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United Natural Foods

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FY2023 Annual Report · United Natural Foods
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☒   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 29, 2023
or
☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
         For the transition period from             to            

Commission File Number: 001-15723

Delaware
(State or other jurisdiction of incorporation or organization)

05-0376157
(I.R.S. Employer Identification No.)

UNITED NATURAL FOODS, INC. 
(Exact name of registrant as specified in its charter)

313 Iron Horse Way, Providence, RI 02908
(Address of principal executive offices) (Zip Code)

 Registrant’s telephone number, including area code: (401) 528-8634

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common stock, par value $0.01

Trading Symbol

UNFI

Name of each exchange on which registered

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 
preceding 12 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 
company.  See  the  definitions  of  “large  accelerated  filer,”  “accelerated  filer,”  “smaller  reporting  company”  and  “emerging  growth  company”  in  Rule  12b-2  of  the 
Exchange Act.

Large accelerated filer

Non-accelerated filer

☒  
☐  

Accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial 
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ 
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the 
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the 
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $2,394 million based upon the closing price of the registrant’s 
common stock on the New York Stock Exchange on January 27, 2023. The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as 
of September 21, 2023 was 58,499,938. 

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on December 19, 2023 are incorporated herein by reference into 
Part III of this Annual Report on Form 10-K.

 
 
 
 
 
 
UNITED NATURAL FOODS, INC.

FORM 10-K

TABLE OF CONTENTS

Business

Section
Part I
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4. Mine Safety Disclosures

Properties
Legal Proceedings

Part II
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 

Securities
Reserved

Item 6.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information

Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Item 12.

Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14.

Principal Accounting Fees and Services

Part IV
Item 15.
Item 16.

Exhibit and Financial Statement Schedules
Form 10-K Summary
Signatures

Page

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 Table of Contents

ITEM 1.    BUSINESS

PART I.

In this Annual Report on Form 10-K (“Annual Report” or “Report”), unless otherwise specified, references to “United Natural 
Foods”,  “UNFI”,  “we”,  “us”,  “our”  or  the  “Company”  mean  United  Natural  Foods,  Inc.  together  with  its  consolidated 
subsidiaries. We are a Delaware corporation based in Providence, Rhode Island and Eden Prairie, Minnesota. We conduct our 
business  through  various  subsidiaries.  Since  the  formation  of  our  predecessor  in  1976,  we  have  grown  our  business  both 
organically and through acquisitions, which have expanded our distribution network, product selection and customer base.

Our Background

UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States 
and  Canada.  We  believe  we  are  uniquely  positioned  to  provide  the  broadest  array  of  products  and  services  to  customers 
throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the 
largest grocers in the country to smaller independents as well. We offer approximately 250,000 products consisting of national, 
regional  and  private  label  brands  grouped  into  the  following  main  product  categories:  grocery  and  general  merchandise; 
perishables;  frozen  foods;  wellness  and  personal  care  items;  and  bulk  and  foodservice  products.  We  believe  we  are  North 
America’s  premier  grocery  wholesaler  with  55  distribution  centers  and  warehouses  representing  approximately  30  million 
square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in 
Canada,  making  us  a  desirable  partner  for  retailers  and  consumer  product  manufacturers.  We  believe  our  total  product 
assortment  and  service  offerings  are  unmatched  by  our  wholesale  competitors.  We  plan  to  continue  to  pursue  new  business 
opportunities  with  independent  retailers  that  operate  diverse  formats,  regional  and  national  chains,  as  well  as  international 
customers  with  wide-ranging  needs.  Our  business  is  classified  into  two  reportable  segments:  Wholesale  and  Retail;  and  also 
includes a manufacturing division and a branded product line division. 

Our Strategic Priorities

We  are  continually  striving  to  better  serve  our  stakeholders,  including  our  customers,  suppliers,  associates  and  communities, 
while  driving  profitable  growth  and  sustainable  shareholder  value  creation.  We  have  recently  introduced  our  transformation 
strategy designed to accomplish this. Our enterprise-wide business transformation strategy, which we believe will position us 
for customer service and cost structure improvement, consists of four areas: 

1. Network  Automation  and  Optimization:  Enhancing  our  distribution  network  to  drive  efficiency  and  improve  the 

customer experience, which we expect to increase network capacity and scalability.

2. Commercial  Value  Creation:  Generating  more  profitable  revenue  growth  through  simplified  pricing  and  procurement, 

and enhancing analytical insights for our customers and suppliers, making it easier to do business with UNFI.

3. Digital  Offering  Enhancement:  Integrating  and  enhancing  the  functionality  of  the  digital  platforms  we  offer  and 

expanding the actionable intelligence we provide through these platforms.

4. Infrastructure  Unification  and  Modernization:  Addressing  legacy  integration  issues  and  continuing  investments  to 
upgrade and simplify our digital infrastructure, which we expect will streamline operations, provide greater visibility and 
enhance our scale.

We  are  also  working  on  near-term  initiatives  to  help  improve  profitability  while  we  execute  our  longer-term  strategy.  These 
include  actioning  administrative  structure  efficiencies,  reprioritizing  our  selling  and  administrative  spending,  optimizing  our 
stock-keeping  unit  (“SKU”)  assortment  as  well  as  reviewing  commercial  contracts  in  collaboration  with  our  customers  and 
suppliers. 

We expect to continue to use available capital to re-invest in our business, and we remain committed to improving our financial 
leverage  and  reducing  outstanding  debt  over  the  long  term.  Since  the  close  of  our  2018  acquisition  of  SUPERVALU  INC. 
(“Supervalu”), we have reduced net debt by $1.4 billion.

We believe we can enhance our profitability and accelerate our growth through our transformation efforts, which we expect will 
improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to 
help our customers run their businesses more efficiently and contribute to customer acquisitions. We believe the key drivers for 
value  creation  will  be  improved  efficiency  through  the  automation  and  optimization  of  our  supply  chain,  as  well  as  new 
customer growth associated with the benefits of our significant scale, product and service offerings and nationwide footprint.

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Our Commitment to Social and Environmental Responsibility

Building a Food System That’s Better for All

As North America’s premier grocery wholesaler, we are using our scale to drive progress across the food industry, focusing on 
the areas where we can affect the greatest change. Now in the third year since unveiling our Better for All plan, we continue to 
evaluate the impacts we have along our value chain, focusing on proactively engaging with the people making and moving the 
products we distribute. 

In fiscal 2023, we published our 12th annual Better for All report, which offers a summary of our social, environmental, and 
governance impacts during the fiscal year, and the second update to this plan, which prioritizes nine areas of focus: Associate 
Safety & Well-being, Climate Action, Community Development, Customer Health & Safety, Diversity, Equity, and Inclusion, 
Energy  Efficiency,  Governance,  Responsible  Procurement,  and  Waste  Reduction.  The  report  is  available  on  our  website  at 
www.betterforall.unfi.com and highlights progress toward goals including waste reduction, supplier diversity, food donations, 
and food safety. Our Better for All report and the contents of our Better for All webpage are not incorporated by reference into 
or considered to be part of this Annual Report.

Upstream

Our impact begins with the decisions made by our partners and suppliers, well before products reach our distribution centers. 
We  are  investing  in  programs  and  partnerships  that  will  help  build  a  more  equitable  system  and  carry  our  values  further 
upstream.  In  fiscal  2023,  we  launched  the  UNFI  Climate  Action  Partnership,  encouraging  suppliers  to  set  credible  climate 
goals. The program builds on UNFI’s Climate Action Hub, which offers suppliers a variety of tools and resources to innovate 
and scale climate solutions across the food system. We also published a new Deforestation Policy, an updated Animal Welfare 
Position  Statement,  and  an  updated  Supplier  and  Vendor  Code  of  Conduct,  clearly  outlining  expectations  of  suppliers  on 
responsible procurement topics.

Operations

We  remain  focused  on  operating  efficiently  and  sustainably,  which  includes  managing  the  social  and  environmental  impacts 
within our direct control. Our associates’ safety and well-being are of utmost importance to us. Our primary goal is to cultivate 
a  culture  that  values  care  and  safety  for  all.  Through  continuous  efforts  we  are  dedicated  to  achieving  zero  injuries  and 
accidents,  ensuring  a  safe  and  thriving  environment  for  everyone.  In  fiscal  2023,  we  received  a  score  of  100  on  the  Human 
Rights Campaign Foundation’s 2022 Corporate Equality Index and a score of 100 on the Disability Equality Index. In 2023, we 
launched  our  seventh  associate-led  Belonging  &  Innovation  Group,  the  Asian  Coalition  for  Engagement,  to  celebrate  Asian 
Pacific  Islander  heritage,  promote  career  development  and  foster  a  safe  space  for  all.  We  also  completed  key  initiatives  in 
support of our science-based climate targets, including the completion of LED lighting installations at all distribution centers, 
the installation of our largest solar array to date in Howell, New Jersey, and achievement of our goal of sourcing 20% of our 
electricity from renewable sources.

Downstream

We aim to be responsible community members, from how we provide information and services to our customers, to the local 
organizations our associates support with their volunteer hours. In fiscal 2023, we significantly grew associate volunteerism and 
the UNFI Foundation, a 501(c)(3) organization, began a five-year strategic planning process intended to make a more profound 
impact on the communities we serve. We also made strides toward our food waste reduction goal and expanded our partnership 
with  Too  Good  to  Go,  an  innovative  food  waste  reduction  app  and  the  largest  business-to-consumer  marketplace  for  surplus 
food.

Social and environmental responsibility remains integral to our overall business strategy, and we believe these practices deliver 
significant value to our stakeholders, including our stockholders, associates, customers, suppliers and communities.

Our Customers

We  maintain  long-standing  relationships  with  many  of  our  customers.  We  serve  over  30,000  unique  customer  locations, 
primarily  located  across  the  United  States  and  Canada,  which  we  classify  into  five  customer  types:  Chains;  Independent 
retailers; Supernatural; Retail; and Other. Refer to Note 3—Revenue Recognition in Part II, Item 8 of this Annual Report for 
additional information.

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 Table of Contents

We  have  been  the  primary  distributor  to  Whole  Foods  Market  for  more  than  20  years.  We  continue  to  serve  as  the  primary 
distributor to Whole Foods Market in all of its regions in the United States pursuant to an amended distribution agreement with 
a term through September 27, 2027. Whole Foods Market is our only customer that represented more than 10% of total Net 
sales in fiscal 2023.

Our international Net sales primarily reflect UNFI Canada, Inc. (“UNFI Canada”), which represented approximately 1% of our 
Net sales in fiscal 2023. International business excludes sales transacted in U.S. dollars and shipped internationally, which is an 
even smaller component of our business.

We also continue to invest in technology and systems with the intent of improving the efficiency of our operations, enhancing 
the customer experience and growing our services platform, including our eCommerce and innovation businesses. This includes 
sales to eCommerce companies as well as business-to-business sales to non-traditional customers. In fiscal 2021, we launched 
Marketplace by UNFI, a business-to-business digital eCommerce solution for emerging brands looking to expand distribution 
with  UNFI  customers.  Through  this  virtual  marketplace,  suppliers  gain  immediate  access  to  UNFI’s  digital  infrastructure  to 
promote  and  sell  their  products  to  UNFI’s  broad  customer  base  while  UNFI  customers  gain  access  to  an  even  broader 
assortment of unique and local items with flexible order sizes and the convenience of ordering from multiple sources online in 
one place.

Wholesale

In June 2023, we realigned our regional structure by consolidating from four operating regions to three. We now organize and 
operate our Wholesale reportable segment through three U.S. geographic regions: East, Central and West, each of which is led 
by  a  separate  regional  president  responsible  for  product  and  service  strategy,  execution,  and  financial  results;  and  Canada 
Wholesale,  which  is  operated  separately  from  the  U.S.  Wholesale  business.  Product  and  service  categories  include  grocery, 
fresh, private brands, wellness and personal care items, eCommerce, and foodservice. This operating structure includes regional 
sales  organizations  and  distribution  center  networks,  which  offer  a  combination  of  conventional  and  natural  products  to  our 
customers  as  a  consolidated  supply  solution.  Territory  managers  in  these  regions  sell  our  complete  lines  of  products,  which 
allows us to anticipate and identify sales opportunities that result from our customers having a single point of contact for all of 
our products and services.

Operations

We have established a national network of strategically located distribution centers utilizing a multi-tiered logistics system. The 
network includes facilities that carry slow turn or fast turn groceries, perishables, general merchandise and home, health and 
beauty  care  products.  For  financial  reporting  purposes,  sales  from  our  distribution  centers  to  our  own  Retail  stores  are 
eliminated from of our Wholesale segment within Eliminations.

We offer Wholesale customers a wide variety of food and non-food products, and our own lines of private label products. We 
also offer a broad array of professional services. As a logistics provider, efficiency is an important customer service measure. 
We are in the process of optimizing our facilities to implement leading warehouse technology, ranging from radio-frequency 
devices  guiding  selectors  to  mechanized  facilities  with  completely  automated  order  selection  for  dry  groceries  that  help  us 
deliver aisle-ready pallets to Wholesale customers. Deployment of continuous improvement methodologies within our supply 
chain  is  focused  on  delivering  labor  and  cost  efficiencies  while  also  improving  our  ability  to  more  effectively  service  our 
customers.

To maintain our market position and improve our operating efficiencies, we seek to continually:

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expand our marketing and customer service programs across regions;
expand our national purchasing opportunities;
offer a broader product and value add service selection than our competitors;
offer operational excellence with high service levels and a higher percentage of on-time deliveries and fill rates than 
our competitors;
centralize and streamline general and administrative functions to reduce expenses;
consolidate systems applications among physical locations and regions; and
invest in our people, facilities, equipment and technology.

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Procurement

We  maintain  contracts  with  suppliers  to  procure  their  products.  Our  procurement  process  includes  assessments  of  demand 
planning, pricing, seasonality and other factors. Inventory costs are determined when products are procured, and include vendor 
funds received and inbound freight, among other items. The gross margins we earn on sales to our customers are typically based 
on a percentage mark-up, or fee, on top of vendor listed base cost, which vary by customer, product type, vendor size, volume 
throughput, transportation methods and distances, among other factors. Net sales to customers are determined at the time of sale 
based on the then prevailing vendor listed base cost, and include discounts we offer to our customers. The differential between 
the procured cost, including vendor funds and inbound freight, as compared to the net sales price of these products, primarily 
generates our gross margin.

Acquisitions

A  key  component  of  our  historical  growth  has  been  to  acquire  distribution  companies  differentiated  by  product  offerings, 
service  offerings  and  market  area.  We  believe  the  expanded  product  and  service  offerings  from  these  acquisitions  have 
enhanced  and  will  continue  to  support  our  ability  to  acquire  new  customers  and  present  opportunities  for  cross-selling 
complementary product lines. Since our strategic $2.3 billion acquisition of conventional distributor, Supervalu, the Company 
has prioritized the integration of Supervalu and debt reduction and has not undertaken any additional material acquisitions. We 
may consider strategic acquisitions to enhance our capabilities and geographic footprint, when we determine that to be the most 
efficient use of capital.

Retail

Our Retail segment includes 78 Cub Foods and Shoppers retail grocery stores. Our retail stores provide an extensive grocery 
offering and, depending on size, a variety of additional products, including general merchandise, home, health and beauty care, 
and  pharmacy.  We  offer  national  and  local  brands,  as  well  as  our  own  private  label  products.  A  typical  retail  store  carries 
approximately 17,000 to 21,000 core SKUs and ranges in size from approximately 50,000 to 70,000 square feet. We believe our 
retail banners have strong local and regional brand recognition in the markets in which they operate. Our Retail operations are 
principally supplied by five of our Wholesale distribution centers. 

Our Product Offerings

Our  extensive  selection  of  products  includes  natural,  organic,  specialty,  produce,  and  conventional  grocery,  and  non-food 
products.  We  offer  nationally  recognized  brand  name  and  private  label  products,  including  grocery  (both  perishable  and 
nonperishable),  general  merchandise,  home,  health  and  beauty  care,  and  pharmacy,  which  are  sold  through  our  Wholesale 
segment  to  wholesale  customers  and  our  Retail  stores.  We  offer  the  following  main  product  categories:  grocery  and  general 
merchandise; perishables; frozen foods; wellness and personal care items; and bulk and foodservice products.

Our  owned  brands  portfolio  is  a  collection  of  brands  that  offer  high  quality  solutions  for  private  label  to  our  customers. 
ESSENTIAL  EVERYDAY®  is  our  leading  national  brand  equivalent  private  label  solution  with  nearly  2,500  items  for 
departments throughout the store. It is complemented by SHOPPERS VALUE®, which offers the budget conscious consumer 
quality  alternatives  to  national  brands.  Our  WILD  HARVEST®  brand  offers  a  full  range  of  products  made  with  simple, 
wholesome ingredients across multiple categories, including pet foods. Our Field Day® brand is primarily sold to natural store / 
co-op retailers as a private label solution. Our category-specific brands, primarily including STONE RIDGE CREAMERY®, 
EQUALINE®, and CULINARY CIRCLE®, also provide national brand equivalent products at a competitive price.

Our  Blue  Marble  Brands  portfolio  is  a  collection  of  national  brands  that  offer  United  States  Department  of  Agriculture 
(“USDA”) organic, non-GMO Project Verified, and specialty food and non-food items. The WOODSTOCK® brand has been 
pioneering organic / non-GMO products for over 35 years and continues to launch innovative products.

Our  subsidiary  doing  business  as  Woodstock  Farms  Manufacturing  specializes  in  importing,  roasting,  packaging  and 
distributing nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections for our customers and 
in the Company’s branded products. We operate an organic (USDA and Quality Assurance International (“QAI”)) and kosher 
(Circle  K)  certified  packaging,  roasting,  and  processing  facility  in  New  Jersey  that  is  SQF  (Safety  Quality  Food)  level  2 
certified. Woodstock Farms Manufacturing sells items manufactured in bulk and through private label packaging arrangements 
with large health food, supermarket and convenience store chains and independent retailers. 

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Our Service Offerings

Our Professional Services

We  offer  a  broad  array  of  professional  services  that  provide  Wholesale  customers  with  cost-effective  and  scalable  solutions. 
These services include pass-through programs in which vendors provide services directly to our Wholesale customers, as well 
as services and solutions we develop and provide directly. Our services include shelf and planogram management, retail store 
support, pricing strategy, electronic payments processing, advertising, couponing, store design, equipment sourcing, point-of-
sale hardware and software, network and data hosting solutions, consumer convenience services, eCommerce, automation tools, 
sustainability services and administrative back-office solutions. The sales and operating results for these services are included 
within Wholesale.

Our Marketing Services

We 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 that cater to a broad range of retail formats. Retail marketing programs 
offer  web  and  digital  marketing  services,  including  websites,  mobile  applications  and  eCommerce  capabilities;  circular 
programs  for  our  customers  and  vendors;  and  allow  our  suppliers  to  purchase  advertising  space  on  our  trailers.  Supplier 
marketing  programs  include  information  sharing  programs  designed  to  provide  heightened  transparency  to  suppliers  through 
demand planning, forecasting and procurement insights. All of our programs and services are designed to educate consumers, 
profile suppliers and increase sales for retailers, many of which do not have the resources necessary to conduct such marketing 
programs independently. Our goal is to provide support to ensure collective long-term success.

We continually seek customer and supplier feedback to ascertain their needs and allow us to better service them. We also offer 
our customers:

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trends reports in the natural and organic industry:
product data information such as best seller lists, store usage reports and catalogs;
assistance with store layout designs, new store design and equipment procurement;
planogramming, shelf and category management support;
in-store signage and promotional materials, and assistance with product display planning and set up;
shelf tags for products; and
a robust retailer portal with product information, search and ordering capabilities, reports and publications.

Our Suppliers

We  purchase  our  products  from  nearly  11,000  suppliers.  The  majority  of  our  suppliers  are  based  in  the  United  States  and 
Canada, but we also source products from suppliers throughout the world. We believe suppliers seek to distribute their products 
through us because we provide access to a large 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 our 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  supply  source  for  any  product  category.  In  addition,  although  we  have  exclusive  distribution 
arrangements  and  support  programs  with  several  suppliers,  none  of  our  suppliers  accounted  for  more  than  5%  of  our  total 
purchases in fiscal 2023.

We have positioned ourselves as one of the largest purchasers of organically grown bulk products in the natural and organic 
products industry by centralizing 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  volume  and  other  considerations  that  may  include  discounted  pricing  or  prompt 
payment discounts. Furthermore, some of our purchase arrangements include the right of return to the supplier with respect to 
products that we do not sell in a specified period of time. Each region is responsible 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 in our company-wide 
purchasing programs. 

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Our Distribution Network

Logistics

We select the sites for our distribution centers to provide direct access to the markets we serve and configure them to minimize 
total operating costs. This proximity allows us to reduce our transportation costs relative to those of our competitors that seek to 
service these customers from locations that are often further away. We believe that we incur lower inbound freight expense than 
our regional competitors because our scale allows us to buy full and partial truckloads of products. Products are delivered to our 
distribution  centers  primarily  by  our  fleet  of  leased  and  owned  trucks,  contract  carriers  and  the  suppliers  themselves.  When 
financially advantageous, we pick up products from suppliers or satellite staging facilities and return them to our distribution 
centers using our own trucks. Additionally, the scale of our distribution network provides us with the flexibility to shift volume 
amongst distribution centers in the case of volume spikes, unique customer needs, temporary inbound fill rate challenges and 
weather-related events as well as the capacity to support future sales growth.

The  majority  of  our  trucks  are  leased  and  are  maintained  by  third-party  national  leasing  companies,  which  in  some  cases 
maintain facilities on our premises for the maintenance and service of these vehicles. We also have facilities where we operate 
our own maintenance shops.

We  ship  certain  orders  for  supplements  or  for  items  that  are  destined  for  areas  outside  of  regular  delivery  routes  through 
independent  carriers.  Deliveries  to  areas  outside  the  continental  United  States  and  Canada  are  typically  shipped  by  freight-
forwarders through ocean-going containers.

Organic Certification

Our  “Certified  Organic  Distributor”  certification  covers  26  of  our  distribution  centers  in  the  United  States.  Although  not 
designated as a “Certified Organic Distributor” by QAI, two of our California locations are certified as Organic by the State of 
California Department of Public Health Food and Drug Branch, and another California location is currently registered with the 
California  Department  of  Food  and  Agriculture  Organic  Program  as  an  organic  handler.  In  addition,  our  two  Canadian 
distribution centers in British Columbia and Ontario each hold an organic distributor certification from QAI.

We  maintain  a  comprehensive  quality  assurance  program.  All  of  the  products  we  sell  that  are  represented  as  “organic”  are 
required  to  be  certified  as  such  by  an  independent  third-party  agency.  We  maintain  current  certification  affidavits  on  most 
organic commodities and produce in order to verify the authenticity of the product. Most potential suppliers of organic products 
are required to provide such third-party certifications to us before they are approved as suppliers.

Our Technology Investments

We continue to make significant investments in distribution, financial, information and warehouse management systems. We 
continually evaluate and upgrade our systems to enhance efficiency, cost-effectiveness and responsiveness to customer needs. 
We  believe  these  systems  include  best  in  class  functionality  in  warehouse  management  systems,  inventory  control,  labor 
management, scan-based fulfillment applications, mechanized pick-to-light systems and order management systems. We are in 
the process of updating our fulfillment technology with Universal Product Code (“UPC”) scan-based technology for selection, 
loading and customer deliveries to ensure order accuracy throughout the supply chain. We have also begun to make significant 
investments in warehouse automation solutions to support full case and unit pick fulfillment processes. These investments are 
intended to unlock our supply chain capabilities, improve customer experience and enable growth. We continue to leverage a 
management information system that enables us to lower inbound transportation costs by making optimum use of our own fleet 
of  trucks  and/or  by  consolidating  deliveries  to  achieve  full  truckloads.  In  addition,  route  efficiency  software  assists  us  in 
developing the most efficient routes for our outbound trucks. As part of our “one company” approach, we continue an effort to 
standardize to best in industry software solutions for inventory procurement, order management, transportation operations and 
warehouse  management  systems  throughout  our  network.  Our  investment  in  technology  is  intended  to  improve  our  supply 
chain effectiveness for our suppliers, associates and customers enabling our collective success. 

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Competition

Our Wholesale and Retail businesses operate in a highly competitive and rapidly evolving industry, which is characterized by 
low profit margins, new business models and the entry of new, well-funded competitors that intensify competition. Our food 
distribution business competes with many traditional and specialty grocery wholesalers and retailers that maintain or develop 
self-distribution  systems  for  the  business  of  independent  grocery  retailers.  We  also  increasingly  compete  with  deep  discount 
retailers,  limited  assortment  stores,  wholesale  membership  clubs,  and  eCommerce  and  other  internet-based  businesses.  The 
primary  competitive  factors  in  the  Wholesale  business  include  price,  service  level,  product  quality,  variety,  availability  and 
other  value-added  services.  In  recent  years,  consolidation  within  the  grocery  industry  has  resulted  in,  and  is  expected  to 
continue to result in, increased competition, including from some competitors that have greater financial, marketing and other 
resources than we do.

Independent retailers and smaller Chain customers represent a significant portion of our business and face intense competition 
from brick and mortar, eCommerce, and omni-channel retailers operating discount, department, retail and wholesale grocers, 
drug,  dollar,  variety  and  specialty  stores,  supermarkets,  hypermarkets  and  supercenter-type  stores,  and  social  commerce 
platforms, as well as companies that offer services in digital advertising, fulfillment and delivery services, health and wellness 
and financial services.

Our  retail  banners  compete  with  traditional  grocery  stores,  supercenters,  deep  discounters,  mass  merchandisers,  limited 
assortment stores and eCommerce providers. The principal competitive factors in grocery retail include the location and image 
of  the  store;  the  price,  quality,  and  variety  of  the  fresh  offering;  and  the  quality,  convenience,  and  consistency  of  service. 
Competitive strategies vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing, and sales 
focus. Our retail stores have continued to respond to growing competition from online and non-traditional retailers by adding 
options and services such as online ordering, curbside pick-up and home delivery.

Government Regulation

Our  operations  and  many  of  the  products  that  we  distribute  in  the  United  States  are  subject  to  regulation  by  state  and  local 
health  departments,  the  USDA  and  the  United  States  Food  and  Drug  Administration  (the  “FDA”),  which  generally  impose 
standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation. In the United 
States, our facilities generally are inspected at least once annually by state or federal authorities. For certain product lines, we 
are  also  subject  to  the  Federal  Meat  Inspection  Act,  the  Poultry  Products  Inspection  Act,  the  Perishable  Agricultural 
Commodities Act, the Packers and Stockyard Act and regulations promulgated by the USDA to interpret and implement these 
statutory  provisions.  The  USDA  imposes  standards  for  product  safety,  quality  and  sanitation  through  the  federal  meat  and 
poultry inspection program.

The FDA Food Safety Modernization Act in the United States and the Safe Foods for Canadians Act in Canada have expanded 
food  safety  requirements  across  the  food  supply  chain  and,  among  other  things,  impose  additional  regulations  focused  on 
prevention  of  food  contamination,  more  frequent  inspection  of  high-risk  facilities,  increased  record-keeping,  and  improved 
tracing of food. Products that do not meet regulatory standards and/or comply with these regulations may be considered to be 
adulterated and/or misbranded and subject to recall.

The  Surface  Transportation  Board  and  the  Federal  Highway  Administration  regulate  our  trucking  operations.  In  addition, 
interstate  motor  carrier  operations  are  subject  to  safety  requirements  prescribed  by  the  United  States  Department  of 
Transportation  and  other  relevant  federal  and  state  agencies.  Such  matters  as  weight  and  dimension  of  equipment  are  also 
subject to federal and state regulations.

Our facilities are subject to regulations issued pursuant to the U.S. Occupational Safety and Health Act by the U.S. Department 
of  Labor  and  similar  regulations  by  state  agencies.  These  regulations  require  us  to  comply  with  certain  health  and  safety 
standards to protect our employees from recognized hazards. We are also subject to the National Labor Relations Act, which 
provides  employees  the  right  to  organize  and  bargain  collectively  with  their  employer  and  to  engage  in  other  protected 
concerted activity; and the Fair Labor Standards Act, which establishes minimum wages and overtime standards, among other 
requirements.

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Our  facilities  in  the  United  States  and  in  Canada  are  subject  to  various  environmental  protection  statutes  and  regulations, 
including  those  relating  to  the  use  of  water  resources  and  the  discharge  of  wastewater.  Further,  many  of  our  distribution 
facilities have ammonia-based refrigeration systems and tanks for the storage of diesel fuel, hydrogen fuel and other petroleum 
products which are subject to laws regulating such systems and storage tanks. Moreover, in some of our facilities we, or third 
parties  with  whom  we  contract,  perform  vehicle  maintenance.  Our  policy  is  to  comply  with  all  applicable  federal,  state, 
provincial and local provisions relating to the protection of the environment or the discharge of materials. 

Our international business operations are subject to various laws and regulations regarding the import and export of products 
and preventing corruption and bribery (including the US Foreign Corrupt Practices Act). We have implemented and continue to 
develop import/export and anti-corruption compliance programs and processes to comply with applicable laws and regulations 
governing our international business activities.

Human Capital Management

Our employees are critical to supporting our values and achieving our strategic vision, and we are striving to be an employer of 
choice. We are focused on associate engagement, empowerment and safety to foster innovation and bring best-in-class solutions 
to our customers and suppliers in an ever-changing retail landscape, including new ways of work scheduling and productivity 
investments. The Compensation Committee of our Board of Directors has oversight of human capital management matters with 
a focus on associate wellbeing across a variety of measures. 

As of July 29, 2023, we had approximately 29,455 full and part-time employees within continuing operations, 10,667 of whom 
(approximately 36%) are covered by 49 collective bargaining agreements, including agreements under renegotiation. We have 
in the past been the focus of union-organizing efforts, and we believe it is likely that we will be the focus of similar efforts in 
the future.

Developing Talent

Attracting  and  retaining  talent  is  one  of  our  top  priorities.  Our  goal  is  to  differentiate  ourselves  in  the  market  by  offering 
unprecedented flexibility to associates in the way, when and how they work. To reduce turnover, we have an emphasized focus 
on  and  commitment  to  our  associates,  their  experiences  as  well  as  their  continued  engagement.  We  are  committed  to  the 
continued support and development of our associates and provide access to robust leadership development programming, role-
based training and other career development opportunities at every stage of an associate’s tenure with us. Designed to enhance 
the  leadership  capabilities  of  our  people,  we  design  and  deliver  optional  programs  to  leaders  across  all  departments  to  come 
together to learn and practice their management skills as well as identify opportunities to lead more effectively. The Elevate 
program  for  Director-level  and  above  associates  works  to  solidify  our  talent  pipeline  and  promote  the  success  of  the 
organization’s  future  leaders.  Our  Learning  &  Development  teams  partner  with  key  groups  such  as  Sales,  Operations, 
Transportation and Environmental Health & Safety to develop role-based training to drive greater productivity and safety. We 
also offer associates additional learning and career development opportunities that extend from skills-based training deployed 
electronically through our BetterU learning system, to mentorship programs and career development discussions and beyond.

Compensation and Benefits

Our compensation and benefits programs are designed to promote a culture of wellbeing and recognize our associates for their 
outstanding achievements and dedication to serving our customers and keeping them safe during even the most challenging of 
times. We are committed to offering market competitive pay programs that reward high levels of performance and behaviors 
that challenge convention and drive company success. Our short-term incentive programs are tied to the Company’s financial 
goals  and  are  intended  to  align  our  eligible  associates’  rewards  with  our  financial  success.  Long-term  incentives,  including 
restricted stock units and performance stock unit awards, are designed to attract and retain innovative leaders and align their 
financial interests with that of our shareholders and other stakeholders. As part of our commitment to recognize our associates’ 
“whole self” – health, finances and overall wellbeing – we offer a comprehensive health and welfare benefit program to eligible 
associates providing a variety of medical, dental and vision options plus additional voluntary benefits like long-term disability 
and optional life insurance. Additionally, we provide to eligible associates a leading edge, no-cost wellness program, paid time 
off programs including paid parental leave, an employee assistance program, 401(k) plan, a back-up childcare program, and a 
recently enhanced education assistance program.

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Diversity, Equity and Inclusion

We pledge to promote equity, celebrate diversity and support justice and inclusion for all. Our Board of Directors is diverse in 
gender  and  ethnic  background,  as  well  as  having  a  broad  range  of  experience,  with  four  out  of  11  directors  identifying  as 
female, two members identifying as African American, one member identifying as Asian American, one member identifying as 
LGBTQ+ and two members identifying as veterans. We recognize that innovation thrives when there is unity and respect for 
diverse backgrounds and perspectives. Additionally, we aim to foster a culture of belonging, equity and empathy through open 
dialogues,  educational  opportunities  and  by  honoring  the  experiences  and  special  events  that  speak  to  our  associates’  many 
identities. 

We  built  a  Diversity,  Equity  and  Inclusion  (“DEI”)  team,  and  our  DEI  strategy  is  built  on  a  foundation  of  research,  best 
practices  and  leadership  commitment.  Our  Vice  President  of  Diversity,  Inclusion,  Equity  and  Wellbeing  oversees  our  DEI 
efforts, inclusive procurement initiatives and wellbeing programs. Our diversity council and seven associate-led Belonging & 
Innovation Groups actively strive to create a workplace where all associates feel welcome and are motivated to reach their full 
potential. We developed a multi-pronged approach to educate and engage associates that includes open discussions on various 
dimensions of diversity, a podcast, DEI trainings on our associate platforms, targeted volunteerism, and campaigns encouraging 
respect and empathy.

Creating a Safe Environment

Safety is at the forefront of everything we do. We continue to focus on the safety of our associates, customers and communities 
with increased safety measures. We continue to be committed to continuous learning and improvement, and we believe in the 
power of learning from past experiences to enhance our safety system and performance, including through root cause incident 
analysis. We also continue to invest in our safety brand and pledge, Every Moment Matters, which is designed to foster a caring 
culture,  the  implementation  of  interactive  and  proven  training  programs,  which  were  rolled  out  across  our  network,  and 
enhanced safety auditing. 

This past year, we focused on creating an audit ready everyday culture; improving our audit scores, sanitation practices, and 
overall customer satisfaction. During fiscal 2023, we added additional data analytic tools to continuously monitor and report on 
fleet  safety  performance  metrics.  We  integrated  new  safety  performance  dashboards  that  allow  management  to  monitor  fleet 
safety metrics at the corporate, regional, and individual site level. These tools allow us to better identify and respond to unsafe 
driving behaviors and recognize drivers who demonstrate safe driving habits.

