunder Not Exclusive. The indemnification and advancement of Expenses provided by this Agreement shall not be deemedexclusive of any other rights to which Indemnitee may be entitled under the Certification of Incorporation, the By−Laws, any agreement, any vote ofstockholders or disinterested directors, the General Corporation Law of Delaware, any other law (common or statutory), or otherwise, both as to action inhis/her official capacity and as to action in another capacity while holding office for the Corporation. Nothing contained in this Agreement shall be deemed toprohibit the Corporation from purchasing and maintaining insurance, at its expense, to protect itself or the Indemnitee against any expense, liability or lossincurred by it or him in any such capacity, or arising out of his/her status as such, whether or not the Indemnitee would be indemnified against such expense,liability or loss under this Agreement; provided that the Corporation shall not be liable under this Agreement to make any payment of amounts otherwiseindemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.15. No Special Rights. Nothing herein shall confer upon Indemnitee any right to continue to serve as an officer or director of the Corporation forany period of time or at any particular rate of compensation.16. Savings Clause. If this Agreement or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then theCorporation shall nevertheless indemnify Indemnitee as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to anyProceeding to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest extent permitted byapplicable law.17. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute the original.18. Successors and Assigns. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefitof the estate, heirs, executors, administrators and personal representatives of Indemnitee.19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of thisAgreement or to affect the construction thereof.20. Modification and Waiver. This Agreement may be amended from time to time to reflect changes in Delaware law or for other reasons. Nosupplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of theprovisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof nor shall any such waiver constitute a continuingwaiver.21. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been given (i)when delivered by hand or (ii) if mailed by certified or registered mail with postage prepaid, on the third day after the date on which it is so mailed:(a) if to the Indemnitee, to: ____________________________________________________________(b) if to the Corporation, to: United Natural Foods, Inc.313 Iron Horse WayProvidence, RI 02908or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be.22. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.THE CORPORATION:UNITED NATURAL FOODS,INC. By: Name: Title: INDEMNITEE: Exhibit 21SUBSIDIARIES OF THE REGISTRANTNAMEJURISDICTION OFINCORPORATION/FORMATIONUnited Natural Foods West, Inc.CaliforniaNatural Retail Group, Inc.Delawared/b/a Earth Origins Market Albert's Organics, Inc.CaliforniaUNFI Canada, Inc.CanadaBlue Marble Brands, LLCDelawareUnited Natural Trading, LLCDelawared/b/a Woodstock Farms Manufacturing United Natural Transportation, Inc.DelawareSpringfield Development Corp LLCDelawareExhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsUnited Natural Foods, Inc. and subsidiaries:We consent to the incorporation by reference in the registration statements (Nos. 333-161845, 333-161884, 333-19947, 333-19949, 333-71673, 333-56652,333-106217, 333-123462, and 333-185637) on Form S-8 of United Natural Foods, Inc. of our report dated October 1, 2013, with respect to the consolidatedbalance sheets of United Natural Foods, Inc. and subsidiaries as of August 3, 2013 and July 28, 2012, and the related consolidated statements of income,comprehensive income, stockholders' equity and cash flows for each of the fiscal years in the three-year period ended August 3, 2013, and the effectiveness ofinternal control over financial reporting as of August 3, 2013, which report appears in the August 3, 2013 annual report on Form 10-K of United NaturalFoods, Inc.Providence, Rhode IslandOctober 1, 2013Exhibit 31.1CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Steven L. Spinner certify that:1.I have reviewed this annual report on Form 10-K of United Natural Foods, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. /s/ STEVEN L. SPINNER Steven L. SpinnerChief Executive Officer October 1, 2013Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities andExchange Commission or its staff upon request.Exhibit 31.2CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Mark E. Shamber certify that:1.I have reviewed this annual report on Form 10-K of United Natural Foods, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. /s/ MARK E. SHAMBER Mark E. Shamber Chief Financial Officer October 1, 2013Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities andExchange Commission or its staff upon request.Exhibit 32.1CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002The undersigned, in his capacity as the Chief Executive Officer of United Natural Foods, Inc., a Delaware corporation (the "Company"), herebycertifies that the Annual Report of the Company on Form 10-K for the period ended August 3, 2013 fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934 and that the information contained in such Annual Report on Form 10-K fairly presents in all material respectsthe financial condition and results of operations of the Company. /s/ STEVEN L. SPINNER Steven L. SpinnerChief Executive Officer October 1, 2013Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities andExchange Commission or its staff upon request.Exhibit 32.2CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002The undersigned, in his capacity as the Chief Financial Officer of United Natural Foods, Inc., a Delaware corporation (the "Company"), herebycertifies that the Annual Report of the Company on Form 10-K for the period ended August 3, 2013 fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934 and that the information contained in such Annual Report on Form 10-K fairly presents in all material respectsthe financial condition and results of operations of the Company. /s/ MARK E. SHAMBER Mark E. ShamberChief Financial Officer October 1, 2013Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities andExchange Commission or its staff upon request.

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