Seasonality

Overall product sales are fairly balanced throughout the year, although demand for certain products of a seasonal nature may be 
influenced by holidays, changes in seasons or other annual events. Our working capital needs are generally greater during the 
months of and leading up to high sales periods, such as the buildup in inventory leading to the calendar year-end holidays. Our 
inventory, accounts payable and accounts receivable levels may be impacted by macroeconomic impacts and changes in food-
at-home purchasing rates. These effects can result in normal operating fluctuations in working capital balances, which in turn 
can result in changes to cash flow from operations that are not necessarily indicative of long-term operating trends.

Available Information

Our internet address is http://www.unfi.com. The contents of our website are not incorporated by reference into or considered to 
be part of this Annual Report, and our internet address is included in this document as an inactive textual reference only. We 
make our Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports 
filed or furnished pursuant to Section 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 as reasonably practicable after we file such reports with, or furnish such 
reports to, the Securities and Exchange Commission.

ITEM 1A.    RISK FACTORS

Our  business,  financial  condition  and  results  of  operations  are  subject  to  various  risks  and  uncertainties,  including  those 
described below and elsewhere in this Annual Report. This section discusses factors that, individually or in the aggregate, we 
believe could cause our actual results to differ materially from expected and historical results. If any of the events described 
below  occurs,  our  business,  financial  condition  or  results  of  operations  could  be  materially  adversely  affected  and  our  stock 
price could decline.

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We  provide  these  factors  for  investors  as  permitted  by  and  to  obtain  the  rights  and  protections  under  the  Private  Securities 
Litigation  Reform  Act  of  1995.  You  should  understand  that  it  is  not  possible  to  predict  or  identify  all  such  factors. 
Consequently,  you  should  not  consider  the  following  to  be  a  complete  discussion  of  all  potential  risks  or  uncertainties 
applicable  to  our  business.  See  Management’s  Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations—
Cautionary Note Regarding Forward-Looking Statements in Part II, Item 7 of this Annual Report for more information on our 
business and the forward-looking statements included in this Annual Report.

Strategic and Operational Risks

A significant portion of our revenues are from our principal customers, and our success is heavily dependent on retaining 
this business and on our principal customers’ ability to maintain and grow their businesses.

A significant portion of our revenues is from our principal customers, and our success is heavily dependent on retaining this 
business  and  on  our  principal  customers’  ability  to  maintain  and  grow  their  businesses.  The  loss  or  cancellation  of  business 
from  our  principal  customers,  including  due  to  the  utilization  of  alternative  sources  of  products,  whether  through  other 
distributors or increased self-distribution, closures of stores, reductions in the amount of products that our customers sell to their 
customers, operational issues or our failure to comply with the terms of our distribution agreements, where applicable, could 
materially and adversely affect our business, financial condition or results of operations. For example, Whole Foods Market, a 
subsidiary  of  Amazon.com,  Inc.,  accounted  for  approximately  21%  of  our  Net  sales  in  fiscal  2023.  We  serve  as  the  primary 
distributor  of  natural,  organic,  and  specialty  non-perishable  products,  and  also  distribute  certain  specialty  protein,  cheese, 
culinary  items,  deli  items  and  products  from  health,  beauty  and  supplement  categories  to  Whole  Foods  Market  in  all  of  its 
regions in the United States under the terms of our distribution agreement, which expires on September 27, 2027. Our ability to 
maintain a close, mutually beneficial relationship with our principal customers is an important element to our continued growth. 
Similarly, if our largest customer diverts purchases from us beyond the minimum amounts it is required to purchase under our 
distribution agreement, our business, financial condition or results of operations may be materially and adversely affected. 

Our  business  is  characterized  by  low  margins,  which  are  sensitive  to  inflationary  and  deflationary  pressures,  and  intense 
competition  and  consolidation  in  the  grocery  industry,  and  our  inability  to  maintain  or  increase  our  operating  margins 
could adversely affect our results of operations.

The grocery industry is characterized by a relatively high volume of sales with relatively low profit margins, and as competition 
in  certain  areas  intensifies  and  the  industry  continues  to  consolidate,  our  results  of  operations  may  be  negatively  impacted 
through a loss of sales and reduction in gross margin dollars. The grocery business is intensely competitive and the landscape is 
dynamic and continues to evolve, including from some competitors that have greater financial and other resources than we do. 
Consumers  also  have  more  choices  for  grocery  and  consumable  purchases,  including  mass  merchandisers,  eCommerce 
providers,  deep  discount  retailers,  limited  assortment  stores,  wholesale  membership  clubs  and  meal-delivery  services,  which 
may  reduce  the  demand  for  products  supplied  by  our  wholesale  customers.  The  pandemic  accelerated  the  consumer  shift  to 
eCommerce  and  new  ways  to  purchase  food,  including  increased  restaurant  and  other  delivery  options.  We  cannot  provide 
assurance that we will be able to compete effectively against current and future competitors.

Our  ability  to  compete  successfully  will  be  largely  dependent  on  our  ability  to  provide  quality  products  and  services  at 
competitive  prices.  Our  competition  comes  from  a  variety  of  sources,  including  other  distributors,  as  well  as  specialty  or 
independent  grocery  and  mass  market  grocery  distributors  and  cooperatives,  and  customers  with  their  own  distribution 
channels. Mass market grocery distributors, many with substantially greater financial and other resources than us and that may 
be better established in their markets, continue to increase their offerings of natural and organic products, are competing more 
directly with our natural and organic product offerings. While natural and organic products typically generate higher margins, 
these margins could be affected by changes in the public’s perception of the benefits of natural and organic products compared 
to similar conventional products.

In addition, many supermarket chains have increased self-distribution or purchases of items directly from suppliers. Relatively 
low barriers to entry have resulted in new entrants in our markets. We also encounter indirect competition as a result of the fact 
that  our  customers  with  physical  locations  compete  with  online  retailers  and  distributors  that  seek  to  sell  certain  products 
directly to consumers. Further, club stores, commercial wholesale outlets, direct food wholesalers and online food retailers have 
developed  lower  cost  structures,  creating  increased  pressure  on  the  industry’s  profit  margins.  We  cannot  assure  you  that  our 
current or potential future competitors will not provide products or services comparable or superior to those provided by us or 
adapt more quickly than we do to evolving industry trends or changing market requirements. It is also possible that alliances 
among competitors may develop and that competitors may rapidly acquire significant market share. Increased competition may 
result  in  price  reductions,  reduced  gross  margins,  lost  business  and  loss  of  market  share,  any  of  which  could  materially  and 
adversely affect our business, financial condition or results of operations.

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The continuing consolidation of retailers, the growth of chains and closures of grocery locations may reduce our gross margins 
in  the  future  should  more  customers  qualify  for  greater  volume  discounts,  and  should  we  experience  pricing  pressure  from 
suppliers  and  retailers.  Sales  to  some  of  our  largest  customers  generate  a  lower  gross  margin  than  do  sales  to  our  smaller 
customers  due  to  agreements  that  include  volume  discounts  with  many  of  these  customers,  including  our  largest  customer. 
Increased  sales  to  these  customers  results  in  downward  pressure  on  our  gross  margins,  which  may  or  may  not  be  offset  by 
increases in sales or a reduction in expenses incurred to service these customers.

If we are not able to capture scale efficiencies and enhance our merchandise offerings, we may not be able to achieve our goals 
with respect to operating margins. In addition, if we are not able to refine and improve our systems continually or effectively 
implement  improvements  to  our  systems  without  disruption,  including  any  information  technology  migration  to  a  cloud 
environment, we may not be able to reduce costs, increase sales and services, effectively manage inventory and procurement 
processes, or effectively manage customer pricing plans. As a result, our operating margins may stagnate or further decline.

Further, because many of our sales are at prices that are based on our product cost plus a percentage markup, volatile food costs 
have a direct impact upon our profitability. We have experienced elevated levels of inflation during the past few years, which 
has had varying impacts on our business. Prolonged periods of product cost inflation and periods of rapidly increasing inflation 
may have a negative impact on our profit margins and results of operations to the extent that we are unable to pass on all or a 
portion of such product cost increases to our customers, or to the extent our operating expenses increase. In addition, product 
cost  inflation  may  negatively  impact  the  consumer  discretionary  spending  trends  and  reduce  the  demand  for  higher-margin 
natural  and  organic  products,  which  could  adversely  affect  profitability.  Conversely,  our  profit  levels  may  be  negatively 
impacted during periods of slowing inflation or product cost deflation even though our Gross profit as a percentage of Net sales 
may remain relatively constant. If we are unable to reduce our expenses as a percentage of Net sales, including our expenses 
related  to  servicing  this  lower  gross  margin  business,  our  business,  financial  condition,  or  results  of  operations  could  be 
materially and adversely impacted.

We may not realize the anticipated benefits of our transformation initiatives.

Our  long-term  strategy  includes  transforming  our  business,  particularly  the  areas  of  network  automation  and  optimization, 
which  is  designed  to  make  our  distribution  network  more  efficient  and  improve  the  customer  experience;  commercial  value 
creation, which is aimed at generating more profitable revenue growth through simplified pricing and procurement, as well as 
enhancing  analytical  insights  for  customers  and  suppliers;  digital  offering  enhancement,  which  is  intended  to  enhance  the 
functionality of our digital commercial platforms, including through the use of artificial intelligence and machine learning; and 
infrastructure  unification  and  modernization,  which  is  intended  to  upgrade  and  simplify  our  digital  infrastructure.  The 
successful design, implementation and management of these initiatives may present significant challenges, many of which are 
beyond our control. In addition, the initiatives may not advance our business strategy as expected. We may not realize all or any 
of  the  anticipated  benefits,  or  may  not  realize  the  anticipated  benefits  within  the  expected  time  frame,  due  to  financial  or 
operational  challenges,  delays,  lower  than  expected  levels  of  customer  and  supplier  acceptance  and  implementation,  or 
unexpected costs. Any failure to implement the initiatives in accordance with expectations could adversely affect our ability to 
achieve  the  anticipated  revenue  and  profitability  benefits.  In  addition,  the  complexity  of  the  initiatives  requires  a  substantial 
amount  of  management  and  operational  resources.  Our  management  team  must  successfully  implement  operational  changes 
necessary  to  achieve  the  anticipated  benefits  of  the  initiatives.  These  and  related  demands  on  its  resources  may  divert  the 
Company’s attention from existing core businesses and could also have adverse effects on existing business relationships with 
suppliers and customers. As a result, our business, financial condition or results of operations may be adversely affected.

Changes in relationships with our suppliers may adversely affect our profitability, and conditions beyond our control can 
interrupt our supplies and alter our product costs.

As a wholesaler, we are dependent upon the consistent supply of products from manufacturers. We maintain supply contracts to 
fulfill product sales obligations to our customers. Manufacturers’ disruptions in their ability to produce, maintain and supply 
product based on changing levels of demand could result in an inability to fulfill our obligations to our customers. 

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The majority of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout 
the world. For the most part, we do not have long-term contracts with our suppliers committing them to provide products to us. 
Although our purchasing volume can provide benefits, suppliers may not provide the products needed by us in the quantities or 
at  the  prices  requested.  For  example,  we  experienced  higher  than  usual  levels  of  out-of-stocks  leading  to  reduced  fill  rates 
during  the  COVID-19  pandemic.  These  shortages  caused  us  to  incur  higher  operating  expenses  due  to  the  cost  of  moving 
products between our distribution facilities to maintain expected service levels, and we cannot anticipate whether this trend will 
recur in the future. We are also subject to delays caused by interruption in production and increases in product costs based on 
conditions 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, unavailability of fuel or increases in fuel costs, competitive demands, raw material 
shortages, geopolitical disruptions and natural disasters or other catastrophic events (including, but not limited to food-borne 
illnesses). As the consumer demand for natural and organic products has increased, certain retailers and other producers have 
entered the market and attempted to buy certain raw materials directly, limiting availability for use in certain of our suppliers’ 
products.  In  addition,  increased  costs  of  imported  goods,  including  due  to  tariffs,  global  conflict  or  otherwise,  may  reduce 
customer demand for affected products if the parties experiencing those increased costs increase their prices.

We cooperatively engage in a variety of promotional programs with our suppliers. We manage these programs to maintain or 
improve our margins and increase sales. We experienced a reduction in promotional spending and payment of slotting fees for 
new products by our suppliers as a result of the COVID-19 pandemic, and we may experience further reductions or changes in 
promotional  spending  (including  as  a  result  of  increased  demand  for  natural  and  organic  products),  which  could  have  a 
significant  impact  on  our  profitability.  We  depend  heavily  on  our  ability  to  purchase  merchandise  in  sufficient  quantities  at 
competitive prices, and we benefit from our ability to purchase product in advance of price increases. We have no assurances of 
continued  supply,  pricing  or  access  to  new  products  and  suppliers  could  change  the  terms  upon  which  they  sell  to  us  or 
discontinue selling to us.

Further,  increased  frequency  or  duration  of  extreme  weather  conditions,  or  other  factors  which  may  be  the  result  of  climate 
change, also could impair production capabilities, disrupt our supply chain, or impact demand for our products. For example, in 
the past, weather patterns or events, such as lower than average levels of precipitation in key agricultural states or wildfires in 
the West, have affected prices of food products of certain of our suppliers. Input costs could increase at any time for a large 
portion of the products that we sell for a prolonged period. Conversely, weather patterns could lead to a decline in our product 
costs (for example, if rainfall levels are abundant), particularly in our perishable and produce businesses, and this product cost 
deflation could negatively impact our results of operations. Our inability to obtain adequate products as a result of any of the 
foregoing factors or otherwise could prevent us from fulfilling our obligations to customers, and these customers may turn to 
other  distributors.  In  that  case,  our  business,  financial  condition  or  results  of  operations  could  be  materially  and  adversely 
affected.

Failure  by  us  to  develop  and  operate  a  reliable  technology  platform  and  the  costs  of  maintaining  secure  and  effective 
information technology systems could negatively impact our business, and we may not realize the anticipated benefits of our 
investments in information technology.

Our  ability  to  decrease  costs  and  increase  profits,  as  well  as  our  ability  to  serve  customers  most  effectively,  depends  on  the 
reliability  of  our  technology  platform.  We  use  software  and  other  technology  systems,  among  other  things,  to  send,  receive, 
generate and select orders, load and route trucks and monitor and manage our business on a day-to-day basis. Failure to have 
adequate  technology  systems  across  the  enterprise  and  any  disruption  to  these  systems  could  adversely  impact  our  customer 
service, decrease the volume of our business, and result in increased costs negatively affecting our business, financial condition 
or results of operations.

In our attempt to reduce operating expenses, increase operating efficiencies and better serve our customers and suppliers, we 
have  invested  and  continue  to  invest  in  the  development  and  implementation  of  new  information  technology.  We  are  in  the 
process  of  converting  our  existing  facilities  into  a  single  warehouse  management  and  supply  chain  platform.  In  addition,  we 
remain focused on the automation of certain distribution centers and plan to develop further digital solutions for our customers, 
suppliers and associates. We may not be able to implement these technological enhancements at all or in the anticipated time 
frame  and  delays  in  implementation  could  negatively  impact  our  business,  financial  condition  or  results  of  operations.  In 
addition, the costs may exceed our estimates and are expected to exceed the benefits during the early stages of implementation. 
Even  if  implementation  progresses  in  accordance  with  our  current  plans,  and  within  our  current  cost  estimates,  we  may  not 
achieve the expected efficiencies and cost savings from our investments. Moreover, as we implement information technology 
enhancements,  disruptions  in  our  business  may  be  created  (including  disruption  with  our  customers),  which  may  have  a 
material adverse effect on our business, financial condition or results of operations.

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We face risks related to the availability of qualified labor, labor costs and labor relations.

In  the  past,  we  have  experienced  a  shortage  of  qualified  labor.  Recruiting  and  retention  efforts,  and  actions  to  increase 
productivity, may not be successful. Such a shortage could potentially increase labor costs, reduce profitability or decrease our 
ability  to  effectively  serve  customers.  If  we  are  unable  to  realize  the  anticipated  benefits  of  our  efforts  to  improve  labor 
efficiency,  including  through  automation  and  other  technology  initiatives,  or  to  increase  productivity  and  efficiency  through 
other methods, including as a result of delays in executing our business transformation and integration efforts, we may be more 
susceptible  to  labor  shortages  than  our  competitors.  We  have  incurred  increased  costs  to  retain  and  address  a  shortage  of 
qualified labor in certain geographies, particularly for warehouse workers and drivers, including wage actions, sign-on bonus 
programs, and increased use of third-party labor.

Because our labor costs are, as a percentage of net sales, higher than in many other industries, we may be significantly harmed 
by  labor  cost  increases.  Further,  if  we  are  unable  to  accurately  predict  and  adjust  our  labor  needs  with  respect  to  our  sales 
volume,  our  cost  of  labor  as  a  percentage  of  net  sales  may  increase.  In  addition,  labor  is  a  significant  cost  of  many  of  our 
wholesale  customers.  Any  increase  in  their  labor  costs,  including  any  increases  in  costs  as  a  result  of  increases  in  minimum 
wage requirements or wage competition, could reduce the profitability of our customers and reduce demand for the products we 
supply. Additionally, the terms of some of our collective bargaining agreements may limit our ability to increase efficiencies.

As  of  July  29,  2023,  approximately  10,667  of  our  29,455  employees  (approximately  36%)  were  covered  by  49  collective 
bargaining  agreements,  including  agreements  under  negotiation,  which  expire  through  May  31,  2027.  In  the  event  we  are 
unable to negotiate reasonable contract renewals with our union associates or are required to make significant changes to terms 
that are unfavorable to us, our relationship with employees may become fractured, and we could be subject to work stoppages 
or  additional  expenses.  In  that  event,  it  would  be  necessary  for  us  to  hire  replacement  workers  or  implement  other  business 
continuity  contingency  plans  to  continue  to  meet  our  obligations  to  our  customers.  The  costs  to  hire  replacement  workers, 
employ effective security measures, and, if necessary, serve customers from alternative facilities, could negatively impact the 
profitability  of  any  affected  facility.  Depending  on  the  length  of  time  of  any  work  stoppage  or  if  we  are  required  to  employ 
replacement workers and implement security measures these costs could be significant and could have a material adverse effect 
on our business, financial condition or results of operations.

We have in the past been the focus of union-organizing efforts, and we believe it is likely 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  increased  or  expanded  union-organizing  efforts.  New  contracts  with  existing  unions  could 
have substantially less favorable terms than those negotiated prior to such expanded union-organizing efforts.

We  have  engaged,  and  may  continue  to  engage  in,  acquisitions  and  may  encounter  difficulties  integrating  acquired 
businesses and may not realize the anticipated benefits of our acquisitions.

We have engaged in, and could continue to pursue, strategic transactions as we transform our business. Acquisitions present 
significant challenges and risks relating to the integration of acquired businesses.

Our  ability  to  achieve  the  expected  benefits  of  acquisitions  will  depend  on,  among  other  things,  our  ability  to  effectively 
execute  on  our  business  strategies,  integrate  and  manage  the  combined  operations,  retain  customers  and  suppliers  on  terms 
similar to those in place with the acquired businesses, achieve desired operating efficiencies and sales growth, optimize delivery 
routes,  coordinate  administrative  and  distribution  functions,  integrate  management  information  systems,  expand  into  new 
markets to include markets of the acquired business, retain and assimilate the acquired businesses’ employees, and maintain our 
financial and internal controls and systems as we expand our operations. Achieving the anticipated benefits of acquisitions also 
depends  on  the  adequacy  of  our  implementation  plans  and  the  ability  of  management  to  oversee  and  operate  effectively  the 
combined operations.

The  integration  of  businesses  that  we  acquire  might  also  cause  us  to  incur  unforeseen  costs,  which  would  lower  our  future 
earnings and would prevent us from realizing the expected benefits of these acquisitions. Any businesses we acquire may also 
have liabilities or adverse operating issues, including some that are not known by us before the acquisition, and our indemnity 
for such liabilities may be limited or nonexistent. 

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Additionally, our ability to pursue any future acquisitions may depend upon obtaining additional financing, which may not be 
available  on  acceptable  terms  or  at  all.  To  the  extent  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  our  ability  to  complete  acquisitions.  If  we  are 
unable  to  integrate  acquired  businesses  successfully  or  to  realize  anticipated  economic,  operational  or  other  benefits  and 
synergies  in  a  timely  manner,  management’s  resources  could  be  diverted  and  our  business,  financial  condition,  or  operating 
results could be materially and adversely affected, particularly in transition periods immediately following the consummation of 
those transactions. 

We may have difficulty managing our growth, and our growth plans may not produce the results that we expect.

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.  Our  future  growth  may  be  limited  by  strong  growth  by  certain  of  our  largest  customers  or  our  inability  to 
optimize our network of distribution centers to serve our customers, retain existing customers, successfully integrate acquired 
entities  or  significant  new  customers,  implement  information  systems  and  automation  initiatives,  or  adequately  manage  our 
personnel.

If we fail to optimize the volume of supply operations in our distribution center network, do not retain existing business or do 
not utilize added network capacity in line with our expectations, excess capacity may exist, which may lead to inefficiencies 
and adversely affect our business, financial condition or results of operations, including as a result of incurring operating costs 
for these facilities without sufficient corresponding sales revenue to cover these costs.

We  cannot  assure  you  that  we  will  be  able  to  successfully  optimize  our  distribution  center  network  or  open  additional 
distribution centers in new or existing markets if needed to accommodate or facilitate growth or that certain of our distribution 
centers will not have, or continue not to have, operational challenges. Our ability to compete effectively, maintain service levels 
and manage future growth, if any, will depend on our ability to maximize operational efficiencies across our distribution center 
network,  to  implement  and  improve  on  a  timely  basis  operational,  financial  and  management  information  systems,  including 
our warehouse management systems, and to expand, train, motivate and manage our work force. We cannot assure you that our 
existing  personnel,  systems,  procedures  and  controls  will  be  adequate  to  support  the  future  growth  of  our  operations.  In 
addition, we have recently appointed several new executive leaders, and these transitions may be disruptive. Our inability to 
manage our growth effectively could have a material adverse effect on our business, financial condition or results of operations.

Further, a key element of our current growth strategy is to increase the amount of fresh, perishable products that we distribute. 
We believe that the ability to distribute these products will differentiate us from our competitors and increase demand for our 
products.  If  we  are  unable  to  grow  this  portion  of  our  business  and  manage  that  growth  effectively,  our  business,  financial 
condition or results of operations may be materially and adversely affected.

Our wholesale distribution business could be adversely affected if we are not able to attract new customers, increase sales to 
or retain existing customers or if our customers are unable to grow their businesses.

The  profitability  of  our  wholesale  segment  is  dependent  upon  sufficient  volume  to  support  our  operating  infrastructure.  The 
inability to attract new customers or the loss of existing customers from a decision to use alternative sources of distribution, 
whether through a competing wholesaler or by converting to self-distribution, or due to retail closure or industry consolidation 
may  negatively  impact  our  sales  and  operating  margins.  If  there  were  a  rapid  reduction  in  demand  for  the  products  we 
distribute,  our  results  and  cash  flows  may  be  negatively  impacted  if  we  are  unable  to  reduce  working  capital  maintained  to 
support current sales levels.

Our success also depends in part on the financial success and cooperation of our wholesale customers. They may not experience 
an acceptable level of sales or profitability, and our revenues and gross margins could be negatively affected as a result. We 
may also need to extend credit to our wholesale customers. While we seek to obtain security interests and other credit support in 
connection  with  the  financial  accommodations  we  extend,  such  collateral  may  not  be  sufficient  to  cover  our  exposure. 
Additionally,  in  the  past  we  have  entered  into  wholesale  customer  support  arrangements  to  guaranty  or  subsidize  real  estate 
obligations,  which  make  us  contingently  liable  in  the  event  our  wholesale  customers  default.  If  sales  trends  or  profitability 
worsen for wholesale customers, their financial results may deteriorate, which could result in, among other things, lost business 
for us, delayed or reduced payments to us or defaults on payments or other liabilities owed by wholesale customers to us, any of 
which  could  adversely  impact  our  financial  condition  and  results  of  operations,  as  well  as  our  ability  to  grow  our  wholesale 
business. In this regard, our wholesale customers are affected by the same economic conditions, including food inflation and 
deflation,  and  competition  that  our  retail  segment  faces.  The  magnitude  of  these  risks  increases  as  the  size  of  our  wholesale 
customers increases.

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Pandemics  or  disease  outbreaks,  such  as  the  COVID-19  pandemic  and  associated  responses,  may  disrupt  our  business, 
including  among  other  things,  increasing  our  costs,  impacting  our  supply  chain,  and  driving  change  in  customer  and 
consumer demand for our products, and could have a material adverse impact on our business.

Public  health  crises,  pandemics  and  epidemics,  such  as  the  COVID-19  pandemic,  and  responses  thereto,  have  impacted  our 
business directly and may in the future impact our business by, among other things, increasing our costs, impacting our supply 
chain  and  driving  change  in  customer  and  consumer  demand  for  our  products,  which  could  have  an  adverse  effect  on  our 
business, financial condition or results of operations. 

While our operations have generally stabilized since the peak of the pandemic, we cannot predict with certainty the extent that 
our operations may be impacted by any continuing effects of any pandemics, including COVID-19, on us or on our business 
partners,  suppliers  and  customers,  and  each  of  their  financial  conditions;  however,  any  adverse  effect  on  these  parties  could 
materially  and  adversely  impact  us.  To  the  extent  that  any  pandemics,  including  COVID-19,  continue  to  affect  the  U.S.  and 
global economy and our business, they may also heighten other risks described in this section, including but not limited to those 
related  to  consumer  behavior  and  expectations,  competition,  implementation  of  strategic  initiatives,  cybersecurity  threats, 
payment-related  risks,  supply  chain  disruptions,  labor  availability  and  cost,  litigation  and  operational  risk  as  a  result  of 
regulatory requirements.

Many of our customers are not obligated to continue purchasing products from us, and larger customers that have multiyear 
contracts with us may terminate these contracts early in certain situations or choose not to renew or extend these contracts 
at expiration.

Many of our wholesale customers buy from us under purchase orders, and we generally do not have written agreements with or 
long-term  commitments  from  these  customers  for  the  purchase  of  products.  We  cannot  assure  you  that  these  customers  will 
maintain  or  increase  their  orders  for  the  products  supplied  by  us  or  that  we  will  be  able  to  maintain  or  add  to  our  existing 
customer base. Decreases in volumes or orders for products supplied by us for these customers with whom we do not have a 
long-term contract may have a material adverse effect on our business, financial condition or results of operations.

We  may  have  contracts  with  certain  of  our  customers  (as  is  the  case  with  many  of  our  chain  customers)  that  obligate  the 
customer to buy products from us for a particular period of time. Even in this case, the contracts may not require the customer 
to purchase a minimum number of products from us or the contracts may afford the customer better pricing in the event that the 
volume of the customer’s purchases exceeds certain levels. If these customers were to terminate or fail to perform under these 
contracts prior to their scheduled termination, or if we or the customer elected not to renew or extend the term of the contract at 
its  expiration  or  not  to  renew  or  extend  at  historical  purchase  levels,  it  may  have  a  material  adverse  effect  on  our  business, 
financial  condition  or  results  of  operations,  including  additional  operational  expenses  to  transition  out  of  the  business  or  to 
adjust our facilities and staffing costs to cover the reduction in Net sales.

The cost of the capital available to us and limitations on our ability to access additional capital may have a material adverse 
effect on our business, financial condition, or results of operations.

Historically,  acquisitions  and  capital  expenditures  have  been  a  large  component  of  our  growth.  We  anticipate  that  capital 
expenditures will continue to be, and acquisitions may be, important to our growth in the future. As a result, increases in the 
cost of capital available to us, which could result from volatility in the credit markets, downgrades of our credit ratings, our not 
being in compliance with restrictive covenants under our debt agreements or our inability to access additional capital to finance 
acquisitions  and  capital  expenditures  through  borrowed  funds  could  restrict  our  ability  to  grow  our  business  organically  or 
through acquisitions, which could have a material adverse effect on our business, financial condition or results of operations.

In  addition,  our  profit  margins  depend  on  strategic  buying  initiatives,  such  as  discounted  bulk  purchases,  which  require 
spending significant amounts of working capital up-front to purchase products that we then sell over a multi-month time period. 
Increases  in  the  cost  of  capital  or  our  inability  to  access  additional  capital  on  satisfactory  terms  could  restrict  our  ability  to 
engage in strategic buying initiatives, which could reduce our profit margins and have a material adverse effect on our business, 
financial condition or results of operations.

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Disruptions  to  our  or  third-party  information  technology  systems,  including  cyber-attacks  and  security  breaches,  and  the 
costs of maintaining secure and effective information technology systems could negatively affect our business and results of 
operations.

The  efficient  operation  of  our  businesses  is  highly  dependent  on  computer  hardware  and  software  systems,  including 
customized  information  technology  systems.  Additionally,  our  businesses  increasingly  involve  the  receipt,  storage  and 
transmission of sensitive data, including personal information about our customers, employees, and vendors and our proprietary 
business  information.  We  also  share  information  with  vendors.  Information  technology  systems  are  vulnerable  to  not 
functioning as designed and to disruptions and security breaches by computer hackers and cyber terrorists, which risks may be 
more pronounced as associates continue to work remotely.

Although  we  continue  to  take  actions  to  strengthen  the  security  of  our  information  technology  systems,  these  measures  and 
technology may not adequately anticipate or prevent security breaches in the future or we may not be able to timely implement 
these  measures  and  technology.  Cyber-attacks  are  rapidly  evolving  and  becoming  increasingly  frequent,  sophisticated  and 
difficult to detect. The failure to promptly detect, determine the extent of, appropriately respond to, and contain a significant 
data security attack or breach of our systems or any third-party system used by us could have a material adverse impact on our 
business,  financial  condition  or  results  of  operations.  Any  such  failure  also  could  result  in  the  loss  of  credibility  with  our 
customers and damage to our reputation and future sales, including through negative publicity. In addition, the unavailability of 
information  technology  systems  or  failure  of  these  systems  or  software  to  perform  as  anticipated  for  any  reason,  including  a 
ransomware  attack,  and  any  inability  to  respond  to,  or  recover  from,  such  an  event,  could  disrupt  our  business,  impact  our 
customers and result in decreased performance, increased overhead costs and increased risk for liability, causing our business 
and results of operations to suffer.

As  a  merchant  that  accepts  debit  and  credit  cards  for  payment,  we  are  subject  to  the  Payment  Card  Industry  Data  Security 
Standard (“PCI DSS”), issued by the PCI Council. Additionally, we are subject to PCI DSS as a service provider, which is a 
business entity that is not a payment brand directly involved in the processing, storage or transmission of cardholder data. PCI 
DSS contains compliance guidelines and standards with regard to our security surrounding the physical and electronic storage, 
processing  and  transmission  of  individual  cardholder  data.  By  accepting  debit  cards  for  payment,  we  are  also  subject  to 
compliance  with  American  National  Standards  Institute  data  encryption  standards  and  payment  network  security  operating 
guidelines.  The  cost  of  complying  with  stricter  privacy  and  information  security  laws,  standards  and  guidelines,  including 
evolving  PCI  DSS  standards,  and  developing,  maintaining,  and  upgrading  technology  systems  to  address  future  advances  in 
technology,  could  be  significant  and  we  could  experience  problems  and  interruptions  associated  with  the  implementation  of 
new or upgraded systems and technology or with maintenance or adequate support of existing systems. Failure to comply with 
such laws, standards, and guidelines, or payment card industry standards such as those involving MasterCard, Visa and Europay 
(EMV) transactions, could have a material adverse impact on our business, financial condition, or results of operations.

Increases  in  healthcare,  pension  and  other  costs  under  the  Company’s  and  multiemployer  benefit  plans  could  adversely 
affect our financial condition and results of operations.

We provide single employer and multiemployer health, defined benefit pension and defined contribution benefits to many of 
our  employees  and,  in  some  cases,  former  employees.  The  costs  of  such  benefits  continue  to  increase,  and  the  extent  of  any 
increase depends on a number of different factors, many of which are beyond our control. These factors include governmental 
regulations such as The Patient Protection and Affordable Care Act, which has resulted in changes to the U.S. healthcare system 
and  imposes  mandatory  types  of  coverage,  reporting  and  other  requirements;  return  on  plan  assets;  changes  in  actuarial 
valuations, estimates, or assumptions used to determine our benefit obligations for certain benefit plans, which require the use 
of  significant  estimates,  including  the  discount  rate,  expected  long-term  rate  of  return  on  plan  assets,  mortality  rates  and  the 
rates  of  increase  in  compensation  and  healthcare  costs;  for  multiemployer  plans,  the  outcome  of  collective  bargaining  and 
actions taken by trustees who manage the plans; and potential changes to applicable legislation or regulation. If we are unable to 
control  these  benefits  and  costs,  we  may  experience  increased  operating  costs,  which  may  adversely  affect  our  financial 
condition and results of operations.

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Additionally,  certain  multiemployer  pension  plans  in  which  we  participate  are  underfunded  with  the  projected  benefit 
obligations exceeding the fair value of those plans’ assets, in certain cases, by a wide margin. If a withdrawal were to occur, the 
withdrawal  liability  from  our  multiemployer  plans  could  be  material,  our  efforts  to  mitigate  these  liabilities  may  not  be 
successful, and potential exposure to withdrawal liabilities could cause us to forgo or negatively impact our ability to enter into 
other business opportunities. Some of these plans have required rehabilitation plans or funding improvement plans, and we can 
give no assurances of the extent to which a rehabilitation plan or a funding improvement plan will improve the funded status of 
the plan. It is possible that increases of unfunded liabilities of the multiemployer pension plans would result in increased future 
payments by us and the other participating employers over the next several years. Any changes to our pension plans that would 
impact  associates  covered  by  collective  bargaining  agreements  will  be  subject  to  negotiation,  which  may  limit  our  ability  to 
manage  our  exposure  to  these  plans.  A  significant  increase  to  funding  requirements  could  adversely  affect  our  financial 
condition, results of operations, or cash flows. The financial condition of these pension plans may also negatively impact our 
debt ratings, which may increase the cost of borrowing or adversely affect our ability to access financial markets.

Activist investors could negatively impact our business and cause disruptions to our operations.

We  value  constructive  input  from  investors  and  regularly  engage  in  dialogue  with  our  stockholders  regarding  strategy  and 
performance. Activist stockholders who disagree with the composition of the Board of Directors, our strategy or the way the 
Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy 
contest, making public statements critical of our performance or business or engaging in other similar activities.  

Responding to such actions by activist investors can be costly and time-consuming, disruptive to our operations and divert the 
attention of management, our Board of Directors and our employees, and our ability to execute our strategic plan could also be 
impaired as a result. For example, we have been required to retain the services of various professionals to advise us on activist 
stockholder matters, including legal, financial and other advisory fees. In the event of an activist campaign we could be required 
to  incur  substantially  increased  legal,  public  relations  and  other  advisory  fees  and  proxy  solicitation  expenses.  In  addition, 
perceived  uncertainties  as  to  our  future  direction,  strategy,  or  leadership  created  as  a  consequence  of  activist  investors  may 
result  in  the  loss  of  potential  business  opportunities,  harm  our  ability  to  attract  new  or  retain  existing  investors,  customers, 
directors,  employees,  collaborators  or  other  partners,  disrupt  relationships  with  the  Company,  and  the  market  price  of  our 
common stock could also experience periods of increased volatility as a result.

Our insurance and self-insurance programs may not be adequate to cover future claims.

We  use  a  combination  of  insurance  and  self-insurance  to  provide  for  potential  liabilities,  including  workers’  compensation, 
general and auto liability, director and officer liability, property risk, cyber and privacy risks and employee healthcare benefits. 
We believe that our insurance 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 we believe are not commercially reasonable to insure. These losses, should they 
occur, could have a material adverse effect on our business, financial condition or results of operations. In addition, the cost of 
insurance fluctuates based upon our historical trends, market conditions, and availability. In response to the current market, we 
have  also  increased  deductibles  and  increased  percentages  of  loss  retention  above  the  deductible  for  certain  of  our  policies, 
which could expose us to higher costs in the event of a claim.

We estimate the liabilities and required reserves associated with the risks we retain. Any such estimates and actuarial projection 
of losses is subject to a considerable degree of variability. Among the causes of this variability are changes in benefit levels, 
medical  fee  schedules,  medical  utilization  guidelines,  severity  of  injuries  and  accidents,  vocation  rehabilitation  and 
apportionment  and  unpredictable  external  factors  affecting  inflation  rates,  discount  rates,  rising  healthcare  costs,  litigation 
trends, legal interpretations, and actual claim settlement patterns. If actual losses incurred are greater than those anticipated, our 
reserves  may  be  insufficient  and  additional  costs  could  be  recorded  in  our  consolidated  financial  statements.  If  we  suffer  a 
substantial  loss  that  exceeds  our  self-insurance  reserves  and  any  excess  insurance  coverage,  the  loss  and  attendant  expenses 
could harm our business, financial condition, or results of operations. 

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Our debt agreements contain restrictive covenants that may limit our operating flexibility.

Our  debt  agreements,  including  the  loan  agreement  (the  “ABL  Loan  Agreement”)  related  to  our  $2,600  million  asset-based 
revolving credit facility (the “ABL Credit Facility”) entered into in June 2022, and the term loan agreement (the “Term Loan 
Agreement”) related to our $1,950 million term loan facility (the “Term Loan Facility”) entered into on October 22, 2018, as 
amended, and the indenture governing our unsecured 6.750% Senior Notes due October 15, 2028 (the “Senior Notes”) contain 
financial  covenants  and  other  restrictions  that  limit  our  operating  flexibility  and  our  flexibility  in  planning  for  or  reacting  to 
changes in our business. These restrictions may prevent us from taking actions that we believe would be in the best interest of 
our business if we were not subject to these limitations and may make it difficult for us to successfully execute our business 
strategy or effectively compete with companies that are not similarly restricted.

In addition, our ABL Loan Agreement, Term Loan Agreement and the indenture governing the Senior Notes require that we 
comply  with  various  financial  tests  and  impose  certain  restrictions  on  us,  including  among  other  things,  restrictions  on  our 
ability  to  incur  additional  indebtedness,  create  liens  on  assets,  make  loans  or  investments,  or  return  capital  to  stockholders 
through share repurchases or paying dividends. Failure to comply with these covenants could have a material adverse effect on 
our business, financial condition, or results of operations.

We have experienced losses due to the uncollectibility of accounts in the past and could experience losses in the future if our 
customers are unable to timely pay their debts to us.

Certain of our customers have from time to time experienced bankruptcy, insolvency or an inability to pay their debts to us as 
they come due. If our customers 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 our business, financial condition or results of operations. It is possible that 
customers may reject their contractual obligations to us under bankruptcy laws or otherwise. Significant customer bankruptcies 
could further adversely affect our revenues and increase our Operating expenses by requiring larger provisions for bad debt. In 
addition, even when our contracts with these customers are not rejected in bankruptcy, if customers are unable to meet their 
obligations  on  a  timely  basis,  it  could  adversely  affect  our  ability  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  a 
material adverse effect on our business, financial condition or results of operations.

During  periods  of  economic  weakness,  small  to  medium-sized  businesses,  like  many  of  our  independent  channel  customers, 
may  be  impacted  more  severely  and  more  quickly  than  larger  businesses.  Similarly,  these  smaller  businesses  may  be  more 
likely to be more severely impacted by events outside of their control, like macro-economic shifts or significant weather events. 
Consequently,  the  ability  of  such  businesses  to  repay  their  obligations  to  us  may  deteriorate,  and  in  some  cases  this 
deterioration  may  occur  quickly,  which  could  materially  and  adversely  impact  our  business,  financial  condition  or  results  of 
operations.

Impairment charges for long-lived assets could adversely affect the Company’s financial condition and results of operations.

We  monitor  the  recoverability  of  our  long-lived  assets,  such  as  buildings,  equipment  and  leased  assets,  and  evaluate  their 
carrying value for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets 
may not be fully recoverable. If the review performed indicates that impairment has occurred, we are required to record a non-
cash impairment charge for the difference between the carrying value and fair value of the long-lived assets, in the period the 
determination  is  made.  The  testing  of  long-lived  assets  and  goodwill  for  impairment  requires  us  to  make  estimates  that  are 
subject  to  significant  assumptions  about  our  future  revenue,  profitability,  cash  flows,  fair  value  of  assets  and  liabilities,  and 
weighted average cost of capital, as well as other assumptions. Changes in these estimates, or changes in actual performance 
compared with these estimates, may affect the fair value of long-lived assets, which may result in an impairment charge.

We cannot accurately predict the amount or timing of any impairment. Should the value of long-lived assets become impaired, 
our financial condition and results of operations may be adversely affected.

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Economic Risks

Changes in consumer purchasing habits could materially and adversely affect our business, financial condition, or results 
of operations.

Changes in consumer purchasing habits may reduce demand for certain of the products we distribute. Consumer habits could be 
affected by a number of factors, including an increase in food-away-from home options, changes in attitudes regarding benefits 
of natural and organic products when compared to similar lower margin conventional products, new information regarding the 
health effects of consuming certain foods, changes in disposable income levels, which may be impacted by a reduction in the 
level of government spending that supports grocery purchases, or other macro trends. For example, we experienced declines in 
certain of our sales channels as a result of changes in consumer purchasing habits related to the COVID-19 pandemic, including 
reductions in foodservice, bulk snacks, seeds and nuts, and international categories, and we cannot be certain how consumer 
habits may continue to evolve. Further, in a sustained economic downturn, consumers may shift their purchases to lower-cost, 
lower-margin products. Although there is a growing consumer preference for sustainable, organic and locally grown products, 
which are higher margin products, there can be no assurance that such trend will continue. Changing consumer preferences also 
result from generational shifts, including younger generations seeking new and different foods, as well as more ethnic, menu 
options  and  menu  innovation.  However,  there  can  be  no  assurance  that  such  trends  will  continue.  If  consumer  eating  habits 
change significantly, we may be required to modify or discontinue sales of certain items in our product portfolio, and we may 
experience  higher  costs  associated  with  the  implementation  of  those  changes.  Additionally,  if  we  are  not  able  to  effectively 
respond to changes in consumer perceptions or adapt our product offerings to new or developing trends in eating habits, our 
business, financial condition, or results of operations could suffer.

Our leverage and debt service obligations increase our sensitivity to the effects of economic downturns and could adversely 
affect our business.

As of July 29, 2023, we had approximately $2.0 billion of long-term debt outstanding. Our leverage, and any increase therein, 
could have important potential consequences, including, but not limited to:

•

•

•

•
•

increasing  our  vulnerability  to,  and  reducing  our  flexibility  in  planning  for  and  responding  to,  adverse  general 
economic and industry conditions and changes in our business and the competitive environment and placing us at a 
disadvantage to our competitors that are less leveraged;
requiring  us  to  use  a  substantial  portion  of  operating  cash  flow  to  pay  principal  of,  and  interest  on,  indebtedness, 
instead  of  other  purposes,  such  as  funding  working  capital,  capital  expenditures,  acquisitions,  returning  capital  to 
stockholders through dividends or share repurchases or other corporate purposes;
increasing  our  vulnerability  to  a  downgrade  of  our  credit  rating,  which  could  adversely  affect  our  cost  of  funds, 
liquidity, and access to capital markets;
restricting us from making desired strategic acquisitions in the future or causing us to make non-strategic divestitures;
increasing our exposure to the risk of increased interest rates insofar as current and future borrowings are subject to 
variable rates of interest;

• making it more difficult for us to repay, refinance, or satisfy our obligations with respect to our indebtedness;
•
•

limiting our ability to borrow additional funds and increasing the cost of any such borrowing; and
imposing restrictive covenants on our operations, which could result in an event of default if we are unable to comply, 
and  absent  any  cure  or  waiver  of  such  default  ultimately  could  result  in  the  acceleration  of  the  such  debt  and 
potentially other debt with cross-acceleration or cross-default provisions.

There is no assurance that we will generate sufficient cash flow from operations or that future debt or equity financing will be 
available to us to enable us to pay our indebtedness. As a result, we may need to refinance all or a portion of our indebtedness 
on or before maturity, however, we may not be able to do so on favorable terms, or at all. Any inability to generate sufficient 
cash  flow  or  refinance  our  indebtedness  on  favorable  terms  could  have  a  material  adverse  effect  on  our  business,  financial 
condition or results of operations.

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Increased fuel costs may adversely affect our results of operations.

Increased fuel costs may have a negative impact on our results of operations. Both the price and supply of fuel are unpredictable 
and  fluctuate  based  on  events  outside  our  control,  including  geopolitical  developments,  supply  and  demand  for  oil  and  gas, 
actions by the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing 
countries and regions, regional production patterns and environmental concerns. Higher costs for diesel fuel can increase the 
price we pay for products as well as the costs we incur to deliver products to our customers, including costs of inbound goods 
from  our  suppliers.  These  factors,  in  turn,  may  negatively  impact  our  net  sales,  margins,  operating  expenses  and  operating 
results.  To  the  extent  we  do  not  enter  into  commodity  derivative  contracts  to  hedge  a  portion  of  our  projected  diesel  fuel 
requirements, our exposure to volatility in the price of diesel fuel would increase relative to our exposure to volatility in periods 
in which we have outstanding commodity derivative contracts. We also maintain a fuel program with certain customers, which 
allows us to pass some of the changes in fuel costs through to those customers. If fuel costs continue to increase in the future, 
we may experience difficulties in passing all or a portion of these costs along to our customers, which may adversely affect our 
business, financial condition or results of operations.

Disruption of our distribution network or to the operations of our customers could adversely affect our business.

Damage  or  disruption  to  our  distribution  capabilities  due  to  weather,  including  extreme  or  prolonged  weather  conditions, 
natural  disaster,  fire,  civil  unrest,  terrorism,  pandemic,  strikes,  product  recalls  or  safety  concerns  generally,  crop  conditions, 
availability of key commodities, regulatory actions, disruptions in technology, the financial and/or operational instability of key 
suppliers,  performance  by  outsourced  service  providers,  transportation  interruptions,  labor  supply  or  stoppages  or  vendor 
defaults or disputes, or other reasons could impair our ability to distribute our products. For example, we have both distribution 
centers and retail stores in cities and states where civil unrest has led to extensive property damage. To the extent that we are 
unable, or it is not financially feasible, to mitigate the likelihood or potential impact of such events, or to effectively manage 
such events if they occur, there could be an adverse effect on our business, financial condition or results of operations.

In  addition,  such  disruption  may  interrupt  or  impede  access  to,  or  otherwise  reduce  the  number  of  consumers  who  visit,  our 
customers’  facilities,  all  of  which  could  have  a  material  adverse  effect  on  our  business,  financial  condition  or  results  of 
operations.

Legal and Regulatory Risks

We  are  subject  to  significant  governmental  regulation  and  failure  to  comply  with  such  regulations  may  have  a  material 
adverse effect on our business, financial condition or results of operations.

Our  business  is  highly  regulated  at  the  federal,  state,  and  local  levels,  and  our  products  and  distribution  operations  require 
various licenses, permits and approvals, including:

•

•

•

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 United States Department of Agriculture, the 
United  States  Department  of  Labor  Occupational  and  Health  Administration  and  various  state  health  and  workplace 
safety authorities; and
our United States trucking operations are subject to regulation by the United States Department of Transportation and 
the United States Federal Highway Administration.

In addition, the various federal, state and local laws, regulations and administrative practices to which we are subject require us 
to  comply  with  numerous  provisions  regulating  areas  such  as  environmental,  health  and  sanitation  standards,  food  safety, 
marketing of natural or organically produced food, facilities, pharmacies, equal employment opportunity, public accessibility, 
employee benefits, wages and hours worked and licensing for the sale of food, drugs, tobacco and alcoholic beverages, among 
others. For example:

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Environmental,  Health  and  Safety:  Our  operations  are  subject  to  extensive  and  increasingly  stringent  laws  and  regulations 
pertaining to the protection of the environment, including those relating to the discharge of materials into the environment, the 
disposal  of  food  by-products,  the  handling,  treatment,  and  disposal  of  wastes,  maintenance  of  refrigeration  systems,  and 
remediation  of  soil  and  groundwater  contamination.  Compliance  with  existing  or  changing  environmental  and  safety 
requirements, including more stringent limitations imposed or expected to be imposed in any recently renewed or soon-to-be 
renewed  environmental  permits,  may  require  capital  expenditures.  Additionally,  concern  over  climate  change,  including  the 
impact  of  global  warming,  has  led  to  significant  United  States  and  international  legislative  and  regulatory  efforts  to  limit 
greenhouse gas emissions. Increased regulation regarding greenhouse gas emissions, particularly with respect to diesel engine 
emissions, could result in substantial additional operating expenses. These expenses may include an increase in the cost of the 
fuel  and  other  energy  we  purchase  and  capital  costs  associated  with  updating  or  replacing  our  vehicles  sooner  than  planned. 
Until the timing, scope and extent of such regulation becomes known, we cannot predict its effect on our results of operations. 
It is reasonably possible, however, that it could result in material costs, which we may be unable to pass on to our customers.

Further,  our  business  may  be  subject  to  climate-related  transition  risks,  which  arise  from  society’s  transition  toward  a  low-
carbon economy due to changes in laws or regulations, technological advancements, and investor and consumer sentiment. We 
also have announced third-party validated emissions reduction targets covering our operations and value chain. While many of 
our initiatives will create efficiencies and return on investment, the transition to a low-carbon economy generally and our own 
efforts to reduce emissions could lead to increased costs to transition to or invest in renewable energy sources, including electric 
vehicles, increased compliance costs, including tracking and reporting systems, and increased costs of products, commodities 
and energy.

Food  Safety  and  Marketing:  There  is  significant  governmental  scrutiny,  regulations  and  public  awareness  regarding  food 
quality and food and drug safety. We may be adversely affected if consumers lose confidence in the safety and quality of the 
food we manufacture or the food and drug products we distribute. In addition, we are subject to governmental scrutiny of and 
public  awareness  regarding  food  safety  and  the  sale,  packaging,  and  marketing  of  natural  and  organic  products.  Compliance 
with these laws may impose a significant burden on our operations.

Wage Rates and Paid Leave: Changes in federal, state or local minimum wage and overtime laws or employee paid leave laws 
could  cause  us  to  incur  additional  wage  costs,  which  could  adversely  affect  our  operating  margins.  Failure  to  comply  with 
existing or new laws or regulations could result in significant damages, penalties and/or litigation costs.

Foreign Operations: Our supplier base includes domestic and foreign suppliers. In addition, we have customers located outside 
the United States. Accordingly, laws and regulations affecting the importation and taxation of goods, including duties, tariffs 
and  quotas,  or  changes  in  the  enforcement  of  those  laws  and  regulations  could  adversely  impact  our  financial  condition  and 
results of operations. In addition, we are required to comply with laws and regulations governing export controls, and ethical, 
anti-bribery  and  similar  business  practices  such  as  the  Foreign  Corrupt  Practices  Act.  Our  Canadian  operations  are  similarly 
subject  to  extensive  regulation,  including  the  English  and  French  dual  labeling  requirements  applicable  to  products  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 of operations.

Pharmacy: We are required to meet various security and operating standards and comply with the Controlled Substances Act 
and  its  accompanying  regulations  governing  the  sale,  marketing,  packaging,  holding,  record  keeping  and  distribution  of 
controlled  substances.  During  the  past  several  years,  the  United  States  healthcare  industry  has  been  subject  to  an  increase  in 
governmental  regulation  and  audits  at  both  the  federal  and  state  levels.  For  example,  in  2019,  the  Company  settled  with  the 
Drug Enforcement Administration alleged violations of the Controlled Substances Act relating to an administrative subpoena 
received  by  Supervalu  that  requested,  among  other  things,  information  on  the  Company’s  pharmacy  policies  and  procedures 
generally,  as  well  as  the  production  of  documents  that  are  required  to  be  kept  and  maintained  pursuant  to  the  Controlled 
Substances Act and its accompanying regulations. 

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The failure to comply or maintain compliance with applicable governmental laws and regulations, including those referred to 
above  and  in  Item  1.  Business  -  Government  Regulation  of  this  Annual  Report,  could  result  in,  among  other  things, 
administrative, civil, or criminal penalties or fines; mandatory or voluntary product recalls; warning or other letters; cease and 
desist  orders  against  operations  that  are  not  in  compliance;  closure  of  facilities  or  operations;  the  loss,  revocation,  or 
modification  of  any  existing  licenses,  permits,  registrations  or  approvals;  the  failure  to  obtain  additional  licenses,  permits, 
registrations or approvals in new jurisdictions where we intend to do business; or the loss of our ability to participate in federal 
and state healthcare programs, any of which could have a material adverse effect on our business, financial condition or results 
of operations. These laws and regulations may change in the future. We cannot predict the nature of future laws, regulations, 
interpretations  or  applications,  nor  can  we  determine  the  effect  that  additional  governmental  regulations  or  administrative 
orders, when and if promulgated, or disparate federal, state and local regulatory schemes would have on our future business. 
We may incur material costs in our efforts to comply with current or future laws and regulations or due to any required product 
recalls.

In addition, if we fail to comply with applicable laws and regulations or encounter disagreements with respect to our contracts 
subject to governmental regulations, including those referred to above, we may be subject to investigations, criminal sanctions 
or civil remedies, including fines, injunctions, prohibitions on exporting, seizures, or debarments from contracting with the U.S. 
or Canadian governments. The cost of compliance or the consequences of non-compliance, including debarments, could have a 
material adverse effect on our business, financial condition, or results of operations. In addition, governmental units may make 
changes  in  the  regulatory  frameworks  within  which  we  operate  that  may  require  us  to  incur  substantial  increases  in  costs  in 
order to comply with such laws and regulations.

Product liability claims could have an adverse effect on our business.

We face a risk of exposure to product liability claims if the products we sell or manufacture cause injury or illness. In addition, 
meat, seafood, cheese, poultry and other products that we distribute could be subject to recall because they are, or are alleged to 
be,  contaminated,  spoiled  or  inappropriately  labeled.  Our  meat  and  poultry  products  may  be  subject  to  contamination  by 
disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella and generic E. coli. These pathogens 
are generally found in the environment, and as a result, there is a risk that they, as a result of food processing, could be present 
in the meat and poultry products we distribute. These pathogens can also be introduced as a result of improper handling at the 
consumer  level.  These  risks  may  be  controlled,  although  not  eliminated,  by  adherence  to  good  manufacturing  practices  and 
finished product testing. We have little, if any, control over proper handling before we receive the product or once the product 
has been shipped to our customers. Any events that give rise to actual or potential food contamination, drug contamination or 
food-borne illness or injury, or events that give rise to claims that our products are not of the quality or composition claimed to 
be, may result in product liability claims from individuals, consumers and governmental agencies, penalties and enforcement 
actions  from  government  agencies,  a  loss  of  consumer  confidence,  harm  to  our  reputation  and  could  cause  production  and 
delivery disruptions, which may adversely affect our financial condition or results of operations.

In addition, if we were to manufacture or distribute foods that are or are perceived to be unsafe, contaminated, or defective, it 
may  be  necessary  for  us  to  recall  such  products,  or  we  may  recall  products  that  we  determine  do  not  satisfy  our  quality 
standards.  Any  resulting  product  recalls  could  have  an  adverse  effect  on  our  business,  financial  condition  or  results  of 
operations. We have, and the companies we have acquired have had, liability insurance with respect to product liability claims. 
This insurance 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 against companies we have acquired. 

We  generally  seek  contractual  indemnification  and  insurance  coverage  from  our  suppliers  and  manufacturers,  but  any  such 
indemnification  is  limited  to  the  creditworthiness  of  the  indemnifying  party.  We  may  be  subject  to  liability,  which  could  be 
substantial,  because  of  actual  or  alleged  contamination  in  products  manufactured  or  sold  by  us,  including  products  sold  by 
companies  before  we  acquired  them.  If  we  do  not  have  adequate  insurance  or  contractual  indemnification  available,  product 
liability claims and costs associated with product recalls, including a loss of business, could have a material adverse effect on 
our business, financial condition or results of operations.

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We may be unable to adequately protect our intellectual property rights, which could harm our business.

We rely on a combination of trademark, service mark, trade secret, copyright, and domain name law and internal procedures 
and  nondisclosure  agreements  to  protect  our  intellectual  property.  We  believe  our  trademarks,  private  label  products,  and 
domain names are valuable assets. However, our intellectual property rights may not be sufficient to distinguish our products 
and services from those of our competitors and to provide us with a competitive advantage. From time to time, third parties may 
use  names,  logos,  and  slogans  similar  to  ours,  may  apply  to  register  trademarks  or  domain  names  similar  to  ours,  and  may 
infringe or otherwise violate our intellectual property rights. Our intellectual property rights may not be successfully asserted 
against such third parties or may be invalidated, circumvented or challenged. Asserting or defending our intellectual property 
rights could be time consuming and costly and could distract management’s attention and resources. If we are unable to prevent 
our  competitors  from  using  names,  logos,  slogans  and  domain  names  similar  to  ours,  consumer  confusion  could  result,  the 
perception of our brands and products could be negatively affected, and our sales and profitability could suffer as a result. In 
addition, if our wholesale customers receive negative publicity or fail to maintain the quality of the goods and services used in 
connection with our trademarks, our rights to, and the value of, our trademarks could potentially be harmed. Failure to protect 
our proprietary information could also have an adverse effect on our business.

We may also be subject to claims that our activities or the products we sell infringe, misappropriate, or otherwise violate the 
intellectual  property  rights  of  others.  Any  such  claims  can  be  time  consuming  and  costly  to  defend  and  may  distract 
management’s attention and resources, even if the claims are without merit, and may prevent us from using our trademarks in 
certain geographies or in connection with certain products and services, any of which could adversely affect our business.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

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ITEM 2.    PROPERTIES

Distribution Centers

We maintained 55 distribution centers and warehouses at July 29, 2023, which were utilized by our Wholesale segment and our 
other operating segments. The following table shows our dry and cold storage distribution and warehouse facilities and their 
associated owned and leased square footage occupied as of July 29, 2023:

Location(1)

Hopkins, Minnesota(2)
Allentown, Pennsylvania
Stockton, California
Mechanicsville, Virginia(2)
Riverside, California
Centralia, Washington
Green Bay, Wisconsin
York, Pennsylvania
Joliet, Illinois
Champaign, Illinois
Pompano Beach, Florida
Harrisburg, Pennsylvania
Fort Wayne, Indiana(2)
Commerce, California
Ridgefield, Washington(2)
Quincy, Florida(2)
Sarasota, Florida
Montgomery, New York(2)
Pittsburgh, Pennsylvania
Atlanta, Georgia(2)
Lancaster, Texas
Anniston, Alabama
Indianola, Mississippi
Aurora, Colorado
Rocklin, California(2)
Stevens Point, Wisconsin(2)
Gilroy, California(2)
Sturtevant, Wisconsin(2)
Moreno Valley, California
Carlisle, Pennsylvania
Howell Township, New Jersey(2)
Chesterfield, New Hampshire(2)
Richburg, South Carolina(2)
Fargo, North Dakota(2)
Oglesby, Illinois
Dayville, Connecticut(2)
Greenwood, Indiana(2)
Prescott, Wisconsin(2)
Santa Fe Springs, California
Iowa City, Iowa

Owned Square 
Footage

Leased Square 
Footage
(in thousands)

Total Square 
Footage 

1,866 
— 
— 
1,249 
— 
— 
— 
— 
— 
— 
— 
— 
871 
— 
779 
758 
— 
500 
679 
389 
— 
465 
543 
— 
469 
314 
447 
442 
— 
— 
397 
300 
342 
336 
— 
317 
308 
307 
— 
271 

— 
1,327 
1,290 
— 
1,171 
1,155 
1,080 
1,039 
988 
910 
903 
883 
— 
858 

— 
— 
743 
180 
— 
259 
590 
105 
— 
529 
— 
146 
— 
— 
434 
423 
— 
69 
— 
— 
325 
— 
— 
— 
298 
— 

1,866 
1,327 
1,290 
1,249 
1,171 
1,155 
1,080 
1,039 
988 
910 
903 
883 
871 
858 
779 
758 
743 
680 
679 
648 
590 
570 
543 
529 
469 
460 
447 
442 
434 
423 
397 
369 
342 
336 
325 
317 
308 
307 
298 
271 

24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Location(1)

West Sacramento, California(2)
Bismarck, North Dakota(2)
Anniston, Alabama
Billings, Montana(2)
Vaughan, Ontario
Edison, New Jersey
West Newell, Illinois
Richmond, British Columbia
Londonderry, New Hampshire
Philadelphia, Pennsylvania
West Sacramento, California(2)
Logan Township, New Jersey
Fife, Washington
Montreal, Quebec
Truckee, California
Total

Owned Square 
Footage

Leased Square 
Footage
(in thousands)

Total Square 
Footage 

251 
244 
— 
220 
— 
— 
155 
— 
— 
— 
85 
— 
— 
— 
— 
13,304 

— 
— 
231 
— 
180 
178 
— 
126 
124 
100 
— 
70 
39 
31 
8 
16,792 

251 
244 
231 
220 
180 
178 
155 
126 
124 
100 
85 
70 
39 
31 
8 
30,096 

(1) Distribution  centers  and  warehouses  as  presented  here  reflect  the  location  of  the  main  distribution  center  campus  and  warehouse 

combined with their related offsite storage used to supply customers from these locations.

(2) These distribution centers secure our Term Loan Facility. 

Retail Stores

The following table summarizes continuing operations retail stores utilized by our Retail segment as of July 29, 2023:

Retail Banner

Cub Foods(1)
Shoppers
Total

Number of 
Stores

Owned Square 
Footage

Leased Square 
Footage
(square footage in thousands)

Total Square 
Footage

54 
24 
78 

1,194 
— 
1,194 

2,517 
1,355 
3,872 

3,711 
1,355 
5,066 

(1) Cub Foods stores include stores in which we have a controlling ownership interest and excludes 32 franchised Cub Foods full-line 

and separate liquor stores in which we have no ownership interest or a minority interest.

Corporate

As  of  July  29,  2023,  we  had  approximately  600  thousand  square  feet,  86%  of  which  was  leased,  of  surplus  retail  stores  and 
warehouses, excluding assigned leases.

As  of  July  29,  2023,  we  utilized  approximately  454  thousand  square  feet  of  office  space  primarily  related  to  our  corporate 
offices located in Providence, Rhode Island and Eden Prairie, Minnesota, as well as other smaller administrative offices across 
the United States. We own approximately 240 thousand square feet and lease the remaining 214 thousand square feet of our 
corporate office space.

25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Table of Contents

ITEM 3.    LEGAL PROCEEDINGS

From  time  to  time,  we  are  involved  in  routine  litigation  or  other  legal  proceedings  that  arise  in  the  ordinary  course  of  our 
business, including investigations and claims regarding employment law including wage and hour, pension plans, unfair labor 
practices, labor union disputes, supplier, customer and service provider contract terms, product liability, real estate and antitrust. 
Other than as set forth in Note 17—Commitments, Contingencies and Off-Balance Sheet Arrangements in Part II, Item 8 of this 
Annual  Report,  which  is  incorporated  herein,  there  are  no  pending  material  legal  proceedings  to  which  we  are  a  party  or  to 
which our property is subject.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM  5.        MARKET  FOR  THE  REGISTRANT’S  COMMON  EQUITY,  RELATED  STOCKHOLDER  MATTERS 
AND ISSUER PURCHASES OF EQUITY SECURITIES

PART II.

Market Information, Holders and Dividends 

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “UNFI”. 

On September 21, 2023, we had 79 stockholders of record. 

We have never paid any cash dividends on our capital stock and we have no current intention to pay cash dividends. Our future 
dividend policy will depend on our earnings, capital requirements, financial condition and other factors considered relevant by 
our Board of Directors. Our Term Loan Facility, ABL Credit Facility and Senior Notes contain terms that limit our ability to 
make cash dividends.

Comparative Stock Performance

The following graph compares the yearly change in cumulative total stockholder returns on our common stock for the last five 
fiscal  years  with  the  cumulative  return  on  the  Standard  &  Poor’s  (“S&P”)  SmallCap  600  Index  and  the  S&P  SmallCap  600 
Food Distributors Index. The comparison assumes the investment of $100 on July 28, 2018 in our common stock and in each of 
the  indices  and,  in  each  case,  assumes  reinvestment  of  all  dividends.  The  stock  price  performance  shown  below  is  not 
necessarily indicative of future performance.

26

 Table of Contents

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 otherwise subject 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, as amended (the “Securities Act”), or the Exchange Act.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among United Natural Foods, Inc., the S&P SmallCap 600, the S&P SmallCap 600 Food Distributors(1)

(1) Our selected industry peer group is the S&P SmallCap 600 Food Distributors Index, which includes SpartanNash Company, The 

Andersons, Inc., The Chef’s Warehouse, Inc. and United Natural Foods, Inc. 

$ 
United Natural Foods, Inc. 
$ 
S&P SmallCap 600 Index
S&P SmallCap 600 Food Distributors Index $ 

Issuer Purchases of Equity Securities

July 28, 
2018
100.00  $ 
100.00  $ 
100.00  $ 

August 3, 
2019

August 1, 
2020

25.90  $ 
91.48  $ 
56.80  $ 

61.06  $ 
85.79  $ 
58.18  $ 

July 31, 
2021
101.88  $ 
134.64  $ 
95.58  $ 

July 30, 
2022
130.76  $ 
126.24  $ 
129.29  $ 

July 29, 
2023

63.73 
131.70 
104.97 

On September 21, 2022, our Board of Directors authorized a new repurchase program for up to $200 million of our common 
stock  over  a  term  of  four  years  (the  “2022  Repurchase  Program”).  Under  the  2022  Repurchase  Program,  we  repurchased 
approximately 1,888,000 shares of our common stock for a total cost of $62 million in fiscal 2023. We did not repurchase any 
shares of our common stock in fiscal 2022 or 2021. As of July 29, 2023, we had $138 million remaining authorized under the 
2022 Repurchase Program. 

Any repurchases are intended to be made in accordance with applicable securities laws from time to time in the open market, 
through  privately  negotiated  transactions  or  otherwise.  With  respect  to  open  market  purchases,  we  may  use  a  plan  or  plans 
meeting the conditions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which allows us to repurchase 
shares  during  periods  when  we  otherwise  might  be  prevented  from  doing  so  under  insider  trading  laws  or  because  of  self-
imposed  blackout  periods.  We  manage  the  timing  of  any  repurchases  in  response  to  market  conditions  and  other  relevant 
factors, including any limitations on our ability to make repurchases under the terms of our ABL Credit Facility, Term Loan 
Facility and Senior Notes.

27

United Natural Foods, Inc. S&P SmallCap 600 IndexS&P SmallCap 600 Food Distributors IndexJuly 28,2018August 3,2019August 1,2020July 31,2021July 30,2022July 29,2023$0$50$100$150$200 Table of Contents

The following table presents purchases of our common stock and related information for each of the months in the quarter 
ended July 29, 2023:

(in millions, except shares and per share 
amounts)
Period(1):

April 30, 2023 to June 3, 2023

June 4, 2023 to July 1, 2023

July 2, 2023 to July 29, 2023

Total

Total Number 
of Shares 
Purchased

Average Price 
Paid Per Share

Total Number of 
Shares Purchased as 
Part of Publicly 
Announced Plans or 
Programs

Approximate Dollar 
Value of Shares that 
May Yet be Purchased 
Under the Plans or 
Programs(2)

599,506  $ 

191,115  $ 

—  $ 

790,621  $ 

27.09 

24.59 

— 

26.49 

599,506  $ 

191,115  $ 

—  $ 

790,621  $ 

143 

138 

138 

138 

(1) The reported periods conform to our fiscal calendar.
(2) The amounts shown in this column represent the amount remaining under the 2022 Repurchase Program as of June 3, 2023, July 1, 

2023 and July 29, 2023.

ITEM 6.    RESERVED

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 thereto, “Risk Factors” included in Part I, Item IA, “Cautionary Note Regarding Forward-Looking Statements” and 
other risks described elsewhere in this Annual Report.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This  Annual  Report  contains  forward-looking  statements  within  the  meaning  of  Section  27A  of  the  Securities  Act,  and 
Section  21E  of  the  Exchange  Act,  that  involve  substantial  risks  and  uncertainties.  In  some  cases  you  can  identify  these 
statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” 
“seek,”  “should,”  “will”  and  “would,”  or  similar  words.  Statements  that  contain  these  words  and  other  statements  that  are 
forward-looking  in  nature  should  be  read  carefully  because  they  discuss  future  expectations,  contain  projections  of  future 
results of operations or of financial positions or state other “forward-looking” information.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect. These statements are based 
on our management’s beliefs and assumptions, which are based on currently available information. These assumptions could 
prove inaccurate. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be 
required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the 
occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated 
in these forward-looking statements as a result of various factors, including, but not limited to:

•
•

•
•
•
•
•
•
•

•
•
•
•
•

our dependence on principal customers;
the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense 
competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for 
grocery and consumable purchases;
our ability to realize the anticipated benefits of our transformation initiatives;
changes in relationships with our suppliers;
our ability to operate, and rely on third parties to operate, reliable and secure technology systems;
labor and other workforce shortages and challenges;
the addition or loss of significant customers or material changes to our relationships with these customers;
our ability to realize anticipated benefits of our acquisitions;
our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products, 
and to manage that growth;
our ability to maintain sufficient volume in our wholesale segment to support our operating infrastructure;
the impact and duration of any pandemics or disease outbreaks;
our ability to access additional capital;
increases in healthcare, pension and other costs under our and multiemployer benefit plans;
the potential for additional asset impairment charges;

28

 
 
 
 
 
 
 
 
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•

•

•

our sensitivity to general economic conditions including inflation, changes in disposable income levels and consumer 
purchasing habits;
our ability to timely and successfully deploy our warehouse management system throughout our distribution centers 
and  our  transportation  management  system  across  the  Company  and  to  achieve  efficiencies  and  cost  savings  from 
these efforts;
the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, 
including due to lack of long-term contracts, severe weather, labor shortages or work stoppages or otherwise;

• moderated supplier promotional activity, including decreased forward buying opportunities;
•
•
•

union-organizing activities that could cause labor relations difficulties and increased costs;
our ability to maintain food quality and safety; and
volatility in fuel costs.

You  should  carefully  review  the  risks  described  under  “Risk  Factors”  included  in  Part  I,  Item  1A,  as  well  as  any  other 
cautionary language in this Annual Report, as the occurrence of any of these events could have an adverse effect, which may be 
material, on our business, results of operations, financial condition or cash flows.

EXECUTIVE OVERVIEW

Business Overview

UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States 
and  Canada.  We  believe  we  are  uniquely  positioned  to  provide  the  broadest  array  of  products  and  services  to  customers 
throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the 
largest grocers in the country to smaller independents as well. We offer approximately 250,000 products consisting of national, 
regional  and  private  label  brands  grouped  into  the  following  main  product  categories:  grocery  and  general  merchandise; 
perishables;  frozen  foods;  wellness  and  personal  care  items;  and  bulk  and  foodservice  products.  We  believe  we  are  North 
America’s  premier  grocery  wholesaler  with  55  distribution  centers  and  warehouses  representing  approximately  30  million 
square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in 
Canada,  making  us  a  desirable  partner  for  retailers  and  consumer  product  manufacturers.  We  believe  our  total  product 
assortment  and  service  offerings  are  unmatched  by  our  wholesale  competitors.  We  plan  to  continue  to  pursue  new  business 
opportunities  with  independent  retailers  that  operate  diverse  formats,  regional  and  national  chains,  as  well  as  international 
customers  with  wide-ranging  needs.  Our  business  is  classified  into  two  reportable  segments:  Wholesale  and  Retail;  and  also 
includes a manufacturing division and a branded product line division.

We are focused on executing our transformation strategy, which we believe will position us for long-term profitable growth. 
Our enterprise-wide business transformation strategy consists of four areas, detailed under “Business” included in Part I, Item 1 
of this Annual Report, which represent the next evolution of our business strategy. To enable this business transformation, we 
have  engaged  consultants  and  brought  in  new  leadership  with  transformation  experience  to  upgrade  and  modernize  our 
technology and platforms to better serve our customers.

We  are  also  working  on  near-term  initiatives  to  help  improve  profitability  while  we  execute  our  longer-term  strategy.  These 
include  actioning  administrative  structure  efficiencies,  reprioritizing  our  selling  and  administrative  spending,  optimizing  our 
SKU assortment as well as reviewing commercial contracts in collaboration with our customers and suppliers. 

We expect to continue to use available capital to re-invest in our business and we remain committed to improving our financial 
leverage  and  reducing  outstanding  debt  over  the  long  term.  Since  the  close  of  our  2018  acquisition  of  Supervalu,  we  have 
reduced net debt by $1.4 billion.

We believe we can enhance our profitability and accelerate our growth through our transformation efforts, which we expect will 
improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to 
help our customers run their businesses more efficiently and contribute to customer acquisitions. We believe the key drivers for 
value  creation  will  be  improved  efficiency  through  the  automation  and  optimization  of  our  supply  chain,  as  well  as  new 
customer growth associated with the benefits of our significant scale, product and service offerings and nationwide footprint.

Trends and Other Factors Affecting our Business

Our  results  are  impacted  by  macroeconomic  and  demographic  trends,  changes  in  the  food  distribution  market  structure  and 
changes in consumer behavior. We believe food-at-home expenditures as a percentage of total food expenditures are subject to 
these trends, including changes in consumer behaviors in response to social and economic trends, such as levels of disposable 
income and the health of the economy in which our customers and our stores operate. 

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The U.S. economy has experienced economic volatility in recent years, which has had, and we expect may continue to have, an 
impact on consumer confidence. Consumer spending may be impacted by levels of discretionary income and consumers trading 
down to a less expensive mix of products for grocery items or buying fewer items. In addition, inflation remains at elevated 
levels and continues to be unpredictable. For example, we experienced volatility in our energy operating costs, and fluctuating 
commodity  and  labor  input  costs  continue  to  impact  the  prices  of  products  we  procure  from  manufacturers.  We  believe  our 
product mix, which ranges from high-quality natural and organic products to national and local conventional brands, including 
cost conscious private label brands, positions us to serve a broad cross section of North American retailers and end customers, 
and may lessen the impact of any further shifts in consumer and industry trends in grocery product mix. 

We are also impacted by changes in food distribution trends affecting our Wholesale customers, such as direct store deliveries 
and  other  methods  of  distribution.  Our  Wholesale  customers  manage  their  businesses  independently  and  operate  in  a 
competitive environment. 

Wholesale Distribution Center Network

We evaluate our distribution center network to optimize performance and expect to incur incremental expenses related to any 
future network realignment, expansion or improvements, including initiatives under the network automation and optimization 
pillar of our transformation agenda. We are working to both minimize these potential future costs and obtain new business to 
further  improve  the  efficiency  of  our  transforming  distribution  network.  In  fiscal  2022,  our  Allentown,  Pennsylvania 
distribution  center  began  operations,  with  a  capacity  of  1.3  million  square  feet  to  service  customers  in  the  surrounding 
geographic area. We incurred start-up costs and continue to incur operating losses, as the volume in this facility continues to 
ramp up to its operating capacity. 

Retail Operations 

We  currently  operate  78  retail  grocery  stores,  including  54  Cub  Foods  corporate  stores  and  24  Shoppers  Food  Warehouse 
stores. In addition, we supply another 26 Cub Foods stores operated by our Wholesale customers through franchise and equity 
ownership arrangements. We operate 81 pharmacies primarily within the stores we operate and the stores of our franchisees. In 
addition, we operate 25 “Cub Wine and Spirit” and “Cub Liquor” stores. 

We  plan  to  continue  to  invest  in  our  Retail  segment  in  areas  such  as  customer-facing  merchandising  initiatives,  physical 
facilities,  technology  and  operational  tools.  Cub  Foods  and  Shoppers  Food  Warehouse  anticipate  continued  investment  in 
improving the customer and associate experience through express remodels focused on customer facing elements.

Impact of Product Cost Inflation

We  experienced  a  mix  of  inflation  across  product  categories  during  fiscal  2023.  In  the  aggregate  across  our  businesses, 
including the mix of products, management estimates our businesses experienced product cost inflation of approximately nine 
percent  in  fiscal  2023.  Cost  inflation  estimates  are  based  on  individual  like  items  sold  during  the  periods  being  compared. 
Changes  in  merchandising,  customer  buying  habits  and  competitive  pressures  create  inherent  difficulties  in  measuring  the 
impact of inflation on Net sales and Gross profit. Absent any changes in units sold or the mix of units sold, inflation generally 
has the effect of increasing sales. Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases 
are recognized within Cost of sales based on expected year-end inventory quantities and costs, which generally has the effect of 
decreasing Gross profit and the carrying value of inventory during periods of inflation.

Our pricing to our customers is determined at the time of sale primarily based on the then prevailing vendor listed base cost, 
and includes discounts we offer to our customers. Generally, in an inflationary environment as a wholesaler, rising vendor costs 
result in higher Net sales driven by higher vendor prices when other variables such as quantities sold and vendor promotions are 
constant. In the latter half of fiscal 2023, we experienced fewer and less significant vendor product cost increases as compared 
to fiscal 2022. These decreases negatively impacted our gross profit rate when comparing fiscal 2023 to fiscal 2022.

Composition of Consolidated Statements of Operations and Business Performance Assessment

Net sales
Our Net sales consist primarily of product sales of natural, organic, specialty, produce, and conventional grocery and non-food 
products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional 
services revenue. Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges. 

30

 
 Table of Contents

Cost of sales and Gross profit
The principal components of our Cost of sales include the amounts paid to suppliers for product sold, plus transportation costs 
necessary  to  bring  the  product  to,  or  move  product  between,  our  distribution  centers  and  retail  stores,  partially  offset  by 
consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products. 

Operating expenses
Operating  expenses  include  distribution  expenses  of  warehousing,  delivery,  purchasing,  receiving,  selecting,  and  outbound 
transportation  expenses,  and  selling  and  administrative  expenses.  These  expenses  include  salaries  and  wages,  employee 
benefits, occupancy, insurance, depreciation and amortization expense, and share-based compensation expense. 

Restructuring, acquisition and integration related expenses
Restructuring,  acquisition  and  integration  related  expenses  reflect  expenses  resulting  from  restructuring  activities,  including 
severance  costs,  facility  closure  asset  impairment  charges  and  costs,  share-based  compensation  acceleration  charges  and 
acquisition and integration related expenses. Integration related expenses include certain professional consulting expenses and 
incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Loss (Gain) on Sale of Assets and Other Asset Charges

Loss  (gain)  on  sale  of  assets  and  other  asset  charges  primarily  includes  losses  (gains)  on  sales  of  assets,  losses  on  sales  of 
financial assets, and asset impairments.

Net periodic benefit income, excluding service cost
Net  periodic  benefit  income,  excluding  service  cost  reflects  the  recognition  of  expected  returns  on  benefit  plan  assets  and 
interest costs on plan liabilities.

Interest expense, net
Interest  expense,  net  includes  primarily  interest  expense  on  long-term  debt,  net  of  capitalized  interest,  loss  on  debt 
extinguishment,  interest  expense  on  finance  lease  obligations,  amortization  of  financing  costs  and  discounts,  and  interest 
income. 

Adjusted EBITDA
Our Consolidated Financial Statements are prepared and presented in accordance with generally accepted accounting principles 
in the United States (“GAAP”). In addition to the GAAP results, we consider certain non-GAAP financial measures to assess 
the performance of our business and understand underlying operating performance and core business trends, which we use to 
facilitate operating performance comparisons of our business on a consistent basis over time. Adjusted EBITDA is provided as 
a supplement to our results of operations and related analysis, and should not be considered superior to, a substitute for or an 
alternative  to,  any  financial  measure  of  performance  prepared  and  presented  in  accordance  with  GAAP.  Adjusted  EBITDA 
excludes  certain  items  because  they  are  non-cash  items  or  items  that  do  not  reflect  management’s  assessment  of  ongoing 
business performance. 

We  believe  Adjusted  EBITDA  is  useful  to  investors  and  financial  institutions  because  it  provides  additional  information 
regarding  factors  and  trends  affecting  our  business,  which  are  used  in  the  business  planning  process  to  understand  expected 
operating performance, to evaluate results against those expectations, and because of its importance as a measure of underlying 
operating performance, as the primary compensation performance measure under certain compensation programs and plans. We 
believe  Adjusted  EBITDA  is  reflective  of  factors  that  affect  our  underlying  operating  performance  and  facilitate  operating 
performance  comparisons  of  our  business  on  a  consistent  basis  over  time.  Investors  are  cautioned  that  there  are  material 
limitations  associated  with  the  use  of  non-GAAP  financial  measures  as  an  analytical  tool.  Certain  adjustments  to  our  GAAP 
financial  measures  reflected  below  exclude  items  that  may  be  considered  recurring  in  nature  and  may  be  reflected  in  our 
financial results for the foreseeable future. These measurements and items may be different from non-GAAP financial measures 
used by other companies. Adjusted EBITDA should be reviewed in conjunction with our results reported in accordance with 
GAAP in this Annual Report.

There are significant limitations to using Adjusted EBITDA as a financial measure including, but not limited to, it not reflecting 
the  cost  of  cash  expenditures  for  capital  assets  or  certain  other  contractual  commitments,  finance  lease  obligation  and  debt 
service expenses, income taxes and any impacts from changes in working capital.

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 Table of Contents

We define Adjusted EBITDA as a consolidated measure inclusive of continuing and discontinued operations results, which we 
reconcile by adding Net income (loss) from continuing operations, less Net income attributable to noncontrolling interests, plus 
Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and 
Other  (income)  expense,  net,  plus  Provision  (benefit)  for  income  taxes  and  Depreciation  and  amortization  all  calculated  in 
accordance  with  GAAP,  plus  adjustments  for  Share-based  compensation,  non-cash  LIFO  charge  or  benefit,  Restructuring, 
acquisition  and  integration  related  expenses,  Goodwill  impairment  charges,  Loss  (gain)  on  sale  of  assets  and  other  asset 
charges,  certain  legal  charges  and  gains,  certain  other  non-cash  charges  or  other  items,  as  determined  by  management,  plus 
Adjusted  EBITDA  of  discontinued  operations  calculated  in  a  manner  consistent  with  the  results  of  continuing  operations, 
outlined above. The changes to the definition of Adjusted EBITDA from prior periods reflect changes to line item references in 
our Consolidated Financial Statements, which do not impact the calculation of Adjusted EBITDA.  

Assessment of Our Business Results

The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated. 

(in millions)
Net sales
Cost of sales
Gross profit
Operating expenses
Restructuring, acquisition and integration related expenses
Loss (gain) on sale of assets and other asset charges
Operating income
Net periodic benefit income, excluding service cost
Interest expense, net
Other income, net
Income from continuing operations before income taxes
(Benefit) provision for income taxes
Net income from continuing operations
Income from discontinued operations, net of tax
Net income including noncontrolling interests
Less net income attributable to noncontrolling interests
Net income attributable to United Natural Foods, Inc.

Adjusted EBITDA

2023
(52 weeks)
$ 

2022
(52 weeks)

2021
(52 weeks)

Increase (Decrease)
2022 
2023 
Compared 
Compared 
to 2021
to 2022

30,272  $ 
26,141 
4,131 
3,973 
8 
30 
120 
(29) 
144 
(2) 
7 
(23) 
30 
— 
30 
(6) 
24  $ 

28,928  $ 
24,746 
4,182 
3,825 
21 
(87) 
423 
(40) 
155 
(2) 
310 
56 
254 
— 
254 
(6) 
248  $ 

26,950  $ 
23,011 
3,939 
3,593 
56 
(4) 
294 
(85) 
204 
(8) 
183 
34 
149 
6 
155 
(6) 
149  $ 

1,344  $ 
1,395 
(51) 
148 
(13) 
117 
(303) 
11 
(11) 
— 
(303) 
(79) 
(224) 
— 
(224) 
— 
(224)  $ 

1,978 
1,735 
243 
232 
(35) 
(83) 
129 
45 
(49) 
6 
127 
22 
105 
(6) 
99 
— 
99 

$ 

$ 

640  $ 

829  $ 

770  $ 

(189)  $ 

59 

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The following table reconciles Net income from continuing operations and Income from discontinued operations, net of tax to 
Adjusted EBITDA.

(in millions)
Net income from continuing operations
Adjustments to continuing operations net income:

Less net income attributable to noncontrolling interests
Net periodic benefit income, excluding service cost(1)
Interest expense, net
Other income, net
(Benefit) provision for income taxes
Depreciation and amortization
Share-based compensation
LIFO charge
Restructuring, acquisition and integration related expenses(2)
Loss (gain) on sale of assets and other asset charges(3)
Multiemployer pension plan withdrawal charges (benefit)(4)
Other retail expense(5)
Business transformation costs(6)

Adjusted EBITDA of continuing operations
Adjusted EBITDA of discontinued operations(7)
Adjusted EBITDA

Income from discontinued operations, net of tax(7)
Adjustments to discontinued operations net income:

Benefit for income taxes
Restructuring, store closure and other charges, net(8)

Adjusted EBITDA of discontinued operations(7)

2023
(52 weeks)
$ 

2022
(52 weeks)

2021
(52 weeks)
149 

30  $ 

254  $ 

(6) 
(29) 
144 
(2) 
(23) 
304 
38 
119 
8 
30 
1 
1 
25 
640 
— 
640  $ 

(6) 
(40) 
155 
(2) 
56 
285 
43 
158 
21 
(87) 
(8) 
— 
— 
829 
— 
829  $ 

—  $ 

—  $ 

— 
— 
—  $ 

— 
— 
—  $ 

(6) 
(85) 
204 
(8) 
34 
285 
49 
24 
56 
(4) 
63 
5 
— 
766 
4 
770 

6 

(1) 
(1) 
4 

$ 

$ 

$ 

(1) Fiscal 2021 includes a postretirement settlement gain of $17 million associated with the termination of remaining corporate plans. 
(2) Fiscal  2023  primarily  reflects  severance  costs.  Fiscal  2022  and  fiscal  2021  primarily  reflects  costs  associated  with  advisory  and 
transformational activities to position our business for further value-creation related to integration. In addition, fiscal 2021 includes 
costs  associated  with  distribution  center  consolidations.  Refer  to  Note  4—Restructuring,  Acquisition  and  Integration  Related 
Expenses in Part II, Item 8 of this Annual Report for additional information.

(3) Fiscal 2023 includes a $25 million intangible asset impairment charge attributable to a rationalization of our brands portfolio in an 
effort to focus on our core private brand offerings. Refer to Note 6—Goodwill and Intangible Assets, Net in Part II, Item 8 of this 
Annual Report for additional information. Fiscal 2022 primarily reflects the gain on sale of our Riverside, California distribution 
center in the third quarter of fiscal 2022. 

(4) Fiscal 2023 and fiscal 2022 reflect adjustments to multiemployer withdrawal charge estimates. Fiscal 2021 includes charges related 

to withdrawal liabilities from three Retail multiemployer pension plans. 

(5) Fiscal  2023  reflects  store  closure  charges  and  costs,  operational  wind-down  and  inventory  charges.  Fiscal  2022  and  fiscal  2021 

reflect expenses associated with event-specific damages to certain retail stores. 

(6) Reflects  third-party  costs  primarily  for  business  transformation  initiatives,  including  network  automation  and  optimization, 

commercial value creation, digital offering enhancement and infrastructure unification and modernization.

(7) We believe the inclusion of discontinued operations results within Adjusted EBITDA provides investors a meaningful measure of 

performance.

(8) Amounts represent store closure charges and costs, operational wind-down and inventory charges, asset impairment charges related 

to discontinued operations and income related to a severance benefit.

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The following includes a comparison of our consolidated results of operations, our segment results and financial position 
for fiscal years 2023 and 2022. For a comparison of our consolidated results of operations, segment results and financial 
position  for  fiscal  years  2022  and  2021,  see  Item  7  of  Part  II,  “Management’s  Discussion  and  Analysis  of  Financial 
Condition and Results of Operations”, in our Annual Report on Form 10-K for the fiscal year ended July 30, 2022, filed 
with the Securities and Exchange Commission on September 27, 2022.

RESULTS OF OPERATIONS

Fiscal year ended July 29, 2023 (fiscal 2023) compared to fiscal year ended July 30, 2022 (fiscal 2022)

Net Sales

Our Net sales by customer channel was as follows (in millions except percentages):

Customer Channel(1)
Chains
Independent retailers
Supernatural
Retail
Other
Eliminations
Total net sales

2023
(52 weeks)

2022
(52 weeks)

Increase (Decrease)
%
$

$ 

$ 

12,816  $ 
7,699 
6,374 
2,480 
2,477 
(1,574)   
30,272  $ 

12,562  $ 
7,360 
5,719 
2,468 
2,402 
(1,583)   
28,928  $ 

254 
339 
655 
12 
75 
9 
1,344 

 2.0 %
 4.6 %
 11.5 %
 0.5 %
 3.1 %
 (0.6) %
 4.6 %

(1) Refer  to  Note  3—Revenue  Recognition  in  Part  II,  Item  8  of  this  Annual  Report  for  our  channel  definitions  and  additional 

information.

Our Net sales for fiscal 2023 increased 4.6% from fiscal 2022. The increase in Net sales for fiscal 2023 was primarily driven by 
inflation  and  new  business.  This  new  business  resulted  from  selling  new  or  expanded  categories  to  existing  customers  and 
adding new customers. These increases were partially offset by a decrease in units sold.

Chains Net sales increased primarily due to growth in sales to existing and new customers, including an increase from higher 
product costs, which drove higher wholesale selling prices to our customers, partially offset by a decrease in units sold. 

Independent retailers Net sales increased primarily due to increased sales under a supply agreement with a new customer within 
the East region commencing in the first quarter of fiscal 2022 and growth in sales to existing customers, including an increase 
from higher product costs, which drove higher wholesale selling prices to our customers, partially offset by a decrease in units 
sold.

Supernatural Net sales increased primarily due to growth in existing store sales, including the supply of new fresh categories, 
inflation, and increased sales to new stores, partially offset by a decrease in units sold to existing stores.

Retail Net sales increased primarily due to inflation and new store sales, partially offset by lower volume. Identical store sales 
decreased 0.9%.

Other Net sales increased primarily due to a $49 million increase in sales to Military customers.

Eliminations Net sales primarily relate to Wholesale’s sales to Retail.

Cost of Sales and Gross Profit

Our  Gross  profit  decreased  $51  million,  or  1.2%,  to  $4,131  million  in  fiscal  2023,  from  $4,182  million  in  fiscal  2022.  Our 
Gross profit as a percentage of Net sales decreased to 13.6% in fiscal 2023 compared to 14.5% in fiscal 2022. The LIFO charge 
was  $119  million  and  $158  million  in  fiscal  2023  and  fiscal  2022,  respectively.  Excluding  the  non-cash  LIFO  charge,  gross 
profit  rate  was  14.0%  of  Net  sales  and  15.0%  of  Net  sales  for  fiscal  2023  and  fiscal  2022,  respectively.  The  decrease  in  the 
gross  profit  rate,  excluding  the  LIFO  charge,  was  primarily  driven  by  lower  levels  of  procurement  gains  resulting  from 
decelerating inflation, higher shrink expense and customer mix.

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Operating Expenses

Operating  expenses  increased  $148  million,  or  3.9%,  to  $3,973  million,  or  13.1%  of  Net  sales,  in  fiscal  2023  compared  to 
$3,825  million,  or  13.2%  of  Net  sales,  in  fiscal  2022.  The  decrease  in  Operating  expenses  as  a  percentage  of  Net  sales  was 
primarily  driven  by  approximately  $52  million  lower  incentive  compensation  expense  in  fiscal  2023  resulting  from 
underperformance compared to targets. Excluding incentive compensation expense, Operating expenses as a percentage of Net 
sales were 13.1% and 13.0% in fiscal 2023 and 2022, respectively. The remaining increase in Operating expenses as a percent 
of Net sales was primarily driven by higher occupancy-related costs.

Restructuring, Acquisition and Integration Related Expenses

Restructuring, acquisition and integration related expenses were $8 million for fiscal 2023, compared to $21 million for fiscal 
2022.  Fiscal  2022  expenses  primarily  included  integration  costs  associated  with  transformational  and  advisory  activities  to 
position our business for further value creation.

Loss (Gain) on Sale of Assets and Other Asset Charges

Loss on sale of assets and other asset charges was $30 million in fiscal 2023, compared to a gain on sale of assets of $87 million 
in fiscal 2022. Fiscal 2023 includes a $25 million intangible asset impairment charge related to a rationalization of our brands 
portfolio in an effort to focus on our core private brand offerings. Fiscal 2022 primarily reflects the $87 million gain on sale of 
our Riverside, California distribution center.

Operating Income

Reflecting  the  factors  described  above,  Operating  income  decreased  $303  million  to  $120  million  in  fiscal  2023,  from  $423 
million in fiscal 2022. The decrease in Operating income was primarily driven by an increase in Operating expenses, a loss on 
sale of assets and other asset charges in fiscal 2023 compared to a gain in fiscal 2022 as described above, and a decrease in 
Gross profit, partially offset by lower Restructuring, acquisition and integration related expenses.

Net Periodic Benefit Income, Excluding Service Cost

Net periodic benefit income, excluding service cost decreased $11 million to $29 million in fiscal 2023, from $40 million in 
fiscal 2022. The decrease in Net periodic benefit income, excluding service cost was primarily driven by higher interest costs 
from a higher discount rate utilized in the measurement of pension liabilities, partially offset by $13 million of higher income 
from expected returns on plan assets.

Interest Expense, Net

(in millions)
Interest expense on long-term debt, net of capitalized interest
Interest expense on finance lease obligations
Amortization of financing costs and discounts
Loss on debt extinguishment
Interest income
Interest expense, net

2023
(52 weeks)

2022
(52 weeks)

Increase 
(Decrease)

$ 

$ 

130  $ 
3 
10 
3 
(2)   
144  $ 

126  $ 
11 
12 
7 
(1)   
155  $ 

4 
(8) 
(2) 
(4) 
(1) 
(11) 

The decrease in Interest expense, net for fiscal 2023 compared to fiscal 2022 was primarily driven by lower outstanding debt 
balances and finance leases, partially offset by higher average interest rates.

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(Benefit) Provision for Income Taxes

The effective income tax rate for continuing operations was a benefit rate of 328.6% in fiscal 2023 compared to an expense rate 
of 18.1% in fiscal 2022. For fiscal 2023, the effective tax rate was impacted by solar credits, including the tax credit impact of a 
fiscal  2023  investment  in  an  equity  method  partnership  and  solar  credits  associated  with  a  solar  array  installation  at  the 
Company’s Howell Township, New Jersey facility. The effective tax rate was also impacted by the recognition of previously 
unrecognized tax benefits and excess tax deductions attributable to share-based compensation. The combined impact of these 
fiscal  2023  tax  benefits  exceeded  pre-tax  income,  generating  an  overall  tax  benefit  rate  for  fiscal  2023.  For  fiscal  2022,  the 
effective  tax  rate  was  reduced  by  the  impact  of  discrete  tax  benefits  related  to  employee  stock  awards  and  the  release  of 
unrecognized tax positions, partially offset by non-deductible executive compensation.

Net Income Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, Net income attributable to United Natural Foods, Inc. was $24 million, or 
$0.40 per diluted common share, in fiscal 2023, compared to $248 million, or $4.07 per diluted common share, in fiscal 2022. 

Segment Results of Operations

In evaluating financial performance in each business segment, management primarily uses Net sales and Adjusted EBITDA of 
its  business  segments  as  discussed  and  reconciled  within  Note  16—Business  Segments  within  Part  II,  Item  8  of  this  Annual 
Report  and  the  above  table  within  the  Executive  Overview  section.  The  following  tables  set  forth  Net  sales  and  Adjusted 
EBITDA by segment for the periods indicated.

$ 

(in millions)
Net sales:
Wholesale
Retail
Other
Eliminations
Total Net sales
Continuing operations Adjusted EBITDA:
Wholesale
Retail
Other
Eliminations
Total continuing operations Adjusted EBITDA $ 

$ 

$ 

2023
(52 weeks)

2022
(52 weeks)

2021
(52 weeks)

2023 Compared 
to 2022

2022 Compared 
to 2021

Increase (Decrease)

29,142  $ 
2,480 
224 
(1,574)   
30,272  $ 

27,824  $ 
2,468 
219 
(1,583)   
28,928  $ 

25,873  $ 
2,442 
219 
(1,584)   
26,950  $ 

540  $ 
70 
31 
(1)   
640  $ 

696  $ 
98 
44 
(9)   
829  $ 

677  $ 
98 
(10)   
1 
766  $ 

1,318  $ 
12 
5 
9 
1,344  $ 

(156)  $ 
(28)   
(13)   
8 
(189)  $ 

1,951 
26 
— 
1 
1,978 

19 
— 
54 
(10) 
63 

Net Sales

Wholesale’s  Net  sales  increased  in  fiscal  2023  as  compared  to  fiscal  2022  primarily  due  to  growth  in  the  Supernatural, 
Independent retailers, and Chains channels, as discussed in Results of Operations - Fiscal year ended July 29, 2023 (fiscal 2023) 
compared to fiscal year ended July 30, 2022 (fiscal 2022) - Net Sales section above.

Retail’s Net sales increased for fiscal 2023 as compared to fiscal 2022 primarily due to inflation and new store sales, partially 
offset by lower volume. Identical store sales decreased 0.9%.

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 Table of Contents

Adjusted EBITDA

Wholesale’s Adjusted EBITDA decreased 22% in fiscal 2023 as compared to fiscal 2022. The decrease was driven by a decline 
in gross profit excluding the LIFO charge and an increase in operating expenses. Wholesale’s Gross profit excluding the LIFO 
charge  for  fiscal  2023  decreased  $81  million  and  gross  profit  rate  decreased  87  basis  points  driven  by  lower  levels  of 
procurement  gains  resulting  from  decelerating  inflation,  higher  shrink  expense  and  customer  mix.  Wholesale’s  Operating 
expense increased $75 million, which excludes depreciation and amortization, share-based compensation and other adjustments 
as  outlined  in  Note  16—Business  Segments  in  Part  II,  Item  8  of  this  Annual  Report.  Wholesale’s  operating  expense  rate 
decreased  22  basis  points  primarily  driven  by  lower  incentive  compensation  expense  resulting  from  underperformance 
compared to targets and favorable transportation and distribution center labor costs due to a decrease in volume, partially offset 
by higher occupancy costs. Wholesale’s depreciation expense increased $9 million compared to fiscal 2022.

Retail’s  Adjusted  EBITDA  decreased  29%  in  fiscal  2023  as  compared  to  fiscal  2022.  Retail’s  Gross  profit  dollar  decline 
excluding the LIFO charge in fiscal 2023 was $15 million and its gross profit rate decreased 74 basis points from higher shrink 
expense and increased promotional activity. Retail’s Operating expense increased $13 million, which excludes depreciation and 
amortization, share-based compensation and other adjustments as outlined in Note 16—Business Segments in Part II, Item 8 of 
this Annual Report. Retail’s operating expense rate increased 41 basis points primarily driven by higher employee-related costs 
and new store start-up costs. Retail’s depreciation and amortization expense increased $7 million compared to fiscal 2022.

LIQUIDITY AND CAPITAL RESOURCES

Highlights

•

•

Total liquidity as of July 29, 2023 was $1,517 million and consisted of the following:
◦

Unused  credit  under  our  $2,600  million  asset-based  revolving  credit  facility  (the  “ABL  Credit  Facility”)  was 
$1,480  million  as  of  July  29,  2023,  which  decreased  $147  million  from  $1,627  million  as  of  July  30,  2022, 
primarily  due  to  reduced  total  availability  under  the  ABL  Credit  Facility  driven  by  lower  levels  of  assets 
comprising the facility’s borrowing base.
Cash and cash equivalents was $37 million as of July 29, 2023, which decreased $7 million from $44 million as of 
July 30, 2022.

◦

Our total debt decreased $160 million to $1,963 million as of July 29, 2023 from $2,123 million as of July 30, 2022, 
primarily  driven  by  debt  repayments  from  net  cash  flow  from  operating  activities,  partially  offset  by  payments  for 
capital expenditures, repurchases of common stock and employee restricted stock tax withholdings during fiscal 2023.

•

• Working capital decreased $322 million to $1,058 million as of July 29, 2023 from $1,380 million as of July 30, 2022, 
primarily  due  to  lower  accounts  receivable  levels  resulting  from  the  monetization  of  certain  receivables  and  lower 
inventory levels, partially offset by lower liabilities related to accrued compensation and benefits.
In the second quarter of fiscal 2023, we monetized certain receivables previously presented within accounts receivable, 
pursuant  to  a  purchase  agreement  with  a  third-party  financial  institution  for  the  sale  of  certain  receivables  on  a 
revolving basis up to $300 million. This purchase agreement was subsequently amended in the fourth quarter of fiscal 
2023 to allow the sale of certain receivables up to $350 million. In fiscal 2023, we received net cash proceeds of $287 
million from selling receivables under this agreement, which were used to make a $125 million voluntary prepayment 
on the Term Loan Facility and reduce outstanding borrowings under the ABL Credit Facility.
In  fiscal  2024,  scheduled  debt  maturities  are  expected  to  be  $8  million.  Based  on  our  Consolidated  First  Lien  Net 
Leverage Ratio (as defined in the Term Loan Agreement) at the end of fiscal 2023, no prepayment from Excess Cash 
Flow in fiscal 2023 is required to be made in fiscal 2024.

•

Sources and Uses of Cash

We  expect  to  continue  to  replenish  operating  assets  and  pay  down  debt  obligations  with  internally  generated  funds.  A 
significant reduction in operating earnings or the incurrence of operating losses could have a negative impact on our operating 
cash flow, which may limit our ability to pay down our outstanding indebtedness as planned. Our credit facilities are secured by 
a substantial portion of our total assets. We expect to be able to fund debt maturities and finance lease liabilities through fiscal 
2024 with internally generated funds and borrowings under the ABL Credit Facility.

Our  primary  sources  of  liquidity  are  from  internally  generated  funds  and  from  borrowing  capacity  under  the  ABL  Credit 
Facility. We believe our short-term and long-term financing abilities are adequate as a supplement to internally generated cash 
flows to satisfy debt obligations and fund capital expenditures as opportunities arise. Our continued access to short-term and 
long-term financing through credit markets depends on numerous factors, including the condition of the credit markets and our 
results of operations, cash flows, financial position and credit ratings.

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 Table of Contents

Primary uses of cash include debt service, capital expenditures, working capital maintenance, investments in cloud technologies 
and income tax payments. We typically finance working capital needs with cash provided from operating activities and short-
term borrowings. Inventories are managed primarily through demand forecasting and replenishing depleted inventories.

We currently do not pay a dividend on our common stock. In addition, we are limited in the aggregate amount of dividends that 
we may pay under the terms of our Term Loan Facility, ABL Credit Facility and our $500 million of unsecured 6.750% senior 
notes due October 15, 2028 (the “Senior Notes”). Subject to certain limitations contained in our debt agreements and as market 
conditions warrant, we may from time to time refinance indebtedness that we have incurred, including through the incurrence or 
repayment of loans under existing or new credit facilities or the issuance or repayment of debt securities. Proceeds from the sale 
of any properties mortgaged and encumbered under our Term Loan Facility are required to be used to make additional Term 
Loan Facility payments or to be reinvested in the business.

Long-Term Debt

During fiscal 2023, we made voluntary prepayments of $130 million on the Term Loan Facility with a portion of the proceeds 
received from monetizing certain receivables previously presented within accounts receivable, and from asset sales, and made 
net payments of $28 million on the ABL Credit Facility. Refer to Note 9—Long-Term Debt in Part II, Item 8 of this Annual 
Report for a detailed discussion of the provisions of our credit facilities and certain long-term debt agreements.

Our Term Loan Agreement and Senior Notes do not include any financial maintenance covenants. Our ABL Loan Agreement 
subjects  us  to  a  fixed  charge  coverage  ratio  of  at  least  1.0  to  1.0  calculated  at  the  end  of  each  of  our  fiscal  quarters  on  a 
rolling four quarter basis, if the adjusted aggregate availability is ever less than the greater of (i) $210 million and (ii) 10% of 
the  aggregate  borrowing  base.  We  have  not  been  subject  to  the  fixed  charge  coverage  ratio  covenant  under  the  ABL  Loan 
Agreement, including through the filing date of this Annual Report. The Term Loan Agreement, Senior Notes and ABL Loan 
Agreement contain certain operational and informational covenants customary for debt securities of these types that limit our 
and our restricted subsidiaries’ ability to, among other things, incur debt, declare or pay dividends or make other distributions to 
our stockholders, transfer or sell assets, create liens on our assets, engage in transactions with affiliates, and merge, consolidate 
or sell all or substantially all of our and our subsidiaries’ assets on a consolidated basis. We were in compliance with all such 
covenants for all periods presented. If we fail to comply with any of these covenants, we may be in default under the applicable 
debt agreement, and all amounts due thereunder may become immediately due and payable.

Refer to Note 9—Long-Term Debt in Part II, Item 8 of this Annual Report for further detail of our scheduled debt maturities by 
fiscal year and by debt instrument, which excludes debt prepayments that may be required from Excess Cash Flow (as defined 
in the Term Loan Agreement) generated or sales of mortgaged properties in fiscal 2024 or beyond. Based on our Consolidated 
First Lien Net Leverage Ratio (as defined in the Term Loan Agreement) at the end of fiscal 2023, no prepayment from Excess 
Cash Flow in fiscal 2023 is required to be made in fiscal 2024.

Derivatives and Hedging Activity

We enter into interest rate swap contracts from time to time to mitigate our exposure to changes in market interest rates as part 
of our strategy to manage our debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and 
floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and 
do not constitute positions independent of those exposures.

As  of  July  29,  2023,  we  had  an  aggregate  of  $800  million  of  floating  rate  notional  debt  subject  to  active  interest  rate  swap 
contracts, which effectively hedge the SOFR component of our interest rate payments through pay fixed and receive floating 
interest rate swap agreements. These fixed rates range from 2.360% to 2.875%, with maturities between September 2023 and 
October  2025.  The  fair  values  of  these  interest  rate  derivatives  represent  a  total  net  asset  of  $22  million  and  are  subject  to 
volatility based on changes in market interest rates. In fiscal 2021, we paid $17 million to terminate or novate $1,204 million of 
interest rate swap contracts over our floating rate notional debt. The termination payments reflect the amount of accumulated 
other comprehensive loss that will continue to be amortized into interest expense over the original interest rate swap contract 
terms as long as the hedged interest rate transactions are still probable of occurring. See Note 8—Derivatives in Part II, Item 8 
and —Interest Rate Risk in Part II, Item 7A of this Annual Report for additional information.

From time-to-time, we enter into fixed price fuel supply agreements and foreign currency hedges. As of July 29, 2023, we had 
fixed price fuel contracts and foreign currency forward agreements outstanding. Gains and losses and the outstanding assets and 
liabilities from these arrangements are insignificant.

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 Table of Contents

Payments for Capital Expenditures

Our  capital  expenditures  increased  $72  million  in  fiscal  2023  to  $323  million  compared  to  $251  million  for  fiscal  2022, 
primarily due to automation investments in our supply chain. Our capital spending for fiscal 2023 and 2022 principally included 
information  technology  and  supply  chain  expenditures  including  maintenance  expenditures  and  investments  in  growth 
initiatives. Fiscal 2023 included $290 million of distribution center improvements, technology and other expenditures, and $33 
million  of  Retail  expenditures.  Fiscal  2022  included  $182  million  of  distribution  center  improvements,  technology  and  other 
expenditures, $42 million of investments in new distribution centers, primarily the new Allentown, Pennsylvania distribution 
center, and $27 million of Retail expenditures. Fiscal 2024 capital spending is expected to be approximately $400 million and 
include  projects  that  automate,  optimize  and  expand  our  distribution  network,  and  finance  our  technology  platform 
investments.  We  expect  to  finance  fiscal  2024  capital  expenditures  requirements  with  cash  generated  from  operations  and 
borrowings under our ABL Credit Facility. Future investments may be financed through long-term debt or borrowings under 
our ABL Credit Facility and cash from operations.

Cash Flow Information

The following summarizes our Consolidated Statements of Cash Flows:

(in millions)
Net cash provided by operating activities of continuing 

operations

Net cash used in investing activities of continuing operations
Net cash used in financing activities
Net cash flows from discontinued operations
Effect of exchange rate on cash
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, at beginning of period
Cash and cash equivalents at end of period, including 

discontinued operations

Fiscal 2023 compared to Fiscal 2022

2023
(52 weeks)

2022
(52 weeks)

2021
(52 weeks)

2023

2022

Increase (Decrease)

$ 

624  $ 
(339)   
(292)   
— 
— 
(7)   
44 

331  $ 
(49)   
(279)   
— 
— 
3 
41 

614  $ 
(239)   
(384)   
2 
1 
(6)   
47 

293  $ 
(290)   
(13)   
— 
— 
(10)   
3 

(283) 
190 
105 
(2) 
(1) 
9 
(6) 

$ 

37  $ 

44  $ 

41  $ 

(7)  $ 

3 

The increase in Net cash provided by operating activities of continuing operations was primarily due to lower levels of cash 
utilized in net working capital, including the monetization of certain receivables discussed above, partially offset by lower cash 
generated from net income in fiscal 2023.

The increase in Net cash used in investing activities of continuing operations was primarily due to lower proceeds from asset 
sales,  primarily  due  to  cash  received  from  the  sale  of  the  Riverside,  California  distribution  center  in  fiscal  2022  discussed 
above, and an increase in payments for capital expenditures in fiscal 2023.

The increase in Net cash used in financing activities was primarily due to a net decrease in proceeds from borrowings under the 
revolving credit line and an increase in cash used to repurchase common stock, partially offset by lower levels of repayments of 
long-term debt and finance leases.

Other Obligations and Commitments

Our principal contractual obligations and commitments consist of obligations under our long-term debt, interest on long-term 
debt, operating and finance leases, purchase obligations, self-insurance liabilities and multiemployer plan withdrawal liabilities.

Refer to Note 9—Long-Term Debt, Note 11—Leases, Note 13—Benefit Plans, Note 1—Significant Accounting Policies and 
Note 17—Commitments, Contingencies and Off-Balance Sheet Arrangements to the Consolidated Financial Statements in Part 
II, Item 8 of this Annual Report for more information on the nature and timing of obligations for debt, leases, benefit plans, 
self-insurance and purchase obligations, respectively. The future amount and timing of interest expense payments are expected 
to vary with the amount and then prevailing contractual interest rates over our debt as discussed in Interest Rate Risk in Part II, 
Item 7A of this Annual Report.

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Pension and Other Postretirement Benefit Obligations

We contributed $1 million and $1 million to our defined benefit pension and other postretirement benefit plans, respectively, in 
fiscal 2023. As described in further detail in Note 13—Benefit Plans in Part II, Item 8 of this Annual Report, in fiscal 2022, we 
merged the Unified Grocers, Inc. Cash Balance Plan into the SUPERVALU INC. Retirement Plan. In fiscal 2024, no minimum 
pension contributions are required to be made under the SUPERVALU INC. Retirement Plan under the Employee Retirement 
Income  Security  Act  of  1974,  as  amended  (“ERISA”).  An  insignificant  amount  of  contributions  are  expected  to  be  made  to 
defined benefit pension plans and postretirement benefit plans in fiscal 2024. We fund our defined benefit pension plan based 
on  the  minimum  contribution  required  under  ERISA,  the  Pension  Protection  Act  of  2006  and  other  applicable  laws  and 
additional  contributions  made  at  our  discretion.  We  may  accelerate  contributions  or  undertake  contributions  in  excess  of  the 
minimum requirements from time to time subject to the availability of cash in excess of operating and financing needs or other 
factors  as  may  be  applicable.  We  assess  the  relative  attractiveness  of  the  use  of  cash  to  accelerate  contributions  considering 
such  factors  as  expected  return  on  assets,  discount  rates,  cost  of  debt,  reducing  or  eliminating  required  Pension  Benefit 
Guaranty Corporation variable rate premiums or in order to achieve exemption from participant notices of underfunding.

Off-Balance Sheet Multiemployer Pension Arrangements

We  contribute  to  various  multiemployer  pension  plans  under  collective  bargaining  agreements,  primarily  defined  benefit 
pension  plans.  These  multiemployer  plans  generally  provide  retirement  benefits  to  participants  based  on  their  service  to 
contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible 
for  determining  the  level  of  benefits  to  be  provided  to  participants  as  well  as  the  investment  of  the  assets  and  plan 
administration.  Trustees  are  appointed  in  equal  number  by  employers  and  unions  that  are  parties  to  the  relevant  collective 
bargaining  agreements.  Based  on  the  assessment  of  the  most  recent  information  available  from  the  multiemployer  plans,  we 
believe that most of the plans to which we contribute are underfunded. We are only one of a number of employers contributing 
to these plans and the underfunding is not a direct obligation or liability to us. 

Our contributions can fluctuate from year to year due to store closures, employer participation within the respective plans and 
reductions in headcount. Our contributions to these plans could increase in the near term. However, the amount of any increase 
or  decrease  in  contributions  will  depend  on  a  variety  of  factors,  including  the  results  of  our  collective  bargaining  efforts, 
investment returns on the assets held in the plans, actions taken by the trustees who manage the plans and requirements under 
the Pension Protection Act of 2006, the Multiemployer Pension Reform Act and Section 412(e) of the Internal Revenue Code. 
Furthermore, if we were to significantly reduce contributions, exit certain markets or otherwise cease making contributions to 
these plans, we could trigger a partial or complete withdrawal that could require us to record a withdrawal liability obligation 
and make withdrawal liability payments to the fund. Expense is recognized in connection with these plans as contributions are 
funded, in accordance with GAAP. We made contributions to these plans, and recognized expense of $48 million, $45 million 
and $48 million in fiscal 2023, 2022 and 2021, respectively. In fiscal 2024, we expect to contribute approximately $50 million 
to multiemployer plans, subject to the outcome of collective bargaining and capital market conditions. We expect required cash 
payments to fund multiemployer pension plans from which we have withdrawn to be insignificant in any one fiscal year, which 
would exclude any payments that may be agreed to on a lump sum basis to satisfy existing withdrawal liabilities. Any future 
withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance 
with  GAAP.  Any  triggered  withdrawal  obligation  could  result  in  a  material  charge  and  payment  obligations  that  would  be 
required to be made over an extended period of time. 

We also make contributions to multiemployer health and welfare plans in amounts set forth in the related collective bargaining 
agreements. A small minority of collective bargaining agreements contain reserve requirements that may trigger unanticipated 
contributions resulting in increased healthcare expenses. If these healthcare provisions cannot be renegotiated in a manner that 
reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future. 

Refer to Note 13—Benefit Plans in Part II, Item 8 of this Annual Report for additional information regarding the plans in which 
we participate.

Share Repurchases

In September 2022, our Board of Directors authorized a new repurchase program for up to $200 million of our common stock 
over  a  term  of  four  years  (the  “2022  Repurchase  Program”).  Under  the  2022  Repurchase  Program,  we  repurchased 
approximately 1,888,000 shares of our common stock for a total cost of $62 million in fiscal 2023. We did not repurchase any 
shares of our common stock in fiscal 2022 or 2021. As of July 29, 2023, we had $138 million remaining authorized under the 
2022 Repurchase Program. 

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We  will  manage  the  timing  of  any  repurchases  of  our  common  stock  in  response  to  market  conditions  and  other  relevant 
factors, including any limitations on our ability to make repurchases under the terms of our ABL Credit Facility, Term Loan 
Facility and Senior Notes. We may implement the 2022 Repurchase Program pursuant to a plan or plans meeting the conditions 
of Rule 10b5-1 under the Exchange Act.

CRITICAL ACCOUNTING ESTIMATES

The 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 the related disclosure of contingent assets and liabilities. Management 
believes the following critical accounting estimates reflect our more subjective or complex judgments and estimates used in the 
preparation of our Consolidated Financial Statements.

Inventories 

Inventories are valued at the lower of cost or market. Substantially all of our inventories consist of finished goods. Inventories 
are recorded net of vendor allowances and cash discounts. We evaluate inventory shortages (shrink) throughout each fiscal year 
based on actual physical counts in our facilities. The majority of our inventory is valued under the LIFO method, which allows 
for matching of costs and revenues, as the current acquisition cost is used to value cost of goods sold as inventory is sold in an 
inflationary environment. If the first-in, first-out (“FIFO”) method had been used, Inventories, net, would have been higher by 
approximately  $344  million  and  $225  million  at  July  29,  2023  and  July  30,  2022,  respectively.  As  of  July  29,  2023, 
approximately 2.0 billion or 81% of inventory was valued under the LIFO method, before the application of any LIFO reserve, 
and primarily included grocery, frozen food and general merchandise products, with the remaining inventory valued under the 
first-in, first-out method and primarily included meat, dairy and deli products. When holding inventory levels and mix constant, 
as of July 29, 2023, we estimate a 50 basis point increase in the inflation rate on our ending LIFO-based inventory would result 
in an $8 million increase in the LIFO charge on an annualized basis.

Vendor funds

We receive funds from many of the vendors whose products we buy for resale. These vendor funds are generally provided to 
increase  the  purchasing  and  sell-through  of  the  related  products.  We  receive  vendor  funds  for  a  variety  of  merchandising 
activities: placement of the vendors’ products in our advertising; display of the vendors’ products in prominent locations in our 
stores;  support  for  the  introduction  of  new  products  into  our  stores  and  distribution  centers;  exclusivity  rights  in  certain 
categories; and compensation for temporary price reductions offered on products held for sale. We also receive vendor funds 
for  buying  activities  such  as  volume  commitment  rebates,  credits  for  purchasing  products  in  advance  of  their  need  and  cash 
discounts for the early payment of merchandise purchases. The majority of our vendor fund contracts have terms of less than a 
year, although some of the contracts have terms of longer than one year.

We  recognize  vendor  funds  for  merchandising  activities  as  a  reduction  of  Cost  of  sales  when  the  related  products  are  sold, 
unless  it  has  been  determined  that  a  discrete  identifiable  benefit  has  been  provided  to  the  vendor,  in  which  case  the  related 
amounts are recognized within Net sales and represent less than 0.5% of total Net sales. Vendor funds that have been earned as 
a result of completing the required performance under the terms of the underlying agreements but for which the product has not 
yet been sold are recognized as reductions to the value of on-hand inventory.

The amount and timing of recognition of vendor funds as well as the amount of vendor funds to be recognized as a reduction to 
ending inventory requires management judgment and estimates. Management determines these amounts based on estimates of 
current  year  purchase  volume  using  forecast  and  historical  data  and  a  review  of  average  inventory  turnover  data.  These 
judgments and estimates impact our reported Gross profit, Operating income and inventory amounts. The historical estimates 
have been reliable in the past, and we believe our methodology will continue to be reliable in the future. Based on previous 
experience, we do not expect significant changes in the level of vendor support. However, if such changes were to occur, Cost 
of  sales  and  Net  sales  could  change,  depending  on  the  specific  vendors  involved.  If  vendor  advertising  allowances  were 
substantially  reduced  or  eliminated,  we  would  consider  changing  the  volume,  type  and  frequency  of  the  advertising,  which 
could increase or decrease our advertising expense. 

Benefit plans

We sponsor pension and other postretirement plans in various forms covering substantially all employees who meet eligibility 
requirements.  Pension  benefits  associated  with  these  plans  are  generally  based  on  each  participant’s  years  of  service, 
compensation,  and  age  at  retirement  or  termination.  Our  defined  benefit  pension  plan  and  certain  supplemental  executive 
retirement plans are closed to new participants and service crediting.

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While we believe the valuation methods used to determine the fair value of plan assets are appropriate and consistent with other 
market  participants,  the  use  of  different  methodologies  or  assumptions  to  determine  the  fair  value  of  certain  financial 
instruments could result in a different estimate of fair value at the reporting date.

The determination of our obligation and related expense for Company-sponsored pension and other postretirement benefits is 
dependent,  in  part,  on  management’s  selection  of  certain  actuarial  assumptions  used  in  calculating  these  amounts.  These 
assumptions  include,  among  other  things,  the  discount  rate  and  the  expected  long-term  rate  of  return  on  plan  assets.  We 
measure  our  defined  benefit  pension  and  other  postretirement  plan  obligations  as  of  the  nearest  calendar  month  end.  Refer 
to Note 13—Benefit Plans in Part II, Item 8 of this Annual Report for information related to the actuarial assumptions used in 
determining pension and postretirement healthcare liabilities and expenses. 

Discount rates

We review and select the discount rate to be used in connection with our pension and other postretirement obligations annually. 
The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. 
We set our rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows 
sufficient in timing and amount to settle projected future benefits.

We utilize the “full yield curve” approach for determining the interest and service cost components of net periodic benefit cost 
for defined benefit pension and other postretirement benefit plans. Under this method, the discount rate assumption used in the 
interest and service cost components of net periodic benefit cost is built through applying the specific spot rates along the yield 
curve  used  in  the  determination  of  the  benefit  obligation  described  above,  to  the  relevant  projected  future  cash  flows  of  our 
pension and other postretirement benefit plans. We believe the “full yield curve” approach reflects a greater correlation between 
projected benefit cash flows and the corresponding yield curve spot rates and provides a more precise measurement of interest 
and service costs. Each 25-basis point reduction in the discount rate would increase our projected pension benefit obligation by 
$37 million, as of July 29, 2023, and for fiscal 2023 would increase Net periodic benefit income by approximately $3 million.

Expected rate of return on plan assets

Our  expected  long-term  rate  of  return  on  plan  assets  assumption  is  determined  based  on  the  portfolio’s  actual  and  target 
composition,  current  market  conditions,  forward-looking  return  and  risk  assumptions  by  asset  class,  and  historical  long-term 
investment performance. The assumed long-term rate of return on pension assets was 6.00% for fiscal 2023. The 10-year rolling 
average annualized return for the SUPERVALU INC. Retirement Plan is approximately 7.9% based on returns from 2014 to 
2023.  Each  25-basis  point  reduction  in  expected  return  on  plan  assets  would  decrease  Net  periodic  benefit  income  for  fiscal 
2023 by approximately $4 million.

Amortizing gains and losses

In accordance with GAAP, actual results that differ from our assumptions are accumulated and amortized over future periods 
and,  therefore,  affect  expense  and  obligations  in  future  periods.  We  recognize  the  amortization  of  net  actuarial  loss  on  the 
SUPERVALU INC. Retirement Plan over the remaining life expectancy of inactive participants based on our determination that 
almost  all  of  the  defined  benefit  pension  plan  participants  are  inactive  and  the  plan  is  frozen  to  new  participants.  For  the 
purposes of inactive participants, we utilized a 90% threshold established under our policy. 

Multiemployer pension plans

We  contribute  to  various  multiemployer  pension  plans  based  on  obligations  arising  from  collective  bargaining  agreements. 
These multiemployer pension plans provide retirement benefits to participants based on their service to contributing employers. 
The benefits are paid from assets held in trust for that purpose. Trustees are typically responsible for determining the level of 
benefits to be provided to participants as well as such matters as the investment of the assets and the administration of the plans. 

We  continue  to  evaluate  and  address  our  potential  exposure  to  underfunded  multiemployer  pension  plans  as  it  relates  to  our 
associates who are or were beneficiaries of these plans. In the future, we may consider opportunities to limit the Company’s 
exposure  to  underfunded  multiemployer  pension  obligations  by  moving  our  active  associates  in  such  plans  to  defined 
contribution plans, and withdrawing from the pension plan or continuing to participate in the plans for prior obligations. As we 
continue  to  work  to  find  solutions  to  underfunded  multiemployer  pension  plans,  it  is  possible  we  could  incur  withdrawal 
liabilities  for  certain  additional  multiemployer  pension  plan  obligations  in  the  future  as  we  actively  negotiate  new  collective 
bargaining agreements with a number of our unions in due course. 

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The  American  Rescue  Plan  Act  (“ARPA”)  established  the  Special  Financial  Assistance  (“SFA”)  Program  for  financially 
troubled  multi-employer  pension  plans.  Under  ARPA,  eligible  multiemployer  pension  plans  can  apply  to  receive  a  cash 
payment  in  an  amount  projected  by  the  Pension  Benefit  Guaranty  Corporation  to  remain  solvent  and  pay  pension  benefits 
through the plan year ending 2051. As of the end of fiscal 2023, one plan to which the Company contributes has received SFA, 
and two other plans to which the Company contributes are currently on the waiting list to apply for SFA funding. We continue 
to evaluate our exposure to underfunded multiemployer pension plans. Although these liabilities are not a direct obligation or 
liability of ours, addressing these uncertainties requires judgment in the timing of expense recognition when we determine our 
commitment is probable and estimable.

In fiscal 2021, we incurred a $63 million charge for obligations related to withdrawal liabilities for three Retail multiemployer 
pension plans where our active associates moved to defined contribution plans for future benefits.

Refer to Note 13—Benefit Plans in Part II, Item 8 of this Annual Report for more information relating to our participation in 
these  multiemployer  pension  plans  and  to  the  actuarial  assumptions  used  in  determining  pension  and  other  postretirement 
liabilities and expenses.

Self-insurance liabilities

We are primarily self-insured for workers’ compensation, general and automobile liability insurance. It is our policy to record 
the  self-insured  portions  of  our  workers’  compensation,  general  and  automobile  liabilities  based  upon  actuarial  methods  of 
estimating the future cost of claims and related expenses that have been reported but not settled, and that have been incurred but 
not yet reported. Any projection of losses concerning these liabilities 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 additional 
costs could be recorded in our Consolidated Financial Statements. Accruals for workers’ compensation, general and automobile 
liabilities totaled $97 million and $98 million as of July 29, 2023 and July 30, 2022, respectively.

Recoverability of long-lived assets

We review long-lived assets, including definite-lived intangible assets at least annually, and on an interim basis if events occur 
or changes in circumstances indicate that the carrying value of the assets may not be recoverable. We evaluate these assets at 
the asset-group level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of 
other assets and liabilities. Cash flows expected to be generated by the related assets are estimated over the assets’ useful lives 
based on updated projections. When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, 
the fair value is compared to the carrying value to determine the loss to be recorded. 

Estimates of future cash flows and expected sales prices are judgments based on the Company’s experience and knowledge of 
operations.  These  estimates  project  cash  flows  several  years  into  the  future  and  include  assumptions  on  variables  such  as 
changes in supply contracts, macroeconomic impacts and market competition.

As part of our annual impairment assessment, we recognized a $25 million intangible asset impairment charge associated with 
the rationalization of our brands portfolio in an effort to focus on our core private brand offerings.

Income taxes

The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax 
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured 
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be 
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized within the provision 
for income tax in the period that includes the enactment date.

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The calculation of the Company’s tax liabilities includes addressing uncertainties in the application of complex tax regulations 
and is based on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax 
return.  Addressing  these  uncertainties  requires  judgment  and  estimates;  however,  actual  results  could  differ,  and  we  may  be 
exposed to losses or gains. Our effective tax rate in a given financial statement period could be affected based on favorable or 
unfavorable tax settlements. Unfavorable tax settlements will generally require the use of cash and may result in an increase to 
our effective tax rate in the period of resolution. Favorable tax settlements may be recognized as a reduction to our effective tax 
rate in the period of resolution.

The Company regularly reviews its deferred tax assets for recoverability to evaluate whether it is more likely than not that they 
will  be  realized.  In  making  this  evaluation,  the  Company  considers  the  statutory  recovery  periods  for  the  assets,  along  with 
available  sources  of  future  taxable  income,  including  reversals  of  existing  and  future  taxable  temporary  differences,  tax 
planning  strategies,  history  of  taxable  income  and  projections  of  future  income.  The  Company  gives  more  significance  to 
objectively  verifiable  evidence,  such  as  the  existence  of  deferred  tax  liabilities  that  are  forecast  to  generate  taxable  income 
within  the  relevant  carryover  periods  and  a  history  of  earnings.  A  valuation  allowance  is  provided  when  the  Company 
concludes, based on all available evidence, that it is more likely than not that the deferred tax assets will not be realized during 
the applicable recovery period.

Recently Issued Financial Accounting Standards

For a discussion of recently issued financial accounting standards, refer to Note 2—Recently Adopted and Issued Accounting 
Pronouncements in Part II, Item 8 of this Annual Report.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a number of market related risks, including changes in interest rates, fuel prices, foreign exchange rates and 
changes in the market price of investments held in our master trust used to fund defined benefit pension obligations. We have 
historically  employed  financial  derivative  instruments  from  time  to  time  to  reduce  these  risks.  We  do  not  use  financial 
instruments or derivatives for any trading or other speculative purposes. We currently utilize derivative financial instruments to 
reduce the market risks related to changes in interest rates, fuel prices and foreign exchange rates.

Interest Rate Risk

We  are  exposed  to  market  pricing  risk  consisting  of  interest  rate  risk  related  to  certain  of  our  debt  instruments  and  notes 
receivable  outstanding.  Our  debt  obligations  are  more  fully  described  in  Note  9—Long-Term  Debt  to  the  Consolidated 
Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report. Interest rate risk 
is managed through the strategic use of fixed and variable rate debt and derivative instruments. As more fully described in Note 
8—Derivatives to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of 
this Annual Report, we have used interest rate swap agreements to mitigate our exposure to adverse changes in interest rates by 
effectively converting certain of our variable rate obligations to fixed rate obligations. These interest rate swaps are derivative 
instruments  designated  as  cash  flow  hedges  on  the  forecasted  interest  payments  related  to  a  certain  portion  of  our  debt 
obligations. Our variable rate borrowings consist primarily of SOFR-based loans, which is the benchmark interest rate being 
hedged in our interest rate swap agreements. 

Changes in interest rates could also affect the interest rates we pay on future borrowings under our ABL Credit Facility and 
Term Loan Facility, which rates are typically related to SOFR. As of July 29, 2023, we estimate that a 100-basis point increase 
in the interest rates related to our variable rate borrowings would increase our annualized Interest expense by approximately $7 
million, net of the floating interest rate receivable on our interest rate swaps. Changes in interest rates related to our fixed rate 
debt  instruments  would  not  have  an  impact  upon  future  results  of  operations  or  cash  flows  while  outstanding;  however,  if 
additional debt issuances at higher interest rates are required to fund fixed rate debt maturities, future results of operations or 
cash flows may be impacted.

As of July 29, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate 
swaps by approximately $8 million; while a 100-basis point decrease in forward SOFR interest rates would decrease the fair 
value  of  the  interest  rate  swaps  by  approximately  $8  million.  Refer  to  Note  8—Derivatives  in  Part  II,  Item  8  of  this  Annual 
Report for further information on interest rate swap contracts.

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The table below provides information about our financial instruments that are sensitive to changes in interest rates, including 
debt  obligations  and  interest  rate  swaps.  For  debt  obligations,  the  table  presents  principal  amounts  due  and  related  weighted 
average  interest  rates  by  expected  maturity  dates  using  interest  rates  as  of  July  29,  2023,  excluding  any  original  issue  and 
purchase accounting discounts and deferred financing costs. For interest rate swaps, the table presents the notional amounts and 
related weighted average interest rates by maturity.

July 29, 2023

Expected Fiscal Year of Maturity

Fair Value

Total

2024

2025

2026

2027

2028

Thereafter

(in millions, except interest rates)

$ 

1,483  $  1,482 

$  — 

$  — 

$  670 

$  812 

$  — 

$  — 

 7.3 %

$ 

421  $  509 

$ 

 6.7 %

 — %
8 
 4.8 %

$ 

 — %
1 
 4.4 %

 8.5 %

 6.3 %

 — %

 — %

$  — 

$  — 

$  — 

$  500 

 — %

 — %

 — %

 6.8 %

Long-term Debt:
Variable rate—principal payments
Weighted average interest rate(1)
Fixed rate—principal payments
Weighted average interest rate
Interest Rate Swaps(2):
Notional amounts hedged under pay 

fixed, receive variable swaps

$ 

21  $  800 

$  350 

$  250 

$  200 

$  — 

$  — 

$  — 

Weighted average pay rate
Weighted average receive rate

 2.6 %
 4.8 %

 2.5 %
 5.3 %

 2.5 %
 5.1 %

 2.8 %
 4.5 %

 — %
 — %

 — %
 — %

 — %
 — %

(1) Excludes the effect of interest rate swaps effectively converting certain of our variable rate obligations to fixed rate obligations.

(2) Refer to Note 8—Derivatives in Part II, Item 8 of this Annual Report for further information on interest rate swap contracts.

Investment Risk

The  SUPERVALU  INC.  Retirement  Plan  holds  investments  in  fixed  income  securities,  domestic  equity  securities,  private 
equity securities, international equity securities and real estate securities, which is described further in Note 13—Benefit Plans 
in Part II, Item 8 of this Annual Report. Changes in SUPERVALU INC. Retirement Plan assets can affect the amount of our 
anticipated future contributions. In addition, increases or decreases in SUPERVALU INC. Retirement Plan assets can result in a 
related  increase  or  decrease  to  our  equity  through  Accumulated  other  comprehensive  loss.  In  fiscal  2022,  as  the  plan 
administrator,  we  took  additional  steps  to  de-risk  the  investments  in  the  plan  assets  as  its  funding  level  increased.  This  de-
risking  included  a  further  shift  to  fixed  income  investments.  Given  the  relationships  between  discount  rates  that  impact  the 
valuation of fixed income plan assets and the impact of discount rates in measuring plan obligations, the SUPERVALU INC. 
Retirement Plan is subject to less volatility in the net plan assets. As of July 29, 2023, a 10% unfavorable change in the total 
value of investments held by the SUPERVALU INC. Retirement Plan (entirely within the return-seeking portion of the plan 
assets) would not have had an impact on our minimum contributions required under ERISA for fiscal 2023, but would have 
resulted  in  an  unfavorable  change  in  net  periodic  pension  income  for  fiscal  2024  of  $2  million  and  would  have  reduced 
Stockholders’ equity by $156 million on a pre-tax basis as of July 29, 2023.

Fuel Price and Foreign Exchange Risk

To reduce diesel price risk, we have entered into derivative financial instruments and/or forward purchase commitments for a 
portion of our projected monthly diesel fuel requirements at fixed prices primarily related to inbound transportation. To reduce 
foreign  exchange  risk,  we  have  entered  into  derivative  financial  instruments  for  a  portion  of  our  projected  monthly  foreign 
currency requirements at fixed prices. The fair values of fuel derivative and foreign exchange agreements are measured using 
Level  2  inputs.  As  of  July  29,  2023,  the  fair  value  and  expected  exposure  risk  based  on  aggregate  notional  values  are 
insignificant.

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID: 185)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

All other schedules are omitted because they are not applicable or not required.

Page

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50

51

52

53

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
United Natural Foods, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting 

We have audited the accompanying consolidated balance sheets of United Natural Foods, Inc. and subsidiaries (the Company) 
as of July 29, 2023 and July 30, 2022, the related consolidated statements of operations, comprehensive income, stockholders’ 
equity, and cash flows for each of the years in the three-year period ended July 29, 2023, and the related notes (collectively, the 
consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of July 29, 
2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission.

In  our  opinion,  the  consolidated  financial  statements  referred  to  above  present  fairly,  in  all  material  respects,  the  financial 
position of the Company as of July 29, 2023 and July 30, 2022, and the results of its operations and its cash flows for each of 
the years in the three-year period ended July 29, 2023, in conformity with U.S. generally accepted accounting principles. Also 
in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 
29,  2023,  based  on  criteria  established  in  Internal  Control  –  Integrated  Framework  (2013)  issued  by  the  Committee  of 
Sponsoring Organizations of the Treadway Commission. 

Basis for Opinions 

The  Company’s  management  is  responsible  for  these  consolidated  financial  statements,  for  maintaining  effective  internal 
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included 
in  the  accompanying  Management’s  Annual  Report  on  Internal  Control  over  Financial  Reporting.  Our  responsibility  is  to 
express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over 
financial  reporting  based  on  our  audits.  We  are  a  public  accounting  firm  registered  with  the  Public  Company  Accounting 
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with 
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the 
PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audits  to  obtain  reasonable  assurance  about  whether  the  consolidated  financial  statements  are  free  of  material  misstatement, 
whether  due  to  error  or  fraud,  and  whether  effective  internal  control  over  financial  reporting  was  maintained  in  all  material 
respects. 

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement 
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. 
Such  procedures  included  examining,  on  a  test  basis,  evidence  regarding  the  amounts  and  disclosures  in  the  consolidated 
financial  statements.  Our  audits  also  included  evaluating  the  accounting  principles  used  and  significant  estimates  made  by 
management,  as  well  as  evaluating  the  overall  presentation  of  the  consolidated  financial  statements.  Our  audit  of  internal 
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the 
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based 
on  the  assessed  risk.  Our  audits  also  included  performing  such  other  procedures  as  we  considered  necessary  in  the 
circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting 

A  company’s  internal  control  over  financial  reporting  is  a  process  designed  to  provide  reasonable  assurance  regarding  the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted  accounting  principles.  A  company’s  internal  control  over  financial  reporting  includes  those  policies  and  procedures 
that  (1)  pertain  to  the  maintenance  of  records  that,  in  reasonable  detail,  accurately  and  fairly  reflect  the  transactions  and 
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit 
preparation  of  financial  statements  in  accordance  with  generally  accepted  accounting  principles,  and  that  receipts  and 
expenditures  of  the  company  are  being  made  only  in  accordance  with  authorizations  of  management  and  directors  of  the 
company;  and  (3)  provide  reasonable  assurance  regarding  prevention  or  timely  detection  of  unauthorized  acquisition,  use,  or 
disposition of the company’s assets that could have a material effect on the financial statements.

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 Table of Contents

Because  of  its  inherent  limitations,  internal  control  over  financial  reporting  may  not  prevent  or  detect  misstatements.  Also, 
projections  of  any  evaluation  of  effectiveness  to  future  periods  are  subject  to  the  risk  that  controls  may  become  inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The  critical  audit  matter  communicated  below  is  a  matter  arising  from  the  current  period  audit  of  the  consolidated  financial 
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or 
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or 
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated 
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate 
opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the value of the defined benefit pension obligation

As  discussed  in  Note  13  to  the  consolidated  financial  statements,  the  Company  sponsors  a  defined  benefit  pension 
plan, covering primarily former Supervalu employees who meet certain eligibility requirements. The fair value of the 
defined  benefit  pension  obligation  at  year  end  was  $1.54  billion,  offset  by  plan  assets  totaling  $1.56  billion.  The 
determination of the Company’s defined benefit pension obligation with respect to the plan is dependent, in part, on 
the selection of certain actuarial assumptions, including the discount rate used.

We identified the assessment of the value of the defined benefit pension obligation as a critical audit matter because of 
the subjectivity in evaluating the discount rate used, and the impact small changes in this assumption would have on 
the measurement of the defined benefit pension obligation. Additionally, the audit effort associated with the evaluation 
of the discount rate required specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design 
and  tested  the  operating  effectiveness  of  certain  internal  controls  related  to  the  Company’s  defined  benefit  pension 
obligation  process,  including  a  control  related  to  the  development  of  the  discount  rate  used.  We  compared  the 
methodology  used  in  the  current  year  to  develop  the  discount  rate  to  the  methodology  used  in  prior  periods.  In 
addition, we involved an actuarial professional with specialized skills and knowledge, who assisted in the evaluation of 
the  Company’s  discount  rate  by  evaluating  the  methodology  utilized  by  the  Company  and  assessing  the  selected 
discount rate against publicly available discount rate benchmark information.

/s/ KPMG LLP

We have served as the Company’s auditor since 1993.

Providence, Rhode Island
September 26, 2023

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except for par values)

July 29,
2023

July 30,
2022

ASSETS

Cash and cash equivalents
Accounts receivable, net 
Inventories, net
Prepaid expenses and other current assets

Total current assets

Property and equipment, net
Operating lease assets
Goodwill
Intangible assets, net 
Deferred income taxes
Other long-term assets
Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable
Accrued expenses and other current liabilities
Accrued compensation and benefits
Current portion of operating lease liabilities
Current portion of long-term debt and finance lease liabilities

Total current liabilities

Long-term debt
Long-term operating lease liabilities
Long-term finance lease liabilities
Pension and other postretirement benefit obligations
Deferred income taxes
Other long-term liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5.0 shares; none issued or outstanding
Common stock, $0.01 par value, authorized 100.0 shares; 61.0 shares issued and 58.5 shares 
outstanding at July 29, 2023; 58.9 shares issued and 58.3 shares outstanding at July 30, 2022
Additional paid-in capital
Treasury stock at cost
Accumulated other comprehensive loss
Retained earnings

Total United Natural Foods, Inc. stockholders’ equity

Noncontrolling interests
Total stockholders’ equity
Total liabilities and stockholders’ equity

$ 

$ 

$ 

$ 

37  $ 
889 
2,292 
245 
3,463 
1,767 
1,228 
20 
722 
32 
162 
7,394  $ 

1,781  $ 
283 
143 
180 
18 
2,405 
1,956 
1,099 
12 
16 
— 
162 
5,650 

— 

1 
606 
(86) 
(28) 
1,250 
1,743 
1 
1,744 
7,394  $ 

44 
1,214 
2,355 
184 
3,797 
1,690 
1,176 
20 
819 
— 
126 
7,628 

1,742 
260 
232 
156 
27 
2,417 
2,109 
1,067 
23 
18 
8 
194 
5,836 

— 

1 
608 
(24) 
(20) 
1,226 
1,791 
1 
1,792 
7,628 

See accompanying Notes to Consolidated Financial Statements.

49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except for per share data)

 Table of Contents

Net sales

Cost of sales

Gross profit

Operating expenses

Restructuring, acquisition and integration related expenses

Loss (gain) on sale of assets and other asset charges

Operating income

Net periodic benefit income, excluding service cost

Interest expense, net

Other income, net

Income from continuing operations before income taxes

(Benefit) provision for income taxes

Net income from continuing operations

Income from discontinued operations, net of tax

Net income including noncontrolling interests

Less net income attributable to noncontrolling interests

Net income attributable to United Natural Foods, Inc.

Basic earnings per share:

Continuing operations

Discontinued operations

Basic earnings per share

Diluted earnings per share:

Continuing operations

Discontinued operations

Diluted earnings per share

Weighted average shares outstanding:

Basic

Diluted

Fiscal Year Ended

July 29, 2023
(52 weeks)

July 30, 2022
(52 weeks)

July 31, 2021
(52 weeks)

$ 

30,272  $ 

28,928  $ 

26,141 

4,131 

3,973 

24,746 

4,182 

3,825 

26,950 

23,011 

3,939 

3,593 

8 

30 

120 

(29) 

144 

(2) 

7 

(23) 

30 

— 

30 

(6) 

21 

(87) 

423 

(40) 

155 

(2) 

310 

56 

254 

— 

254 

(6) 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

24  $ 

248  $ 

0.41  $ 

—  $ 

0.41  $ 

0.40  $ 

—  $ 

0.40  $ 

59.2 

60.7 

4.28  $ 

—  $ 

4.28  $ 

4.07  $ 

—  $ 

4.07  $ 

58.0 

61.0 

56 

(4) 

294 

(85) 

204 

(8) 

183 

34 

149 

6 

155 

(6) 

149 

2.55 

0.10 

2.65 

2.38 

0.09 

2.48 

56.1 

60.0 

See accompanying Notes to Consolidated Financial Statements.

50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

July 29, 2023
(52 weeks)

Fiscal Year Ended
July 30, 2022
(52 weeks)

July 31, 2021
(52 weeks)

Net income including noncontrolling interests
Other comprehensive (loss) income:

$ 

30  $ 

254  $ 

Recognition of pension and other postretirement benefit obligations, net of tax(1)
Recognition of interest rate swap cash flow hedges, net of tax(2)
Foreign currency translation adjustments
Recognition of other cash flow derivatives, net of tax(3)

Total other comprehensive (loss) income
Less comprehensive income attributable to noncontrolling interests
Total comprehensive income attributable to United Natural Foods, Inc.

$ 

(18) 
14 
(2) 
(2) 
(8) 
(6) 
16  $ 

(40) 
60 
(3) 
2 
19 
(6) 
267  $ 

155 

153 
42 
5 
— 
200 
(6) 
349 

(1) Amounts are net of tax (benefit) expense of $(7) million, $(12) million and $52 million, respectively.

(2) Amounts are net of tax (benefit) expense of $5 million, $22 million and $13 million, respectively.

(3) Amounts are net of tax (benefit) expense of $(1) million, $1 million, and $0 million, respectively.

See accompanying Notes to Consolidated Financial Statements.

51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in millions)

Common Stock

Treasury Stock

Shares

Amount

Shares

Amount

Additional
Paid-in 
Capital

Accumulated
Other
Comprehensive 
Loss

Retained 
Earnings

Total United 
Natural Foods, 
Inc.
Stockholders’ 
Equity

Noncontrolling 
Interests

Total 
Stockholders’ 
Equity

Balances at August 1, 2020

55.3  $ 

Cumulative effect of change in accounting 

principle

Restricted stock vestings

Share-based compensation

Other comprehensive income

Distributions to noncontrolling interests

Proceeds from issuance of common stock, net

Acquisition of noncontrolling interests

Net income

— 

1.6 

— 

— 

— 

0.1 

— 

— 

Balances at July 31, 2021

57.0  $ 

Restricted stock vestings

Share-based compensation

Other comprehensive income

Distributions to noncontrolling interests

Proceeds from issuance of common stock, net

Acquisition of noncontrolling interests

Net income

Balances at July 30, 2022

Restricted stock vestings

Share-based compensation

Repurchases of common stock

Other comprehensive loss

Distributions to noncontrolling interests

Net income

1.7 

— 

— 

— 

0.2 

— 

— 

58.9  $ 

2.1 

— 

— 

— 

— 

— 

Balances at July 29, 2023

61.0  $ 

1 

— 

— 

— 

— 

— 

— 

— 

— 

1 

— 

— 

— 

— 

— 

— 

— 

1 

— 

— 

— 

— 

— 

— 

1 

0.6 

$ 

(24)  $ 

569  $ 

(239)  $ 

838  $ 

1,145  $ 

(3)  $ 

1,142 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

0.6 

$ 

(24)  $ 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

0.6 

$ 

(24)  $ 

— 

— 

1.9 

— 

— 

— 

— 

— 

(62) 

— 

— 

— 

— 

(14) 

45 

— 

— 

1 

(2) 

— 

599  $ 

(41) 

44 

— 

— 

8 

(2) 

— 

608  $ 

(40) 

38 

— 

— 

— 

— 

— 

— 

— 

200 

— 

— 

— 

— 

(9) 

— 

— 

— 

— 

— 

— 

149 

(9) 

(14) 

45 

200 

— 

1 

(2) 

149 

— 

— 

— 

— 

(4) 

— 

— 

6 

(39)  $ 

978  $ 

1,515  $ 

(1)  $ 

— 

— 

19 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

248 

(41) 

44 

19 

— 

8 

(2) 

248 

— 

— 

— 

(4) 

— 

— 

6 

(20)  $ 

1,226  $ 

1,791  $ 

1  $ 

— 

— 

— 

(8) 

— 

— 

— 

— 

— 

— 

— 

24 

(40) 

38 

(62) 

(8) 

— 

24 

— 

— 

— 

— 

(6) 

6 

(9) 

(14) 

45 

200 

(4) 

1 

(2) 

155 

1,514 

(41) 

44 

19 

(4) 

8 

(2) 

254 

1,792 

(40) 

38 

(62) 

(8) 

(6) 

30 

2.5 

$ 

(86)  $ 

606  $ 

(28)  $ 

1,250  $ 

1,743  $ 

1  $ 

1,744 

See accompanying Notes to Consolidated Financial Statements.

52

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income including noncontrolling interests

Income from discontinued operations, net of tax

Net income from continuing operations

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Share-based compensation

Gain on sale of property and equipment

Closed property and other restructuring charges

Intangible asset impairment charges

Net pension and other postretirement benefit income

Deferred income tax (benefit) expense

LIFO charge

(Recoveries) provisions for losses on receivables

Non-cash interest expense and other adjustments

Changes in operating assets and liabilities, net of acquired businesses

Accounts and notes receivable

Inventories

Prepaid expenses and other assets

Accounts payable

Accrued expenses and other liabilities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for capital expenditures

Proceeds from dispositions of assets

Payments for investments

Net cash used in investing activities of continuing operations

Net cash provided by investing activities of discontinued operations

Net cash used in investing activities 

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings of long-term debt

Proceeds from borrowings under revolving credit line

Repayments of borrowings under revolving credit line

Repayments of long-term debt and finance leases

Repurchases of common stock

Proceeds from the issuance of common stock and exercise of stock options

Payments of employee restricted stock tax withholdings

Payments for debt issuance costs
Distributions to noncontrolling interests

Repayments of other loans

Other

Net cash used in financing activities

EFFECT OF EXCHANGE RATE ON CASH

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents, at beginning of period

Cash and cash equivalents, at end of period

Supplemental disclosures of cash flow information:

Cash paid for interest
Cash (refunds) payments for federal, state and foreign income taxes, net

Additions of property and equipment included in Accounts payable

Fiscal Year Ended

July 29, 2023
(52 weeks)

July 30, 2022
(52 weeks)

July 31, 2021
(52 weeks)

$ 

30  $ 

254  $ 

— 

30 

304 

38 

(9) 

— 

25 

(29) 

(36) 

119 

(1) 

13 

327 

(57) 

(108) 

53 

(45) 

624 

(323) 

16 

(32) 

(339) 

— 

(339) 

— 

2,976 

(3,004) 

(154) 

(62) 

— 

(40) 

— 
(6) 

(2) 

— 

(292) 

— 

(7) 

44 

— 

254 

285 

44 

(87) 

2 

— 

(40) 

55 

158 

2 

24 

(108) 

(264) 

(155) 

86 

75 

331 

(251) 

230 

(28) 

(49) 

— 

(49) 

— 

4,425 

(4,287) 

(376) 

— 

8 

(41) 

(6) 
(4) 

— 

2 

(279) 

— 

3 

41 

$ 

$ 
$ 

$ 

37  $ 

44  $ 

133  $ 
(5)  $ 

32  $ 

134  $ 
5  $ 

45  $ 

155 

6 

149 

285 

45 

(4) 

6 

— 

(85) 

(5) 

24 

(5) 

51 

24 

14 

(37) 

15 

137 

614 

(310) 

82 

(11) 

(239) 

2 

(237) 

500 

3,676 

(3,731) 

(792) 

— 

1 

(14) 

(13) 
(4) 

(6) 

(1) 

(384) 

1 

(6) 

47 

41 

146 
(16) 

35 

See accompanying Notes to Consolidated Financial Statements.

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—SIGNIFICANT ACCOUNTING POLICIES 

Nature of Business

United  Natural  Foods,  Inc.  and  its  subsidiaries  (the  “Company”,  “we”,  “us”,  “UNFI”,  or  “our”)  is  a  leading  distributor  of 
natural,  organic,  specialty,  produce,  and  conventional  grocery  and  non-food  products,  and  provider  of  support  services  to 
retailers. The Company sells its products primarily throughout the United States and Canada.

Fiscal Year

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to fiscal 2023, 
fiscal 2022 and fiscal 2021, or 2023, 2022 and 2021, as presented in tabular disclosure, relate to the 52-week, 52-week and 52-
week fiscal periods ended July 29, 2023, July 30, 2022 and July 31, 2021, respectively.

Basis of Presentation

The  accompanying  Consolidated  Financial  Statements  include  the  accounts  of  the  Company  and  its  subsidiaries.  The 
Consolidated  Financial  Statements  are  prepared  in  conformity  with  accounting  principles  generally  accepted  in  the  United 
States  (“GAAP”).  All  significant  intercompany  transactions  and  balances  have  been  eliminated  in  consolidation.  Unless 
otherwise indicated, references to the Consolidated Statements of Operations and the Consolidated Balance Sheets in the Notes 
to Consolidated Financial Statements exclude all amounts related to discontinued operations. Refer to Note 18—Discontinued 
Operations  for  additional  information  about  the  Company’s  discontinued  operations.  The  remaining  two  stores  previously 
included in discontinued operations were sold in fiscal 2022.

Net Sales

Our Net sales consist primarily of product sales of natural, organic, specialty, produce, and conventional grocery and non-food 
products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional 
services  revenue.  Net  sales  also  include  amounts  charged  by  the  Company  to  customers  for  shipping  and  handling  and  fuel 
surcharges.  Vendor  incentives  do  not  reduce  sales  in  circumstances  where  the  vendor  tenders  the  incentive  to  the  customer, 
when  the  incentive  is  not  a  direct  reimbursement  from  a  vendor,  when  the  incentive  is  not  influenced  by  or  negotiated  in 
conjunction  with  any  other  incentive  arrangements  and  when  the  incentive  is  not  subject  to  an  agency  relationship  with  the 
vendor, whether expressed or implied. 

The  Company  recognizes  revenue  in  an  amount  that  reflects  the  consideration  that  is  expected  to  be  received  for  goods  or 
services  when  its  performance  obligations  are  satisfied  by  transferring  control  of  those  promised  goods  or  services  to  its 
customers.  Accounting  Standards  Codification  (“ASC”)  606  defines  a  five-step  process  to  recognize  revenue  that  requires 
judgment  and  estimates,  including  identifying  the  contract  with  the  customer,  identifying  the  performance  obligations  in  the 
contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and 
recognizing revenue when or as the performance obligation is satisfied. 

Revenues  from  wholesale  product  sales  are  recognized  when  control  is  transferred,  which  typically  happens  upon  either 
shipment or delivery, depending on the contract terms with the customer. Typically, shipping and customer receipt of wholesale 
products occur on the same business day. Discounts and allowances provided to customers are recognized as a reduction in Net 
sales as control of the products is transferred to customers. The Company recognizes freight revenue related to transportation of 
its products when control of the product is transferred, which is typically upon delivery. 

Revenues from Retail product sales are recognized at the point of sale upon customer check-out. Advertising income earned 
from  our  franchisees  that  participate  in  our  Retail  advertising  program  is  recognized  as  Net  sales.  The  Company  recognizes 
loyalty program expense in the form of fuel rewards as a reduction of Net sales.

Sales tax is excluded from Net sales. Limited rights of return exist with our customers due to the nature of the products we sell. 

Refer to Note 3—Revenue Recognition for additional information regarding the Company’s revenue recognition policies.

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 Table of Contents

Cost of Sales

Cost of sales consist primarily of amounts paid to suppliers for product sold, plus transportation costs necessary to bring the 
product to, or move product between, the Company’s distribution facilities and retail stores, partially offset by consideration 
received  from  suppliers  in  connection  with  the  purchase,  transportation  or  promotion  of  the  suppliers’  products.  Retail  store 
advertising expenses are components of Cost of sales and are expensed as incurred.

The  Company  receives  allowances  and  credits  from  vendors  for  buying  activities,  such  as  volume  incentives,  promotional 
allowances  directed  by  the  Company  to  customers,  cash  discounts  and  new  product  introductions  (collectively  referred  to  as 
“vendor funds”), which are typically based on contractual arrangements covering a period of one year or less. The Company 
recognizes vendor funds for merchandising activities as a reduction of Cost of sales when the related products are sold, unless it 
has been determined that a discrete identifiable benefit has been provided to the vendor, in which case the related amounts are 
recognized within Net sales. Vendor funds that have been earned as a result of completing the required performance under the 
terms of the underlying agreements but for which the product has not yet been sold are recognized as a reduction to the cost of 
inventory. When payments or rebates can be reasonably estimated and it is probable that the specified target will be met, the 
payment  or  rebate  is  accrued.  However,  when  attaining  the  target  is  not  probable,  the  payment  or  rebate  is  recognized  only 
when  and  if  the  target  is  achieved.  Any  upfront  payments  received  for  multi-period  contracts  are  generally  deferred  and 
amortized over the life of the contracts. The majority of the vendor funds contracts have terms of less than a year, with a small 
proportion of the contracts longer than one year.

Shipping and Handling Fees and Costs

The Company includes shipping and handling fees billed to customers in Net sales. Shipping and handling costs associated with 
inbound freight are recorded in Cost of sales, whereas shipping and handling costs for receiving, selecting, quality assurance, 
and  outbound  transportation  are  recorded  in  Operating  expenses.  Outbound  shipping  and  handling  costs,  including  allocated 
employee benefit expenses that are recorded in Operating expenses, totaled $1,745 million, $1,737 million and $1,513 million 
for fiscal 2023, 2022 and 2021, respectively.

Operating Expenses

Operating  expenses  include  distribution  expenses  of  warehousing,  delivery,  purchasing,  receiving,  selecting,  and  outbound 
transportation  expenses,  and  selling  and  administrative  expenses.  These  expenses  include  salaries  and  wages,  employee 
benefits, occupancy, insurance, depreciation and amortization expense, and share-based compensation expense. 

Restructuring, Acquisition and Integration Related Expenses

Restructuring,  acquisition  and  integration  related  expenses  reflect  expenses  resulting  from  restructuring  activities,  including 
severance  costs,  facility  closure  asset  impairment  charges  and  costs,  share-based  compensation  acceleration  charges  and 
acquisition and integration related expenses. Integration related expenses include certain professional consulting expenses and 
incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions. 

Loss (Gain) on Sale of Assets and Other Asset Charges

Loss  (gain)  on  sale  of  assets  and  other  asset  charges  primarily  includes  losses  (gains)  on  sales  of  assets,  losses  on  sales  of 
financial assets, and asset impairments. In fiscal 2023, the Company recorded an impairment charge related to intangible assets 
associated  with  its  Blue  Marble  Brands  portfolio.  Refer  to  Note  6—Goodwill  and  Intangible  Assets,  Net  for  additional 
information on this impairment charge. In fiscal 2022, the Company recorded a gain on sale related to our Riverside, California 
distribution center. Refer to Note 11—Leases for additional information on this gain on sale. 

Interest Expense, Net

Interest  expense,  net  includes  primarily  interest  expense  on  long-term  debt,  net  of  capitalized  interest,  loss  on  debt 
extinguishment,  interest  expense  on  finance  lease  obligations,  amortization  of  financing  costs  and  discounts,  and  interest 
income. 

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Use of Estimates

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and 
assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure  of  contingent  assets  and  liabilities  at  the 
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results 
could differ from those estimates.

Reclassifications

Within the Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current year 
presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking 
arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds 
all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book 
overdrafts,  which  are  recorded  in  Accounts  payable  in  the  Consolidated  Balance  Sheets  and  are  reflected  as  an  operating 
activity  in  the  Consolidated  Statements  of  Cash  Flows.  As  of  July  29,  2023  and  July  30,  2022,  the  Company  had  net  book 
overdrafts of $308 million and $266 million, respectively.

Accounts Receivable, Net

Accounts receivable, net primarily consist of trade receivables from customers and net receivable balances from suppliers. In 
determining the adequacy of the allowances, management analyzes customer creditworthiness, aging of receivables, payment 
terms,  the  value  of  the  collateral,  customer  financial  statements,  historical  collection  experience  and  other  economic  and 
industry  factors.  In  instances  where  a  reserve  has  been  recorded  for  a  particular  customer,  future  sales  to  the  customer  are 
conducted using either cash-on-delivery terms, or the account is closely monitored so that as agreed upon payments are received 
and then orders are released; a failure to pay results in held or canceled orders.

Inventories, Net

Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or 
net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost 
method, perpetual cost method, the retail inventory method and the replacement cost method. Allowances for vendor funds and 
cash  discounts  received  from  suppliers  are  recorded  as  a  reduction  to  Inventories,  net  and  subsequently  within  Cost  of  sales 
upon the sale of the related products. Inventory quantities are evaluated throughout each fiscal year based on actual physical 
counts in the Company’s distribution facilities and stores. Allowances for inventory shortages are recorded based on the results 
of these counts. As of July 29, 2023 and July 30, 2022, approximately $2.0 billion and $1.9 billion, respectively, of inventory 
was valued under the LIFO method, before the application of a LIFO reserve, and primarily included grocery, frozen food and 
general merchandise products, with the remaining inventory valued under the first-in, first-out (“FIFO”)  method and primarily 
included meat, dairy and deli products. The LIFO reserve was $344 million and $225 million as of July 29, 2023 and July 30, 
2022, respectively, which is recorded within Inventories, net on the Consolidated Balance Sheets.

Property and Equipment, Net and Amortizing Intangible Assets

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is based on the 
estimated useful lives of the assets using the straight-line method. Applicable interest charges incurred during the construction 
of new facilities are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives if certain 
criteria are met. Refer to Note 5—Property and Equipment, Net for additional information.

The Company reviews long-lived assets, including amortizing intangible assets, for indicators of impairment whenever events 
or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Cash flows expected to be 
generated by the related assets are estimated over the assets’ useful lives based on updated projections. The Company groups 
long-lived assets with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows 
of  other  assets.  If  the  evaluation  indicates  that  the  carrying  amount  of  an  asset  group  may  not  be  recoverable,  the  potential 
impairment  is  measured  based  on  a  fair  value  discounted  cash  flow  model  or  a  market  approach  method.  Refer  to  Note  6—
Goodwill and Intangible Assets, Net for additional information regarding the Company’s intangible assets impairment reviews 
and other information.

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Income Taxes

The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax 
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured 
using enacted tax rates expected to apply to taxable income in the years in which those temporary 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  in  the 
period that includes the enactment date.

The  Company  records  liabilities  to  address  uncertain  tax  positions  we  have  taken  in  previously  filed  tax  returns  or  that  we 
expect to take in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax 
position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be 
sustained  upon  examination.  For  those  positions  for  which  we  conclude  it  is  more  likely  than  not  it  will  be  sustained,  we 
recognize the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the 
taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate 
resolution of these tax positions may be greater or less than the liabilities recorded.

The Company allocates tax expense among specific financial statement components using a “with-or-without” approach. Under 
this approach, the Company first determines the total tax expense or benefit (current and deferred) for the period. The Company 
then  calculates  the  tax  effect  of  pretax  income  from  continuing  operations  only.  The  residual  tax  expense  is  allocated  on  a 
proportional basis to other financial statement components (i.e. discontinued operations, other comprehensive income). 

Goodwill and Intangible Assets, Net

The  Company  accounts  for  acquired  businesses  using  the  purchase  method  of  accounting,  which  requires  that  the  assets 
acquired and liabilities assumed be recorded at the acquisition date at their respective estimated fair values. Goodwill represents 
the  excess  acquisition  cost  over  the  fair  value  of  net  assets  acquired  in  a  business  combination.  Goodwill  is  assigned  to  the 
reporting  units  that  are  expected  to  benefit  from  the  synergies  of  the  business  combination  that  generated  the  goodwill. 
Goodwill reporting units exist at one level below the operating segment level unless they are determined to be economically 
similar, and are evaluated for events or changes in circumstances indicating a goodwill reporting unit has changed. Relative fair 
value allocations are performed when components of an aggregated goodwill reporting unit become separate reporting units or 
move from one reporting unit to another. 

Goodwill  is  reviewed  for  impairment  at  least  annually  as  of  the  first  day  of  the  fourth  fiscal  quarter  and  if  events  occur  or 
circumstances  change  that  would  indicate  that  the  value  of  the  reporting  unit  may  be  impaired.  The  Company  performs 
qualitative  assessments  of  Goodwill  for  impairment.  If  the  qualitative  assessment  indicates  it  is  more  likely  than  not  that  a 
reporting unit’s fair value is less than the carrying value, or the Company bypasses the qualitative assessment, a quantitative 
assessment  would  be  performed.  When  a  quantitative  assessment  is  required,  the  Company  estimates  the  fair  values  of  its 
reporting  units  by  using  the  market  approach,  applying  a  multiple  of  earnings  based  on  guidelines  for  publicly  traded 
companies, and/or the income approach, discounting projected future cash flows based on management’s expectations of the 
current  and  future  operating  environment  for  each  reporting  unit.  Refer  to  Note  6—Goodwill  and  Intangible  Assets,  Net  for 
additional information regarding the Company’s goodwill impairment reviews and other information.

Indefinite-lived intangible assets include the Tony’s Fine Foods tradename, and prior to July 29, 2023 included the Blue Marble 
Brands portfolio. Indefinite-lived intangible assets are reviewed for impairment at least annually as of the first day of the fourth 
fiscal quarter and more frequently if events occur or circumstances change that would indicate that the value of the asset may be 
impaired. When a quantitative assessment is required, the Company estimates the fair value for intangible assets utilizing the 
income approach, which discounts the projected future net cash flow using an appropriate discount rate that reflects the risks 
associated  with  such  projected  future  cash  flow.  In  fiscal  2023,  the  Company  recorded  an  impairment  charge  related  to 
intangible assets associated with its Blue Marble Brands portfolio. Refer to Note 6—Goodwill and Intangible Assets, Net for 
additional information regarding the Company’s intangible assets impairment reviews and other information.

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Intangible assets with definite lives are amortized on a straight-line basis over the following years:

Customer relationships
Trademarks and tradenames
Favorable operating leases
Pharmacy prescription files

Business Dispositions

10 - 20 years
2 - 10 years
2 - 8 years
7 years

The Company reviews the presentation of planned business dispositions in the Consolidated Financial Statements based on the 
available  information  and  events  that  have  occurred.  The  review  consists  of  evaluating  whether  the  business  meets  the 
definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the 
business, and if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from 
continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial 
results. In addition, the Company evaluates whether the business has met the criteria as a business held for sale. In order for a 
planned  disposition  to  be  classified  as  a  business  held  for  sale,  the  established  criteria  must  be  met  as  of  the  reporting  date, 
including an active program to market the business and the expected disposition of the business within one year.

Planned  business  dispositions  are  presented  as  discontinued  operations  when  all  the  criteria  described  above  are  met. 
Operations  of  the  business  components  meeting  the  discontinued  operations  requirements  are  presented  within  Income  from 
discontinued  operations,  net  of  tax  in  the  Consolidated  Statements  of  Operations,  and  assets  and  liabilities  of  the  business 
component planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets. See Note 18—
Discontinued Operations for additional information.

The  carrying  value  of  the  business  held  for  sale  is  reviewed  for  recoverability  upon  meeting  the  classification  requirements. 
Evaluating the recoverability of the assets of a business classified as held for sale follows a defined order in which property and 
intangible  assets  subject  to  amortization  are  considered  only  after  the  recoverability  of  Goodwill,  indefinite  lived  intangible 
assets and other assets are assessed. After the valuation process is completed, the held for sale business is reported at the lower 
of its carrying value or fair value less cost to sell, and no additional depreciation or amortization expense is recognized. There 
are  inherent  judgments  and  estimates  used  in  determining  the  fair  value  less  costs  to  sell  of  a  business  and  any  impairment 
charges. The sale of a business can result in the recognition of a gain or loss that differs from that anticipated prior to closing.

Fair Value of Financial Instruments

Financial assets and liabilities measured on a recurring basis, and non-financial assets and liabilities that are recognized on a 
non-recurring basis, are recognized or disclosed at fair value on at least an annual basis. Fair value is defined as the price 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  principal  or  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  use  of 
observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of 
inputs that may be used to measure 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 market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for 
identical  or  similar  assets  or  liabilities  in  markets  that  are  not  active;  and  inputs  to  valuation  models  or  other  pricing 
methodologies  that  do  not  require  significant  judgment  because  the  inputs  used  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  of  significant  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.

The  carrying  amounts  of  the  Company’s  financial  instruments  including  Cash  and  cash  equivalents,  Accounts  receivable, 
Accounts payable and certain Accrued expenses and Other assets and liabilities approximate fair value due to the short-term 
nature of these instruments.

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Share-Based Compensation

Share-based compensation consists of time-based restricted stock units, performance-based restricted stock units, stock options 
and  SUPERVALU  INC.  (“Supervalu”)  Replacement  Awards  (as  defined  below).  Share-based  compensation  expense  is 
measured by the fair value of the award on the date of grant. The Company recognizes Share-based compensation expense on a 
straight-line basis over the requisite service period of the individual grants. Forfeitures are recognized as reductions to Share-
based compensation when they occur. The grant date closing price per share of the Company’s stock is used to determine the 
fair value of restricted stock units. Supervalu Replacement Awards were liability classified awards as they may ultimately be 
settled  in  cash  or  shares  at  the  discretion  of  the  employee.  The  Company’s  executive  officers  and  members  of  senior 
management have been granted performance units which vest, when and if earned, in accordance with the terms of the related 
performance unit award agreements. The Company recognizes Share-based compensation expense based on the target number 
of  shares  of  common  stock  and  the  Company’s  stock  price  on  the  date  of  grant  and  subsequently  adjusts  expense  based  on 
actual  and  forecasted  performance  compared  to  planned  targets.  Share-based  compensation  expense  is  recognized  within 
Operating expenses for ongoing employees and in certain instances is recorded within Restructuring, acquisition and integration 
related expenses when an employee is notified of termination and their awards become accelerated. Refer to Note 12—Share-
Based Awards for additional information.

Benefit Plans

The Company recognizes the funded status of its Company-sponsored defined benefit plans in the Consolidated Balance Sheets 
and gains or losses and prior service costs or credits not yet recognized as a component of Accumulated other comprehensive 
loss,  net  of  tax,  in  the  Consolidated  Balance  Sheets.  The  Company  measures  its  defined  benefit  pension  and  other 
postretirement  plan  obligations  as  of  the  nearest  calendar  month  end.  The  Company  records  Net  periodic  benefit  income  or 
expense  related  to  interest  cost,  expected  return  on  plan  assets  and  the  amortization  of  actuarial  gains  and  losses,  excluding 
service costs, in the Consolidated Statements of Operations within Net periodic benefit income, excluding service cost. Service 
costs are recorded in Operating expenses in the Consolidated Statements of Operations. 

The  Company  sponsors  pension  and  other  postretirement  plans  in  various  forms  covering  participants  who  meet  eligibility 
requirements. The determination of the Company’s obligation and related income or expense for Company-sponsored pension 
and  other  postretirement  benefits  is  dependent,  in  part,  on  management’s  selection  of  certain  actuarial  assumptions  in 
calculating  these  amounts.  These  assumptions  include,  among  other  things,  the  discount  rate,  the  expected  long-term  rate  of 
return on plan assets and the rates of increase in healthcare costs. These assumptions are disclosed in Note 13—Benefit Plans. 
Actual results that differ from the assumptions are accumulated and amortized over future periods.

The  Company  contributes  to  various  multiemployer  pension  plans  under  collective  bargaining  agreements,  primarily  defined 
benefit  pension  plans.  Pension  expense  for  these  plans  is  recognized  as  contributions  are  funded.  In  addition,  the  Company 
provides  postretirement  health  and  welfare  benefits  for  certain  groups  of  union  and  non-union  employees.  See  Note  13—
Benefit Plans for additional information on participation in multiemployer plans. 

Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding 
during  the  period.  Diluted  earnings  per  share  is  calculated  by  adding  the  dilutive  potential  common  shares  to  the  weighted 
average  number  of  common  shares  that  were  outstanding  during  the  period.  For  purposes  of  the  diluted  earnings  per  share 
calculation,  outstanding  stock  options,  restricted  stock  units  and  performance-based  awards,  if  applicable,  are  considered 
common stock equivalents, using the treasury stock method. 

Treasury Stock

The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These 
shares are classified as Treasury stock, which is a reduction to Stockholders’ equity. Treasury stock is included in authorized 
and issued shares but excluded from outstanding shares. 

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On September 21, 2022, our Board of Directors authorized a new repurchase program for up to $200 million of the Company’s 
common stock over a term of four years (the “2022 Repurchase Program”). Under the 2022 Repurchase Program, the Company 
repurchased approximately 1.9 million shares of its common stock for a total cost of $62 million in fiscal 2023. The Company 
did not repurchase any shares of its common stock in fiscal 2022 or 2021. As of July 29, 2023, the Company had $138 million 
remaining  authorized  under  the  2022  Repurchase  Program.  Refer  to  Note  9—Long-Term  Debt  for  information  on  the 
Company’s credit facilities’ limitations on its ability to repurchase shares of common stock above certain levels unless certain 
conditions and financial tests are met.

Comprehensive Income

Comprehensive income is reported in the Consolidated Statements of Comprehensive Income. Comprehensive income includes 
all changes in Stockholders’ equity during the reporting period, other than those resulting from investments by and distributions 
to stockholders. The Company’s comprehensive income is calculated as Net income including noncontrolling interests, plus or 
minus adjustments for foreign currency translation related to the translation of UNFI Canada, Inc. (“UNFI Canada”) from the 
functional currency of Canadian dollars to U.S. dollar reporting currency, changes in the fair value of cash flow hedges, net of 
tax, and changes in defined pension and other postretirement benefit plan obligations, net of tax, less comprehensive income 
attributable to noncontrolling interests.

Accumulated other comprehensive loss represents the cumulative balance of Other comprehensive (loss) income, net of tax, as 
of the end of the reporting period and relates to foreign currency translation adjustments, and unrealized gains or losses on cash 
flow hedges, net of tax and changes in defined pension and other postretirement benefit plan obligations, net of tax.

Derivative Financial Instruments

The Company utilizes derivative financial instruments to manage its exposure to changes in interest rates, fuel costs, and with 
the operation of UNFI Canada, foreign currency exchange rates. All derivatives are recognized on the Company’s Consolidated 
Balance Sheets at fair value based on quoted market prices or estimates, and are recorded in either current or noncurrent assets 
or  liabilities  based  on  their  maturity.  Changes  in  the  fair  value  of  derivatives  are  recorded  in  comprehensive  income  or  net 
earnings,  based  on  whether  the  instrument  is  designated  and  effective  as  a  hedge  transaction  and,  if  so,  the  type  of  hedge 
transaction.  Gains  or  losses  on  derivative  instruments  are  recorded  in  Accumulated  other  comprehensive  loss  and  are 
reclassified to earnings in the period the hedged item affects earnings. If the hedged relationship ceases to exist, any associated 
amounts reported in Accumulated other comprehensive loss are reclassified to earnings at that time. The Company measures 
effectiveness of its hedging relationships both at hedge inception and on an ongoing basis.

Self-Insurance Liabilities

The  Company  is  primarily  self-insured  for  workers’  compensation,  general  and  automobile  liability  insurance.  It  is  the 
Company’s policy to record the self-insured portion of workers’ compensation, general and automobile liabilities based upon 
actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled, and that 
have been incurred but not yet reported, discounted at a risk-free interest rate. The present value of such claims was calculated 
using a discount rate of 3.5% and 3% as of July 29, 2023 and July 30, 2022, respectively.

Changes in the Company’s self-insurance liabilities consisted of the following:

(in millions)
Beginning balance

Expense
Claim payments
Reclassifications

Ending balance

2023

2022

2021

$ 

$ 

98  $ 
52 
(57)   
4 
97  $ 

103  $ 
44 
(50)   
1 
98  $ 

101 
48 
(48) 
2 
103 

The  current  portion  of  the  self-insurance  liability  was  $34  million  and  $34  million  as  of  July  29,  2023  and  July  30,  2022, 
respectively, and is included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets. The long-
term portions were $63 million and $64 million as of July 29, 2023 and July 30, 2022, respectively, and are included in Other 
long-term liabilities in the Consolidated Balance Sheets. The self-insurance liabilities as of the end of the fiscal year are net of 
discounts  of  $8  million  and  $11  million  as  of  July  29,  2023  and  July  30,  2022,  respectively.  Amounts  due  from  insurance 
companies were $26 million and $12 million as of July 29, 2023 and July 30, 2022, respectively, and are recorded in Prepaid 
expenses and other current assets and Other long-term assets.

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Leases

At  the  inception  or  modification  of  a  contract,  the  Company  determines  whether  a  lease  exists  and  classifies  its  leases  as  an 
operating  or  finance  lease  at  commencement.  Subsequent  to  commencement,  lease  classification  is  only  reassessed  upon  a 
change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’s right to 
use  an  underlying  asset  as  lessee  for  the  lease  term,  and  lease  obligations  represent  the  Company’s  obligation  to  make  lease 
payments  arising  from  the  lease.  These  assets  and  obligations  are  recognized  at  the  lease  commencement  date  based  on  the 
present value of lease payments, net of incentives, over the lease term. Incremental borrowing rates are estimated based on the 
Company’s borrowing rate as of the lease commencement date to determine the present value of lease payments, when lease 
contracts  do  not  provide  a  readily  determinable  implicit  rate.  Incremental  borrowing  rates  are  determined  by  using  the  yield 
curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. The lease 
asset  also  reflects  any  prepaid  rent,  initial  direct  costs  incurred  and  lease  incentives  received.  The  Company’s  lease  terms 
include  optional  extension  periods  when  it  is  reasonably  certain  that  those  options  will  be  exercised.  Leases  with  an  initial 
expected  term  of  12  months  or  less  are  not  recorded  in  the  Consolidated  Balance  Sheets  and  the  related  lease  expense  is 
recognized on a straight-line basis over the lease term. For certain classes of underlying assets, the Company has elected to not 
separate fixed lease components from the fixed nonlease components.

The  Company  recognizes  contractual  obligations  and  receipts  on  a  gross  basis,  such  that  the  related  lease  obligation  to  the 
landlord is presented separately from the sublease created by the lease assignment to the assignee. As a result, the Company 
continues to recognize on its Consolidated Balance Sheets the operating lease assets and liabilities, and finance lease assets and 
obligations, for assigned leases.

The Company records operating lease expense and income using the straight-line method within Operating expenses, and lease 
income  on  a  straight-line  method  for  leases  with  its  customers  within  Net  sales.  Finance  lease  expense  is  recognized  as 
amortization expense within Operating expenses, and interest expense within Interest expense, net. For operating leases with 
step rent provisions whereby the rental payments increase over the life of the lease, and for leases with rent-free periods, the 
Company  recognizes  expense  and  income  on  a  straight-line  basis  over  the  expected  lease  term,  based  on  the  total  minimum 
lease  payments  to  be  made  or  lease  receipts  expected  to  be  received.  The  Company  is  generally  obligated  for  property  tax, 
insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual 
obligations on properties where the Company remains the primary obligor upon assignment of the lease and does not obtain a 
release from landlords or retain the equity interests in the legal entities with the related rent contracts, the Company continues to 
recognize rent expense and rent income within Operating expenses.

Operating and finance lease assets are reviewed for impairment based on an ongoing review of circumstances that indicate the 
assets may no longer be recoverable, such as closures of retail stores, distribution centers and other properties that are no longer 
being utilized in current operations, and other factors. The Company calculates operating and finance lease impairments using a 
discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. 
Lease impairment charges for properties no longer used in operations are recorded as a component of Restructuring, acquisition 
and integration related expenses in the Consolidated Statements of Operations.

The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, 
discount rates and future cash flows based on the Company’s experience and knowledge of the market in which the property is 
located,  previous  efforts  to  dispose  of  similar  assets  and  the  assessment  of  existing  market  conditions.  Impairments  are 
recognized as a reduction of the carrying value of the right of use asset and finance lease assets. Refer to Note 11—Leases for 
additional information.

For transactions in which an owned property is sold and leased back from the buyer, the Company recognizes a sale, and lease 
accounting is applied if the Company has transferred control of the property to the buyer. For such transactions, the Company 
removes  the  transferred  assets  from  the  Consolidated  Balance  Sheets  and  a  gain  or  loss  on  the  sale  is  recognized  for  the 
difference between the carrying amount of the asset and the fair value of the transaction as of the transaction date. If control of 
the underlying asset is not transferred, the Company does not recognize an asset sale and recognizes a financing lease liability 
for consideration received.

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NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS 

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued accounting ASU 2016-13, Financial Instruments—
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial 
guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11 (collectively, “Topic 326”). Topic 326 changed the 
impairment model for most financial assets and certain other instruments. For trade and other receivables, guarantees and other 
instruments,  entities  are  required  to  use  a  new  forward-looking  expected  loss  model  that  replaces  the  previous  incurred  loss 
model and generally results in earlier recognition of credit losses. The Company adopted this standard in fiscal 2021, on August 
2, 2020, the effective and initial application date, using a modified-retrospective basis as required by the standard by means of a 
cumulative-effect  adjustment  to  the  opening  balance  of  Retained  earnings  in  the  Company’s  Consolidated  Statements  of 
Stockholders' Equity. The difference between reserves and allowances recorded under the former incurred loss model and the 
amount  determined  under  the  current  expected  loss  model,  net  of  the  deferred  tax  impact,  was  recorded  as  an  adjustment  to 
Retained  earnings.  Adoption  of  this  standard  did  not  have  a  material  impact  to  the  Company’s  Consolidated  Financial 
Statements.

Recently Issued Accounting Pronouncements

In  June  2022,  the  FASB  issued  ASU  2022-03,  Fair  Value  Measurement  (Topic  820):  Fair  Value  Measurement  of  Equity 
Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity 
security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The 
amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions. The 
Company is required to adopt this guidance in the first quarter of fiscal 2025. The Company is in the process of reviewing the 
provisions  of  the  new  standard  but  does  not  expect  the  adoption  to  have  a  material  impact  on  the  Company’s  consolidated 
financial statements. 

NOTE 3—REVENUE RECOGNITION 

Product sales

The  Company  enters  into  wholesale  customer  distribution  agreements  that  provide  terms  and  conditions  of  our  order 
fulfillment. The Company’s distribution agreements often specify levels of required minimum purchases in order to earn certain 
rebates  or  incentives.  Certain  contracts  include  rebates  and  other  forms  of  variable  consideration,  including  consideration 
payable to the customer up-front, over time or at the end of a contract term. Many of the Company’s contracts with customers 
outline  various  other  promises  to  be  performed  in  conjunction  with  the  sale  of  product.  The  Company  determined  that  these 
promises  provided  are  immaterial  within  the  overall  context  of  the  respective  contract,  and  as  such  has  not  allocated  the 
transaction price to these obligations.

In transactions for goods or services where the Company engages third parties to participate in its order fulfillment process, it 
evaluates whether it is the principal or an agent in the transaction. The Company’s analysis considers whether it controls the 
goods or services before they are transferred to its customer, including an evaluation of whether the Company has the ability to 
direct the use of, and obtain substantially all the remaining benefits from, the specified good or service before it is transferred to 
the  customer.  Agent  transactions  primarily  reflect  circumstances  where  the  Company  is  not  involved  in  order  fulfillment  or 
where it is involved in the order fulfillment but is not contractually obligated to purchase the related goods or services from 
vendors, and instead extends wholesale customers credit by paying vendor trade accounts payable and does not control products 
prior to their sale. Under ASC 606, if the Company determines that it is acting in an agent capacity, transactions are recorded on 
a net basis. If the Company determines that it is acting in a principal capacity, transactions are recorded on a gross basis.

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The Company also evaluates vendor sales incentives to determine whether they reduce the transaction price with its customers. 
The  Company’s  analysis  considers  which  party  tenders  the  incentive,  whether  the  incentive  reflects  a  direct  reimbursement 
from a vendor, whether the incentive is influenced by or negotiated in conjunction with any other incentive arrangements and 
whether  the  incentive  is  subject  to  an  agency  relationship  with  the  vendor,  whether  expressed  or  implied.  Typically,  when 
vendor  incentives  are  offered  directly  by  vendors  to  the  Company’s  customers,  require  the  achievement  of  vendor-specified 
requirements  to  be  earned  by  customers,  and  are  not  negotiated  by  the  Company  or  in  conjunction  with  any  other  incentive 
agreement whereby the Company does not control the direction or earning of these incentives, then Net sales are not reduced as 
part  of  the  Company’s  determination  of  the  transaction  price.  In  circumstances  where  the  vendors  provide  the  Company 
consideration  to  promote  the  sale  of  their  goods  and  the  Company  determines  the  specific  performance  requirements  for  its 
customers  to  earn  these  incentives,  Net  sales  and  Cost  of  sales  are  reduced  for  these  customer  incentives  as  part  of  the 
determination of the transaction price.

Certain customer agreements provide for the right to license one or more of the Company’s tradenames, such as FESTIVAL 
FOODS®,  SENTRY®,  COUNTY  MARKET®,  FOODLAND®,  and  SUPERVALU®.  In  addition,  the  Company  enters  into 
franchise agreements to separately charge its customers, who the Company also sells wholesale products to, for the right to use 
its CUB® tradename. The Company typically does not separately charge for the right to license its tradenames. The Company 
believes  that  these  tradenames  are  capable  of  being  distinct,  but  are  not  distinct  within  the  context  of  the  contracts  with  its 
customers. Accordingly, the Company does not separately recognize revenue related to tradenames utilized by its customers. 

The Company enters into distribution agreements with manufacturers to provide wholesale supplies to the Defense Commissary 
Agency (“DeCA”) and other government agency locations. DeCA contracts with manufacturers to obtain grocery products for 
the  commissary  system.  The  Company  contracts  with  manufacturers  to  distribute  products  to  the  commissaries  after  being 
authorized by the manufacturers to be a military distributor to DeCA. The Company must adhere to DeCA’s delivery system 
procedures governing matters such as product identification, ordering and processing, information exchange and resolution of 
discrepancies. DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is contracted 
by the manufacturer for a particular commissary or exchange location, and then places a product order with that distributor that 
is covered under DeCA’s master contract with the applicable manufacturer. The Company supplies product from its existing 
inventory, delivers it to the DeCA designated location, and bills the manufacturer for the product price plus a drayage fee. The 
manufacturer then bills DeCA under the terms of its master contract. The Company has determined that it controls the goods 
before they are transferred to the customer, and as such it is the principal in the transaction. Revenue is recognized on a gross 
basis when control of the product passes to the DeCA designated location.

Customer incentives

The  Company  provides  incentives  to  its  wholesale  customers  in  various  forms  established  under  the  applicable  agreement, 
including advances, payments over time that are earned by achieving specified purchasing thresholds, and upon the passage of 
time. The Company typically records customer advances within Other long-term assets and Prepaid expenses and other current 
assets  and  typically  recognizes  customer  incentive  payments  that  are  based  on  expected  purchases  over  the  term  of  the 
agreement as a reduction to Net sales. To the extent that the transaction price for product sales includes variable consideration, 
such  as  certain  of  these  customer  incentives,  the  Company  estimates  the  amount  of  variable  consideration  that  should  be 
included  in  the  transaction  price  primarily  by  utilizing  the  expected  value  method.  Variable  consideration  is  included  in  the 
transaction price if it is probable that a significant future reversal of cumulative revenue under the agreement will not occur. 
The Company believes that there will not be significant changes to its estimates of variable consideration, as the uncertainty 
will be resolved within a relatively short time and there is a significant amount of historical data that is used in the estimation of 
the  amount  of  variable  consideration  to  be  received.  Therefore,  the  Company  has  not  constrained  its  estimates  of  variable 
consideration.

Customer incentive assets are reviewed for impairment when circumstances exist for which the Company no longer expects to 
recover the applicable customer incentives.

Professional services and equipment sales

Separate  from  the  services  provided  in  conjunction  with  the  sale  of  products  described  above,  many  of  the  Company’s 
agreements with customers also include distinct professional services and other promises to customers, in addition to the sale of 
the product itself, such as retail store support, advertising, store layout and design services, merchandising support, couponing, 
eCommerce,  network  and  data  hosting  solutions,  training  and  certifications  classes,  and  administrative  back-office  solutions. 
These  professional  services  may  contain  a  single  performance  obligation  for  each  respective  service,  in  which  case  such 
services revenues are recognized when delivered. Revenues from professional services are less than 1% of total Net sales.

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Wholesale equipment sales are recorded as direct sales to customers when shipped or delivered, consistent with the recognition 
of product sales.

Disaggregation of Revenues

The Company records revenue to five customer channels within Net sales, which are described below:

•

•

•

•

•

Chains,  which  consists  of  customer  accounts  that  typically  have  more  than  10  operating  stores  and  excludes  stores 
included within the Supernatural and Other channels defined below;
Independent  retailers,  which  includes  smaller  size  accounts  including  single  store  and  multiple  store  locations,  and 
group purchasing entities that are not classified within Chains above or Other defined below;
Supernatural,  which  consists  of  chain  accounts  that  are  national  in  scope  and  carry  primarily  natural  products,  and 
currently consists solely of one customer;
Retail,  which  reflects  the  Company's  Retail  segment,  including  Cub®  Foods  and  Shoppers®  stores,  excluding 
Shoppers® locations that were held for sale within discontinued operations; and
Other,  which  includes  international  customers  outside  of  Canada,  foodservice,  eCommerce,  conventional  military 
business and other sales.

The following tables detail the Company’s Net sales for the periods presented by customer channel for each of its segments. 
The Company does not record its revenues within its Wholesale reportable segment for financial reporting purposes by product 
group, and it is therefore impracticable for it to report them accordingly.

(in millions)
Customer Channel
Chains
Independent retailers
Supernatural
Retail
Other
Eliminations
Total

(in millions)
Customer Channel
Chains
Independent retailers
Supernatural
Retail
Other
Eliminations
Total

(in millions)
Customer Channel
Chains
Independent retailers
Supernatural
Retail
Other
Eliminations
Total

Wholesale

Retail

Net Sales for Fiscal 2023
Other

Eliminations(1)

Consolidated

$ 

$ 

12,816  $ 
7,699 
6,374 
— 
2,253 
— 
29,142  $ 

—  $ 
— 
— 
2,480 
— 
— 
2,480  $ 

—  $ 
— 
— 
— 
224 
— 
224  $ 

—  $ 
— 
— 
— 
— 
(1,574)   
(1,574)  $ 

12,816 
7,699 
6,374 
2,480 
2,477 
(1,574) 
30,272 

Wholesale

Retail

Net Sales for Fiscal 2022
Other

Eliminations(1)

Consolidated

$ 

$ 

$ 

$ 

12,562  $ 
7,360 
5,719 
— 
2,183 
— 
27,824  $ 

—  $ 
— 
— 
2,468 
— 
— 
2,468  $ 

—  $ 
— 
— 
— 
219 
— 
219  $ 

—  $ 
— 
— 
— 
— 
(1,583)   
(1,583)  $ 

12,562 
7,360 
5,719 
2,468 
2,402 
(1,583) 
28,928 

Wholesale

Retail

Net Sales for Fiscal 2021
Other

Eliminations(1)

Consolidated

12,104  $ 

6,638 
5,050 
— 
2,081 
— 
25,873  $ 

—  $ 
— 
— 
2,442 
— 
— 
2,442  $ 

—  $ 
— 
— 
— 
219 
— 
219  $ 

—  $ 
— 
— 
— 
— 
(1,584)   
(1,584)  $ 

12,104 
6,638 
5,050 
2,442 
2,300 
(1,584) 
26,950 

(1) Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments 

included within Other to Wholesale.

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Whole  Foods  Market,  Inc.  was  the  Company’s  largest  customer  in  each  fiscal  year  presented.  Whole  Foods  Market,  Inc. 
accounted  for  approximately  21%,  20%  and  19%  of  the  Company’s  net  sales  for  fiscal  2023,  2022  and  2021,  respectively. 
There were no other customers that individually generated 10% or more of the Company’s net sales during those periods.

The Company serves customers in the United States and Canada, as well as customers located in other countries. However, all 
of  the  Company’s  revenue  is  earned  in  the  United  States  and  Canada,  and  international  distribution  occurs  through  freight-
forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery to the 
domestic port.

Contract Balances

The Company typically does not incur costs that are required to be capitalized in connection with obtaining a contract with a 
customer. The Company typically does not have any performance obligations to deliver products under its contracts until its 
customers submit a purchase order, as it stands ready to deliver product upon receipt of a purchase order under contracts with 
its customers. These performance obligations are generally satisfied within a very short period of time. Therefore, the Company 
has utilized the practical expedient that provides an exemption from disclosure of the transaction price allocated to remaining 
performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or 
less. The Company does not typically receive pre-payments from its customers.

Customer payments are due when control of goods or services are transferred to the customer and are typically not conditional 
on anything other than payment terms, which typically are less than 30 days. Since no significant financing components exist 
between the period of time the Company transfers goods or services to the customer and when it receives payment for those 
goods or services, the Company generally does not adjust the transaction price to recognize a financing component. Customer 
incentives  are  not  considered  contract  assets  as  they  are  not  generated  through  the  transfer  of  goods  or  services  to  the 
customers. No material contract asset or liability exists for any period reported within these Consolidated Financial Statements.

Accounts and Notes Receivable Balances

Accounts and notes receivable are as follows:

(in millions)

Customer accounts receivable

Allowance for uncollectible receivables 

Other receivables, net

Accounts receivable, net

Notes receivable, net, included within Prepaid expenses and other current assets

Long-term notes receivable, net, included within Other long-term assets

July 29, 2023

July 30, 2022

$ 

$ 

$ 

$ 

887  $ 

(17)   

19 

1,213 

(18) 

19 

889  $ 

1,214 

3  $ 

7  $ 

6 

12 

The allowance for uncollectible receivables, and estimated variable consideration allowed for as sales concessions consists of 
the following:

2023

2022

2021

$ 

18  $ 

28  $ 

— 

2 

6 

(9)   

17  $ 

— 

2 

1 

(13)   

18  $ 

56 

4 

(9) 

3 

(26) 

28 

(in millions)

Balance at beginning of year

Impact of adoption of new credit loss standard

Provision for losses in Operating expenses

Reductions of Net sales

Write-offs charged against the allowance

Balance at end of year

$ 

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On  October  31,  2022,  the  Company  entered  into  a  purchase  agreement  with  a  third-party  financial  institution  for  the  sale  of 
certain  customer  accounts  receivable  up  to  a  maximum  outstanding  amount  of  $300  million,  without  recourse,  subject  to 
eligibility criteria established by the financial institution. Pursuant to the terms of the agreement, certain customer receivables 
are sold to the third-party financial institution on a revolving basis, subject to certain limitations. After these sales, the Company 
does not retain any interest in the receivables. The Company’s continuing involvement in transferred receivables is limited to 
servicing  the  receivables.  On  June  27,  2023,  the  Company  entered  into  an  amendment  to  the  purchase  agreement,  which 
increased the maximum outstanding amount from $300 million to $350 million.

Accounts  receivable  that  the  Company  is  servicing  on  behalf  of  the  financial  institution,  which  would  have  otherwise  been 
outstanding as of July 29, 2023, was approximately $310 million. Net proceeds received are included within net cash provided 
by operating activities in the Consolidated Statements of Cash Flows in the period of sale. The loss on sale of receivables was 
$14  million  for  fiscal  2023,  and  is  recorded  within  Loss  (gain)  on  sale  of  assets  and  other  asset  charges  in  the  Consolidated 
Statements of Operations.

NOTE 4—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES 

Restructuring, acquisition and integration related expenses were as follows:

(in millions)
Restructuring and integration costs
Closed property charges and costs
Total

Restructuring and Integration Costs

2023

2022

2021

$ 

$ 

8  $ 
— 
8  $ 

20  $ 
1 
21  $ 

50 
6 
56 

Restructuring and integration costs for fiscal 2023 primarily relate to severance costs due to the regional restructuring during 
the fourth quarter. Fiscal 2022 restructuring and integration costs primarily relate to the finalization of integration costs related 
to  the  Supervalu  acquisition.  Fiscal  2021  restructuring  and  integration  costs  primarily  relate  to  certain  professional  fees  for 
advisory and transformational activities. 

Closed Property Charges and Costs

In fiscal 2021, closed property charges relate to lease, and property and equipment asset impairments related to retail stores, 
lease terminations of non-operating stores and distribution center consolidation.

NOTE 5—PROPERTY AND EQUIPMENT, NET 

Property and equipment, net consisted of the following:

(in millions)
Land
Buildings and improvements
Leasehold improvements
Equipment
Motor vehicles
Finance lease assets
Construction in progress
Property and equipment
Less accumulated depreciation and amortization
Property and equipment, net

Original
Estimated
Useful Lives

10 - 40 years
10 - 20 years
3 - 25 years
5 - 8 years
1 - 9 years

2023

2022

136  $ 

1,024 
284 
1,280 
56 
48 
186 
3,014 
1,247 
1,767  $ 

137 
998 
241 
1,130 
66 
58 
140 
2,770 
1,080 
1,690 

  $ 

  $ 

The Company capitalized $5 million, $4 million and $3 million of interest during fiscal 2023, 2022 and 2021, respectively.

Depreciation and amortization expense on property and equipment was $232 million, $213 million and $209 million for fiscal 
2023, 2022 and 2021, respectively.

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NOTE 6—GOODWILL AND INTANGIBLE ASSETS, NET 

The Company has five goodwill reporting units: two of which represent separate operating segments and are aggregated within 
the  Wholesale  reportable  segment  (U.S.  Wholesale  and  Canada  Wholesale);  one  of  which  is  a  separate  Retail  operating  and 
reportable segment and two of which are separate operating segments (Woodstock Farms and Blue Marble Brands) that do not 
meet  the  criteria  for  being  disclosed  as  separate  reportable  segments  and  are  included  in  the  Other  segment.  The  Canada 
Wholesale operating segment, which is aggregated with U.S. Wholesale, would not meet the quantitative thresholds for separate 
reporting if it did not meet the aggregation criteria.

In the fourth quarter of fiscal 2023, 2022 and 2021 the Company performed its annual goodwill qualitative impairment review 
and determined that a quantitative impairment test was not required for any of its reporting units.

Goodwill and Intangible Assets Changes

Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:

(in millions)
Goodwill as of July 31, 2021(1)(2)
  Change in foreign exchange rates
Goodwill as of July 30, 2022(1)(2)
  Change in foreign exchange rates
Goodwill as of July 29, 2023(1)(2)

Wholesale

Other

Total

$ 

$ 

10  $ 
— 
10 
— 
10  $ 

10  $ 
— 
10 
— 
10  $ 

(1)  Wholesale amounts are net of accumulated goodwill impairment charges of $717 million for fiscal 2021, 2022 and 2023.

(2)  Other amounts are net of accumulated goodwill impairment charges of $10 million for fiscal 2021, 2022 and 2023.

Identifiable intangible assets, net consisted of the following:

$ 

(in millions)
Amortizing intangible assets:

Customer relationships
Pharmacy prescription files
Operating lease intangibles
Trademarks and tradenames
Total amortizing intangible assets
Indefinite lived intangible assets:
Trademarks and tradenames

Intangibles assets, net

$ 

2023

2022

Gross 
Carrying 
Amount

Accumulated 
Amortization

Net

Gross 
Carrying 
Amount

Accumulated 
Amortization

Net

1,007  $ 
33 
6 
89 
1,135 

25 
1,160  $ 

354  $ 
22 
5 
57 
438 

— 
438  $ 

653  $ 
11 
1 
32 
697 

25 
722  $ 

1,007  $ 
33 
6 
84 
1,130 

56 
1,186  $ 

294  $ 
18 
4 
51 
367 

— 
367  $ 

20 
— 
20 
— 
20 

713 
15 
2 
33 
763 

56 
819 

The Company performed annual qualitative reviews of its indefinite lived trademarks and tradenames in fiscal 2022 and 2021, 
which indicated a quantitative assessment was not required.

In  the  fourth  quarter  of  fiscal  2023,  the  Company  decided  to  rationalize  certain  of  its  brands  within  its  Blue  Marble  Brands 
portfolio, resulting in an abandonment of certain brands and a shortened life of remaining brand-related intangible assets. These 
changes are part of an effort for the Company to focus on its core private brand offerings. As a result, the Company recorded a 
$25 million intangible asset impairment charge in fiscal 2023 and began amortizing the remaining intangible assets associated 
with its Blue Marble Brands portfolio. The fair values utilized in the Company’s quantitative assessment were determined using 
the income approach, discounting projected future net cash flows based on management’s expectations of the current and future 
operating environment for each brand. The impairment charge is recorded within Loss (gain) on sale of assets and other asset 
charges in the Consolidated Statements of Operations.

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Amortization expense was $72 million, $72 million and $78 million for fiscal 2023, 2022 and 2021, respectively. The estimated 
future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of 
July 29, 2023 is as shown below:

Fiscal Year:
2024
2025
2026
2027
2028
Thereafter

(in millions)

$ 

$ 

74 
71 
67 
64 
62 
359 
697 

NOTE 7—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS 

Recurring Fair Value Measurements

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

(in millions)

Assets:

Interest rate swaps designated as 

hedging instruments

Interest rate swaps designated as 

hedging instruments

Liabilities:

Fuel derivatives designated as hedging 

instruments

Consolidated Balance Sheets Location

Fair Value at July 29, 2023
Level 2

Level 3

Level 1

Prepaid expenses and other current assets

Other long-term assets

$ 

$ 

—  $ 

17  $ 

—  $ 

5  $ 

— 

— 

Accrued expenses and other current liabilities

$ 

—  $ 

1  $ 

— 

(in millions)

Assets:

Consolidated Balance Sheets Location

Fuel derivatives designated as hedging 

instruments

Interest rate swaps designated as 

hedging instruments

Interest rate swaps designated as 

hedging instruments

Prepaid expenses and other current assets

Prepaid expenses and other current assets

Other long-term assets

Liabilities:

Interest rate swaps designated as 

hedging instruments

Interest Rate Swap Contracts

Other long-term liabilities

Fair Value at July 30, 2022
Level 2

Level 3

Level 1

$ 

$ 

$ 

$ 

—  $ 

—  $ 

—  $ 

3  $ 

3  $ 

1  $ 

— 

— 

— 

—  $ 

2  $ 

— 

The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued 
using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, 
SOFR swap rates and credit default swap rates. As of July 29, 2023, a 100-basis point increase in forward SOFR interest rates 
would  increase  the  fair  value  of  the  interest  rate  swaps  by  approximately  $8  million;  a  100-basis  point  decrease  in  forward 
SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $8 million. Refer to Note 8—
Derivatives for further information on interest rate swap contracts.

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Fuel Supply Agreements and Derivatives

To  reduce  diesel  fuel  price  risk,  the  Company  has  entered  into  derivative  financial  instruments  and/or  forward  purchase 
commitments for a portion of our projected monthly diesel fuel requirements at fixed prices. The fair values of fuel derivative 
agreements are measured using Level 2 inputs.

Foreign Exchange Derivatives

To reduce foreign exchange risk, the Company has entered into derivative financial instruments for a portion of our projected 
monthly  foreign  currency  requirements  at  fixed  prices.  The  fair  values  of  foreign  exchange  derivatives  are  measured  using 
Level 2 inputs. 

Fair Value Estimates

For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued 
vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to 
their  short  maturities.  The  fair  value  of  notes  receivable  is  estimated  by  using  a  discounted  cash  flow  approach  prior  to 
consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. 
The  fair  value  of  debt  is  estimated  based  on  market  quotes,  where  available,  or  market  values  for  similar  instruments,  using 
Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts 
and debt issuance costs. Refer to Note 1—Significant Accounting Policies for additional information regarding the fair value 
hierarchy.

(in millions)
Notes receivable, including current portion
Long-term debt, including current portion

NOTE 8—DERIVATIVES 

Management of Interest Rate Risk

July 29, 2023

July 30, 2022

Carrying Value
$ 
$ 

15  $ 
1,963  $ 

Fair Value

Carrying Value

Fair Value

8  $ 
1,903  $ 

23  $ 
2,123  $ 

17 
2,153 

The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest 
rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts 
subject  to  fixed  and  floating  interest  rates.  Interest  rate  swap  contracts  are  entered  into  for  periods  consistent  with  related 
underlying  exposures  and  do  not  constitute  positions  independent  of  those  exposures.  The  Company’s  interest  rate  swap 
contracts are designated as cash flow hedges. Interest rate swap contracts are reflected at their fair values in the Consolidated 
Balance Sheets. Refer to Note 7—Fair Value Measurements of Financial Instruments for further information on the fair value 
of interest rate swap contracts.

Details of active swap contracts as of July 29, 2023, which are all pay fixed and receive floating, are as follows:

Effective Date
November 30, 2018
October 26, 2018
January 11, 2019
January 23, 2019
November 30, 2018
January 11, 2019
January 24, 2019
October 26, 2018
November 16, 2018
November 16, 2018
January 24, 2019

Swap Maturity
September 30, 2023
October 31, 2023
March 28, 2024
March 28, 2024
October 31, 2024
October 31, 2024
October 31, 2024
October 22, 2025
October 22, 2025
October 22, 2025
October 22, 2025

Notional Value 
(in millions)

Pay Fixed Rate

Receive Floating Rate

 2.6980 % One-Month Term SOFR
 2.7880 % One-Month Term SOFR
 2.3600 % One-Month Term SOFR
 2.4250 % One-Month Term SOFR
 2.7385 % One-Month Term SOFR
 2.4025 % One-Month Term SOFR
 2.4090 % One-Month Term SOFR
 2.8725 % One-Month Term SOFR
 2.8750 % One-Month Term SOFR
 2.8380 % One-Month Term SOFR
 2.4750 % One-Month Term SOFR

50 
100 
100 
100 
100 
100 
50 
50 
50 
50 
50 
800 

69

$ 

Floating Rate 
Reset Terms
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly

 
 
 
 
 
 
 
 
 
 
 
 
 Table of Contents

In fiscal 2021, in order to reduce its exposure to pay fixed and receive floating interest rate swap contracts due to lower levels 
of debt balances with floating interest rates, the Company paid $6 million to terminate certain outstanding interest rate swaps 
with  a  notional  amount  of  $250  million.  In  addition,  in  fiscal  2021,  in  conjunction  with  the  $500  million  fixed  rate  senior 
unsecured notes offering described below in Note 9—Long-Term Debt, the Company paid $11 million to terminate or novate 
certain outstanding interest rate swaps with a notional amount of $504 million and certain forward starting interest rate swaps 
with  a  notional  amount  of  $450  million.  The  payments  equaled  the  fair  value  of  the  interest  rate  swaps  at  the  time  of  their 
termination  or  novation.  No  gain  or  loss  was  recorded  as  a  result  of  the  swap  terminations  and  novations.  Since  the  hedged 
interest payments remain probable of occurring, the unrecognized gains and losses that existed as of the early termination or 
novation  of  these  interest  rate  swap  agreements  will  be  amortized  out  of  Accumulated  other  comprehensive  loss  and  into 
Interest expense, net over the remaining period of the original terminated or novated interest rate swap agreements. If any of the 
hedged  interest  payments  were  not  probable  of  occurring,  then  a  charge  representing  an  accelerated  amortization  of  the 
unrecognized  gains  and  losses  would  be  recorded.  Cash  payments  resulting  from  the  termination  or  novation  of  interest  rate 
swaps are classified as operating activities in the Company’s Consolidated Statements of Cash Flows.

The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in 
the  period  in  which  the  hedging  transaction  is  entered.  Under  this  method,  the  Company  assesses  the  effectiveness  of  each 
hedging  relationship  by  comparing  the  changes  in  cash  flows  of  the  derivative  hedging  instrument  with  the  changes  in  cash 
flows  of  the  designated  hedged  transactions.  In  future  reporting  periods,  the  Company  performs  a  qualitative  analysis  for 
quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty 
default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair 
value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Consolidated Statements 
of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Consolidated Statements of 
Operations when the hedged transactions affect earnings.

The  location  and  amount  of  gains  or  losses  recognized  in  the  Consolidated  Statements  of  Operations  for  interest  rate  swap 
contracts for each of the periods, presented on a pre-tax basis, are as follows:

(In millions)
Total amounts of expense line items presented in the Consolidated 

Statements of Operations in which the effects of cash flow hedges are 
recorded

Loss on cash flow hedging relationships:

Gain (loss) reclassified from comprehensive income into earnings

$ 

$ 

Interest Expense, net
2022

2021

2023

144  $ 

155  $ 

204 

12  $ 

(36)  $ 

(46) 

NOTE 9—LONG-TERM DEBT 

The Company’s long-term debt consisted of the following:

(in millions)
Term Loan Facility
ABL Credit Facility
Senior Notes
Other secured loans
Debt issuance costs, net
Original issue discount on debt
Long-term debt, including current portion
Less: current portion of long-term debt
Long-term debt

Average 
Interest Rate at
July 29, 2023
8.47%
6.31%
6.75%
4.78%

Fiscal Maturity 
Year
2026
2027
2029
2024-2025

70

July 29, 2023
$ 

July 30, 2022

670  $ 
812 
500 
9 
(22)   
(6)   

1,963 

(7)   
1,956  $ 

$ 

800 
840 
500 
23 
(29) 
(11) 
2,123 
(14) 
2,109 

 
 
 
 
 
 
 
 
 
 
 
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Future  maturities  of  long-term  debt,  excluding  debt  issuance  costs  and  original  issue  and  purchase  accounting  discounts  on 
debt, and contractual interest payments based on the face value and applicable interest rate as of July 29, 2023, consist of the 
following (in millions):

Fiscal Year
2024
2025
2026
2027
2028
2029 and thereafter

Senior Notes 

Long-term 
debt maturity
$ 

Interest on 
long-term debt
153 
143 
99 
77 
34 
17 
523 

8  $ 
1 
670 
812 
— 
500 
1,991  $ 

$ 

On October 22, 2020, the Company issued $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior 
Notes”). The Senior Notes, which are presented net of debt issuance costs of $7 million as of July 29, 2023 and $7 million as of 
July  30,  2022  in  the  Consolidated  Balance  Sheets,  are  guaranteed  by  each  of  the  Company’s  subsidiaries  that  are  borrowers 
under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below). 

ABL Credit Facility

The revolving credit agreement dated as of June 3, 2022, (the “ABL Loan Agreement”), by and among the Company (the “ U.S. 
Borrower”)  and  UNFI  Canada  (the  “Canadian  Borrower”  and,  together  with  the  U.S.  Borrower,  the  “Borrowers”),  and  the 
financial  institutions  that  are  parties  thereto  as  lenders  (collectively,  the  “ABL  Lenders”),  Wells  Fargo  Bank,  N.A.  as 
administrative  agent  for  the  ABL  Lenders,  and  the  other  parties  thereto,  provides  for  a  secured  asset-based  revolving  credit 
facility  (the  “ABL  Credit  Facility”),  of  which  up  to  $2,600  million  is  available  to  the  Borrowers,  including  a  U.S.  Dollar 
equivalent of $100 million sublimit for borrowings in Canadian dollars. Under the ABL Loan Agreement, the Borrowers may, 
at  their  option,  increase  the  aggregate  amount  of  the  ABL  Credit  Facility  in  an  amount  of  up  to  $750  million  without  the 
consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders 
committing to provide the increase in funding. There is no assurance that additional funding would be available.

The ABL Loan Agreement utilizes Term SOFR and Prime rates as the benchmark interest rates. Borrowings under the ABL 
Credit Facility bear interest at rates that, at the Borrowers’ option, can be either: (i) a base rate plus a 0.00% - 0.25% margin or 
(ii) a Term SOFR rate plus a 1.00% - 1.25% margin. Unutilized commitments under the ABL Credit Facility are subject to a per 
annum fee of 0.20%. The ABL Credit Facility will expire at the earlier of (i) June 3, 2027, and (ii) the date that is 90 days prior 
to the maturity date of the Term Loan Facility (defined below) if on such date more than $100 million of borrowings under the 
Term Loan Facility remain outstanding and mature prior to June 3, 2027. The ABL Loan Agreement subjects the Company to a 
fixed charge coverage ratio of at least 1.0 to 1.0 calculated at the end of each of the Company’s fiscal quarters on a rolling four 
quarter basis, if the adjusted aggregate availability is ever less than the greater of (i) $210 million and (ii) 10% of the aggregate 
Borrowing Base (as defined below). 

The  ABL  Loan  Agreement  contains  certain  operational  and  informational  covenants  customary  for  this  type  of  secured 
revolving credit facility, which limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur debt, 
declare or pay dividends or make other distributions to its stockholders, transfer or sell assets, create liens on our assets, engage 
in transactions with affiliates and merge, consolidate or sell all or substantially all of the Company’s and its subsidiaries’ assets 
on a consolidated basis. If the Company fails to comply with any of these covenants, it may be in default under the applicable 
debt agreement, and all amounts due thereunder may become immediately due and payable.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly-owned subsidiaries 
(collectively, the “Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL 
Credit  Facility  and  the  Guarantors’  obligations  under  the  related  guarantees  are  secured  by  (i)  a  first-priority  lien  on  certain 
accounts  receivable,  inventory  and  certain  other  assets  arising  therefrom  or  related  thereto  of  the  Borrowers  and  Guarantors 
(including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the 
Borrowers’  and  Guarantors’  assets  that  do  not  constitute  ABL  Assets,  in  each  case,  subject  to  customary  exceptions  and 
limitations.

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Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of 
eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% to 92.5% of the net orderly liquidation value 
of  eligible  inventory,  plus  90%  of  eligible  pharmacy  receivables,  plus  certain  pharmacy  prescription  files  availability  to  the 
Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under 
the ABL Credit Facility (currently $2,600 million) or the Borrowing Base. 

The assets included in the Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a 
first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:

Assets securing the ABL Credit Facility (in millions):
Certain inventory assets included in Inventories, net 
Certain receivables included in Accounts receivable, net 
Pharmacy prescription files included in Intangible assets, net
Total 

July 29, 2023

July 30, 2022

$ 

$ 

1,861  $ 
571 
11 
2,443  $ 

1,789 
878 
15 
2,682 

As of July 29, 2023, the Borrowers’ Borrowing Base, net of $121 million of reserves, was $2,442 million, which is below the 
$2,600 million limit of availability, resulting in total availability of $2,442 million for loans and letters of credit under the ABL 
Credit Facility. As of July 29, 2023, the Borrowers had $812 million of loans outstanding under the ABL Credit Facility, which 
are presented net of debt issuance costs of $8 million and are included in Long-term debt in the Consolidated Balance Sheets. 
As of July 29, 2023, the U.S. Borrowers had $150 million in letters of credit outstanding under the ABL Credit Facility. The 
Company’s resulting remaining availability under the ABL Credit Facility was $1,480 million as of July 29, 2023.

Availability under the ABL Credit Facility (in millions):
Total availability for ABL loans and letters of credit
ABL loans
Letters of credit
Unused credit

July 29, 2023

$ 
$ 
$ 
$ 

2,442 
812 
150 
1,480 

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and 
are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as 
follows:

Interest rates and fees under the ABL Credit Facility: 
Borrowers’ applicable margin for base rate loans
Borrowers’ applicable margin for SOFR and BA loans(1)
Unutilized commitment fees
Letter of credit fees

Range of Facility Rates and 
Fees (per annum)
0.00% - 0.25%
1.00% - 1.25%
0.20%
1.125% - 1.375%

July 29, 2023

 0.00 %
 1.00 %
 0.20 %
 1.125 %

(1) The U.S. Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Term Loan Facility

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company 
and  SUPERVALU  INC.  (“Supervalu”  and,  collectively  with  the  Company,  the  “Term  Borrowers”),  the  financial  institutions 
that  are  parties  thereto  as  lenders,  Credit  Suisse,  as  administrative  agent  for  the  Term  Lenders,  and  the  other  parties  thereto, 
provides  for  senior  secured  first  lien  term  loans  in  an  initial  aggregate  principal  amount  of  $1,950  million,  consisting  of  a 
$1,800  million  seven-year  tranche  and  a  $150  million  364-day  tranche  that  was  repaid  in  fiscal  2020  (the  “Term  Loan 
Facility”). The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction 
costs. Any amounts then outstanding will be payable in full on October 22, 2025.

Under the Term Loan Agreement, the Company may, at its option, increase the amount of the Term Loan Facility, add one or 
more  additional  tranches  of  term  loans  or  add  one  or  more  additional  tranches  of  revolving  credit  commitments,  without  the 
consent of any Term Lenders not participating in such additional borrowings, up to an aggregate amount of $656 million plus 
additional amounts based on satisfaction of certain leverage ratio tests, subject to certain customary conditions and applicable 
lenders committing to provide the additional funding. There can be no assurance that additional funding would be available.

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The  obligations  under  the  Term  Loan  Facility  are  guaranteed  by  the  Guarantors,  subject  to  customary  exceptions  and 
limitations. The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related 
guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other 
than  the  ABL  Assets  and  (ii)  a  second-priority  lien  on  substantially  all  of  the  Term  Borrowers’  and  the  Guarantors’  ABL 
Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net 
book  values  of  less  than  $10  million.  As  of  July  29,  2023  and  July  30,  2022,  there  was  $617  million  and  $629  million, 
respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Consolidated 
Balance Sheets.

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an 
aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to  75 percent depending on the 
Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term 
Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year. Based on the 
Company’s Consolidated First Lien Net Leverage Ratio at the end of fiscal 2023, no prepayment from Excess Cash Flow in 
fiscal 2023 is required to be made in fiscal 2024. 

As  of  July  29,  2023,  the  Company  had  borrowings  of  $670  million  outstanding  under  the  Term  Loan  Facility,  which  are 
presented in the Consolidated Balance Sheets net of debt issuance costs of $7 million and an original issue discount on debt of 
$6 million. As of July 29, 2023, no amount of the Term Loan Facility was classified as current.

As of July 29, 2023, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can 
be either: (i) a base rate plus a margin of 2.25% or (ii) a SOFR rate plus a margin of 3.25%, provided that the SOFR rate shall 
never be less than 0.0%. 

On November 10, 2021, the Company made a voluntary prepayment of $150 million on the Term Loan Facility funded with 
incremental borrowings under the then outstanding ABL Credit Facility that reduced its interest costs. In connection with this 
prepayment, the Company incurred a loss on debt extinguishment of $5 million related to unamortized debt issuance costs and a 
loss  on  unamortized  original  issue  discount,  which  was  recorded  within  Interest  expense,  net  in  the  second  quarter  of  fiscal 
2022. 

On November 7, 2022, the Company made a $125 million voluntary prepayment on the Term Loan Facility with a portion of 
the  proceeds  received  from  monetizing  certain  receivables  previously  within  accounts  receivable,  net  associated  with  the 
Company’s  purchase  agreement  with  a  third-party  financial  institution  as  previously  discussed  within  Note  3—Revenue 
Recognition.

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NOTE 10—COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS 

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023, 2022 and 2021 are as follows:

(in millions)

Other Cash 
Flow 
Derivatives

Benefit 
Plans

Foreign 
Currency

Swap 
Agreements

Total

Accumulated other comprehensive loss at August 1, 2020

$ 

—  $ 

(116)  $ 

(21)  $ 

(102)  $ 

(239) 

Other comprehensive income before reclassifications

Amortization of amounts included in net periodic benefit income

Amortization of cash flow hedges

 Settlement gain

Net current period Other comprehensive income

1 

— 

(1) 

— 

— 

167 

(2) 

— 

(12) 

153 

5 

— 

— 

— 

5 

8 

— 

34 

— 

42 

Accumulated other comprehensive income (loss) at July 31, 2021

$ 

—  $ 

37  $ 

(16)  $ 

(60)  $ 

Other comprehensive (loss) income before reclassifications

Amortization of amounts included in net periodic benefit income

Amortization of cash flow hedges

Net current period Other comprehensive income (loss)

— 

— 

2 

2 

(42) 

2 

— 

(40) 

(3) 

— 

— 

(3) 

34 

— 

26 

60 

181 

(2) 

33 

(12) 

200 

(39) 

(11) 

2 

28 

19 

Accumulated other comprehensive income (loss) at July 30, 2022

$ 

2  $ 

(3)  $ 

(19)  $ 

—  $ 

(20) 

Other comprehensive (loss) income before reclassifications

Amortization of amounts included in net periodic benefit income

Amortization of cash flow hedges

Net current period Other comprehensive (loss) income

— 

— 

(2) 

(2) 

(20) 

2 

— 

(18) 

(2) 

— 

— 

(2) 

23 

— 

(9) 

14 

Accumulated other comprehensive (loss) income at July 29, 2023

$ 

—  $ 

(21)  $ 

(21)  $ 

14  $ 

1 

2 

(11) 

(8) 

(28) 

Items  reclassified  out  of  Accumulated  other  comprehensive  (loss)  income  had  the  following  impact  on  the  Consolidated 
Statements of Operations:

(in millions)

2023

2022

2021

Affected Line Item on the Consolidated 
Statements of Operations

Pension and postretirement benefit plan obligations:

Amortization of amounts included in net periodic 

benefit cost (income)(1)

$ 

3  $ 

4  $ 

(1) 

Settlement gain

Total reclassifications
Income tax (benefit) expense

Total reclassifications, net of tax

Swap agreements:

Reclassification of cash flow hedge

Income tax expense (benefit)

Total reclassifications, net of tax

Other cash flow hedges:

Reclassification of cash flow hedge

Income tax expense

Total reclassifications, net of tax

$ 

$ 

$ 

$ 

$ 

Net periodic benefit income, 
excluding service cost

Net periodic benefit income, 
excluding service cost

Provision for income taxes

— 

3 
(1) 

— 

4 
(2) 

2  $ 

2  $ 

(17) 

(18) 
4 

(14) 

(12)  $ 

36  $ 

46 

Interest expense, net

3 

(10) 

(12) 

Provision for income taxes

(9)  $ 

26  $ 

34 

(3)  $ 

1 

(2)  $ 

2  $ 

— 

2  $ 

(1) 

— 

(1) 

Cost of sales

Provision for income taxes

(1) Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification 

of net actuarial loss as reflected in Note 13—Benefit Plans.

As of July 29, 2023, the Company expects to reclassify $16 million related to unrealized derivative gains out of Accumulated 
other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

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NOTE 11—LEASES 

The  Company  leases  certain  of  its  distribution  centers,  retail  stores,  office  facilities,  transportation  equipment  and  other 
operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not 
contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities, net, are as follows (in millions):

Lease Type

Consolidated Balance Sheets Location

July 29, 2023

July 30, 2022

Operating lease assets

Finance lease assets

Total lease assets

Operating liabilities

Finance liabilities

Operating liabilities

Finance liabilities

Total lease liabilities

Operating lease assets

Property and equipment, net

Current portion of operating lease liabilities
Current portion of long-term debt and finance lease 
liabilities

Long-term operating lease liabilities

Long-term finance lease liabilities

$ 

$ 

$ 

1,228  $ 

14 

1,242  $ 

1,176 

22 

1,198 

180  $ 

156 

11 

1,099 

12 

$ 

1,302  $ 

13 

1,067 

23 

1,259 

Lease  assets  and  liabilities  presented  in  the  table  above  include  lease  contracts  related  to  our  discontinued  operations,  as  the 
Company expects to remain primarily obligated under these leases.  

The Company’s lease cost under ASC 842 is as follows (in millions):

Lease Expense Type

Operating lease cost

Short-term lease cost

Variable lease cost

Sublease income

Sublease income

Other sublease income, net

Net operating lease cost(1)
Amortization of leased assets

Interest on lease liabilities

Finance lease cost

Total net lease cost

Consolidated Statements of Operations 
Location

Operating expenses

Operating expenses

Operating expenses

Operating expenses

Net sales
Restructuring, acquisition and 
integration related expenses(2)

Operating expenses

Interest expense, net

2023

2022

2021

$ 

261  $ 

241  $ 

17 

73 

(8)   

(14)   

(1)   

328 
7 

3 
10 

19 

73 

(8)   

(17)   

(2)   

306 
10 

11 
21 

$ 

338  $ 

327  $ 

229 

29 

64 

(8) 

(20) 

(3) 
291 
13 

19 
32 

323 

(1) Rent  expense  as  presented  here  includes  $0  million,  $0  million  and  $2  million  in  fiscal  2023,  2022  and  2021,  respectively,  of 
operating  lease  rent  expense  related  to  stores  within  discontinued  operations,  but  for  which  GAAP  requires  the  expense  to  be 
included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as 
presented here also includes immaterial amounts of variable lease expense of discontinued operations.

(2)

Includes $27 million, $29 million and $31 million of lease expense in fiscal 2023, 2022 and 2021, respectively, and $(28) million, 
$(31) million, and $(33) million of lease income in fiscal 2023, 2022 and 2021, respectively, that is recorded within Restructuring, 
acquisition  and  integration  related  expenses  for  assigned  leases  related  to  previously  sold  locations  and  surplus,  non-operating 
properties for which the Company is restructuring its obligations.

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During fiscal 2022, the Company acquired the real property of a previously leased distribution center, which was classified as a 
finance  lease,  for  approximately  $153  million.  Immediately  following  this  acquisition,  the  Company  monetized  this  property 
through a sale-leaseback transaction, pursuant to which the Company received $225 million in aggregate proceeds for the sale 
of the property, which reflected the fair value of the property. Under the terms of the sale-leaseback agreement, the Company 
entered into a lease for the distribution center for a term of 15 years, which was classified as an operating lease. The Company 
recorded  a  pre-tax  gain  on  sale  of  approximately  $87  million  in  fiscal  2022  as  a  result  of  the  transactions,  which  primarily 
represented the pre-tax net proceeds. 

The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, 
including  assigned  leases  for  which  the  Company  has  future  minimum  lease  payment  obligations.  Future  minimum  lease 
payments  (“Lease  Liabilities”)  include  payments  to  be  made  by  the  Company  or  certain  third  parties  in  the  case  of  assigned 
noncancellable  operating  leases  and  finance  leases.  Future  minimum  lease  and  subtenant  rentals  (“Lease  Receipts”)  include 
expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to 
third parties, which they operate. As of July 29, 2023, these Lease Liabilities and Lease Receipts consisted of the following (in 
millions):

Fiscal Year
2024
2025
2026
2027
2028
Thereafter
Total undiscounted lease liabilities 

and receipts
Less interest(3)
Present value of lease liabilities
Less current lease liabilities
Long-term lease liabilities

Lease Liabilities

Lease Receipts

Operating 
Leases(1)

Finance 
Leases (2)

Operating 
Leases

Finance 
Leases

Net Lease Obligations
Finance 
Leases

Operating 
Leases

(41)  $ 
(31)   
(23)   
(15)   
(12)   
(24)   

—  $ 
— 
— 
— 
— 
— 

240  $ 
211 
183 
151 
139 
913 

(146)  $ 

—  $ 

1,837  $ 

13 
8 
4 
1 
— 
— 

26 

$ 

$ 

$ 

281  $ 
242 
206 
166 
151 
937 

1,983  $ 
(704)   
1,279 
(180)   
1,099  $ 

13  $ 
8 
4 
1 
— 
— 

26  $ 
(3) 
23 
(11) 
12 

(1) Operating lease payments include $2 million related to extension options that are reasonably certain of being exercised and exclude 

$787 million of legally binding undiscounted minimum lease payments for leases signed but not yet commenced.

(2) There were no finance leases for which the extension options are reasonably certain of being exercised and excluded from legally 

binding minimum lease payments for leases signed but not yet commenced.

(3) Calculated using the interest rate for each lease.

The following tables provide other information required by ASC 842:

Lease Term and Discount Rate

Weighted-average remaining lease term (years)

Operating leases

Finance leases

Weighted-average discount rate

Operating leases

Finance leases

July 29, 2023

July 30, 2022

9.7 years

2.9 years

10.4 years

3.3 years

 8.9 %

 9.8 %

 9.0 %

 9.3 %

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Other Information

(in millions)
Cash paid for amounts included in the measurement of lease liabilities

2023

2022

2021

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

Leased assets obtained in exchange for new finance lease liabilities
Leased assets obtained in exchange for new operating lease liabilities

$ 

$ 

$ 
$ 
$ 

249  $ 

2  $ 

10  $ 
—  $ 
237  $ 

224  $ 

7  $ 

160  $ 
1  $ 
292  $ 

220 

12 

9 
— 
263 

NOTE 12—SHARE-BASED AWARDS 

As of July 29, 2023, the Company has restricted stock awards and performance share units and stock options outstanding under 
two  equity  incentive  plans:  the  2012  Equity  Incentive  Plan,  as  amended  and  restated  (the  “2012  Plan”)  and  the  Second 
Amended and Restated 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”). The terms of each stock-based award 
will be determined by the Board of Directors or the Compensation Committee thereof. As of July 29, 2023, the Company has 
1.6 million shares authorized and available for grant under the 2020 Equity Incentive Plan. The authorization for new grants 
under the 2012 Plan has expired.

Share-Based Compensation Expense

The following table presents information regarding share-based compensation expenses and the related tax impacts:

(in millions)
Restricted stock awards
Supervalu replacement awards(1)
Performance-based share awards
Share-based compensation expense recorded in Operating expenses

Income tax benefit

Share-based compensation expense, net of tax

Share-based compensation expense recorded in Restructuring, acquisition 

and integration related expenses(2)
Income tax benefit

Share-based compensation expense recorded in Restructuring, acquisition 

and integration related expenses, net of tax

2023

2022

2021

$ 

$ 

$ 

$ 

35  $ 
— 
3 
38 
(10)   
28  $ 

—  $ 
— 

—  $ 

36  $ 
— 
7 
43 
(12)   
31  $ 

1  $ 
— 

1  $ 

36 
5 
8 
49 
(13) 
36 

1 
— 

1 

(1) Amounts are derived primarily from liability classified awards.

(2)

Includes equity classified awards of $1 million for fiscal 2022 and fiscal 2021, respectively.

Vesting  requirements  for  awards  are  generally  at  the  discretion  of  the  Company’s  Board  of  Directors  or  the  Compensation 
Committee thereof. Time-based vesting awards for employees typically vest in three or four equal installments. The Board of 
Directors has adopted a policy in connection with the 2020 Equity Incentive Plan that sets forth grant, vesting and settlement 
dates  for  equity  awards,  a  one-year  vesting  period  for  awards  issued  to  non-employee  directors,  and  a  three-year  equal 
installment  vesting  period  for  designated  employee  restricted  stock  awards.  Performance  awards  have  a  three-year  cliff  vest, 
subject  to  achievement  of  the  performance  objective.  As  of  July  29,  2023,  there  was  $45  million  of  total  unrecognized 
compensation  cost  related  to  outstanding  share-based  compensation  arrangements  (including  restricted  stock  units  and 
performance-based restricted stock units). This cost is expected to be recognized over a weighted-average period of 1.9 years. 

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Restricted Stock Awards

The fair value of restricted stock units and performance share units are determined based on the number of units granted and the 
quoted  price  of  the  Company’s  common  stock  as  of  the  grant  date.  The  following  summary  presents  information  regarding 
restricted stock units, Supervalu Replacement Awards and performance share units:

Outstanding at August 1, 2020

Granted
Vested
Forfeited/Canceled

Outstanding at July 31, 2021

Granted
Vested
Forfeited/Canceled

Outstanding at July 30, 2022

Granted
Vested
Forfeited/Canceled

Outstanding at July 29, 2023

Number
of Shares
(in millions)

Weighted 
Average
Grant-Date
Fair Value

7.4  $ 
2.4 
(2.6)   
(0.4)   
6.8 
1.2 
(2.8)   
(0.3)   
4.9 
1.7 
(3.1)   
(0.3)   
3.2  $ 

18.54 
17.55 
19.94 
24.11 
17.33 
45.46 
42.06 
37.68 
20.02 
35.01 
35.48 
21.55 
32.11 

(in millions)
Intrinsic value of restricted stock units vested

2023

2022

2021

$ 

113  $ 

125  $ 

51 

Performance-Based Share Awards

During  fiscal  2023,  the  Company  granted  0.4  million  performance  share  units,  included  in  the  granted  number  in  the  above 
table, to its executives and other senior leaders (subject to the issuance of up to 0.4 million additional shares if the Company’s 
performance  exceeds  specified  targeted  levels)  with  a  weighted  average  grant-date  fair  value  of  $36.87.  These  performance 
units  are  tied  to  fiscal  2023,  2024  and  2025  performance  metrics,  including  adjusted  earnings  per  share  (“EPS”)  growth  and 
adjusted return on invested capital (“ROIC”). An insignificant amount of performance share units granted in fiscal 2023 were 
forfeited during fiscal 2023. 

During fiscal 2022, the Company granted 0.3 million performance share units to its executives and other senior leaders (subject 
to the issuance of up to 0.3 million additional shares if the Company’s performance exceeds specified targeted levels) with a 
weighted average grant-date fair value of $49.31. These performance units are tied to fiscal 2022, 2023 and 2024 performance 
metrics,  including  adjusted  EPS  growth  and  adjusted  ROIC.  An  insignificant  amount  of  performance  share  units  granted  in 
fiscal 2022 were forfeited during fiscal 2023. 

During fiscal 2021, the Company granted 0.5 million performance share units to its executives and other senior leaders (subject 
to the issuance of up to 0.3 million additional shares if the Company’s performance exceeds specified targeted levels) with a 
weighted average grant-date fair value of $18.19. These performance units were tied to fiscal 2021, 2022 and 2023 performance 
metrics,  including  adjusted  EPS  growth,  adjusted  ROIC  and  adjusted  EBITDA  leverage.  An  insignificant  amount  of 
performance  share  units  granted  in  fiscal  2021  were  forfeited  during  fiscal  2023.  Based  on  performance  through  the 
performance  period  ended  July  29,  2023,  0.3  million  performance  share  units  have  been  earned  and  will  be  issued  in  fiscal 
2024.

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Stock Options

The  Company  did  not  grant  options  in  fiscal  2023,  2022  or  2021.  The  following  summary  presents  information  regarding 
outstanding stock options as of July 29, 2023 and changes during the fiscal year then ended:

Outstanding at beginning of year

Exercised
Canceled

Outstanding at end of year
Exercisable at end of year

Number
of Options
(in millions)

Weighted
Average
Exercise
Price

0.5  $ 
— 
(0.2)   
0.3 
0.3  $ 

54.11 
37.02 
52.08 
— 
55.46 

Weighted
Average
Remaining
Contractual
Term
1.6 years

Aggregate
Intrinsic
Value

1.1 years $ 
1.1 years $ 

— 
— 

The aggregate intrinsic value of options exercised during fiscal 2023, 2022 and 2021 was $0 million, $2 million and $1 million, 
respectively.

Supervalu Replacement Awards

Pursuant to the Agreement and Plan of Merger, dated July 25, 2018, by and among Supervalu, SUPERVALU Enterprises, Inc., 
the company and Jedi Merger Sub, Inc., dated as of July 25, 2018, as amended on October 10, 2018 (the “Merger Agreement”), 
each outstanding Supervalu stock option, whether vested or unvested, that was unexercised immediately prior to the effective 
time  of  the  merger  (“SVU  Option”)  was  converted,  effective  as  of  the  effective  time  of  the  merger,  into  a  stock  option 
exercisable for shares of common stock of the Company (“Supervalu Replacement Options”) in accordance with the adjustment 
provisions of the Supervalu stock. In addition, each outstanding Supervalu restricted share award, restricted stock unit award, 
deferred share unit award and performance share unit award (“SVU Equity Award”) was converted, effective as of the effective 
time  of  the  merger,  into  time-vesting  awards  (“Supervalu  Replacement  Award”)  with  a  settlement  value  equal  to  the  merger 
consideration of $32.50 per share multiplied by the number of shares of Supervalu common stock subject to such SVU Equity 
Award. The Supervalu Replacement Awards were liability classified awards as they were ultimately settled in cash or shares at 
the discretion of the employee. The Supervalu Replacement Awards liabilities were expensed over the service period based on 
the fixed value of $32.50 per share. As of the end of fiscal 2022, there were no longer any outstanding Supervalu Replacement 
Awards.

NOTE 13—BENEFIT PLANS 

The  Company’s  employees  who  participate  are  covered  by  various  contributory  and  non-contributory  pension,  401(k)  plans, 
and  other  health  and  welfare  benefits.  The  Company’s  primary  defined  benefit  pension  plans  are  the  SUPERVALU  INC. 
Retirement Plans and certain supplemental executive retirement plans. These plans were closed to new participants and service 
crediting ended for all participants as of December 31, 2007. Pay increases were reflected in the amount of benefits accrued in 
these plans until December 31, 2012. Approximately 65% of the 10,667 union employees participate in multiemployer defined 
benefit  pension  plans  under  collective  bargaining  agreements.  The  remaining  either  participate  in  plans  sponsored  by  the 
Company  or  are  not  currently  eligible  to  participate  in  a  retirement  plan.  In  addition  to  sponsoring  both  defined  benefit  and 
defined contribution pension plans, the Company provides healthcare and life insurance benefits for eligible retired employees 
under postretirement benefit plans. The Company also provides certain health and welfare benefits, including short-term and 
long-term disability benefits, to inactive disabled employees prior to retirement. The terms of the postretirement benefit plans 
vary  based  on  employment  history,  age  and  date  of  retirement.  For  many  retirees,  the  Company  provides  a  fixed  dollar 
contribution and retirees pay contributions to fund the remaining cost.

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Defined Benefit Pension and Other Postretirement Benefit Plans

For  the  defined  benefit  pension  plans,  the  accumulated  benefit  obligation  is  equal  to  the  projected  benefit  obligation.  The 
benefit  obligation,  fair  value  of  plan  assets  and  funded  status  of  our  defined  benefit  pension  plans  and  other  postretirement 
benefit plans consisted of the following:

(in millions)

Changes in Benefit Obligation

2023

2022

Pension 
Benefits

Other 
Postretirement 
Benefits

Pension 
Benefits

Other 
Postretirement 
Benefits

Benefit obligation at beginning of year

$ 

1,706  $ 

12  $ 

2,093  $ 

Actuarial gain

Benefits paid

Interest cost

Settlements paid

Benefit obligation at end of year

Changes in Plan Assets
Fair value of plan assets at beginning of year

Actual return on plan assets

Benefits paid

Settlements paid

Employer contributions

Fair value of plan assets at end of year

Funded (unfunded) status at end of year

(121) 

(103) 

63 

— 

1,545 

1,716 

(55) 

(103) 

— 

1 

1,559 

(1) 

— 

— 

— 

11 

— 

— 

(1) 

— 

1 

— 

(322) 

(103) 

38 

— 

1,706 

2,118 

(300) 

(103) 

— 

1 

1,716 

18 

(4) 

(1) 

— 

(1) 

12 

— 

— 

(1) 

(1) 

2 

— 

$ 

14  $ 

(11)  $ 

10  $ 

(12) 

The actuarial gain on projected pension benefit obligations in fiscal 2023 was primarily the result of a 81 basis points increase 
in the discount rate on the SUPERVALU INC. Retirement Plan. The actuarial gain on projected pension benefit obligations in 
fiscal 2022 was primarily the result of a 158 basis points increase in the discount rate on the SUPERVALU INC. Retirement 
Plan, and updated mortality assumptions. 

The  funded  status  of  our  pension  benefits  contains  plans  with  individually  funded  and  underfunded  statuses.  Our  other 
postretirement  benefits  consist  of  one  plan  as  shown  above.  The  following  table  provides  the  funded  status  of  individual 
projected pension benefit plan obligations and the fair value of plan assets for these plans:

(in millions)

July 29, 2023:

Fair value of plan assets at end of year

Benefit obligation at end of year

Funded (unfunded) status at end of year

July 30, 2022:

Fair value of plan assets at end of year

Benefit obligation at end of year

Funded (unfunded) status at end of year

SUPERVALU INC. 
Retirement Plan

Other Pension Plan

Total Pension 
Benefits 

$ 

$ 

1,559  $ 

(1,539)   

20  $ 

—  $ 

(6)   

(6)  $ 

1,559 

(1,545) 

14 

SUPERVALU INC. 
Retirement Plan

Other Pension Plan

Total Pension 
Benefits

$ 

$ 

1,716  $ 

(1,698)   

18  $ 

—  $ 

(8)   

(8)  $ 

1,716 

(1,706) 

10 

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Net periodic benefit (income) cost and other changes in plan assets and benefit obligations recognized consist of the following:

(in millions)

Net Periodic Benefit (Income) Cost

2023

2022

2021

Pension 
Benefits

Other 
Postretirement 
Benefits

Pension 
Benefits

Other 
Postretirement 
Benefits

Pension 
Benefits

Other 
Postretirement 
Benefits

Expected return on plan assets

$ 

(95)  $ 

—  $ 

(82)  $ 

—  $ 

(104)  $ 

Interest cost
Amortization of prior service cost 

(credit) 

Amortization of net actuarial loss (gain)

Settlement gain

Net periodic benefit (income) cost
Other Changes in Plan Assets and 

Benefits Obligations Recognized in 
Other Comprehensive (Loss) Income

Net actuarial loss (gain)

Prior service cost
Amortization of prior service (cost) 

benefit

Amortization of net actuarial (gain) loss

Total expense (benefit) recognized in 
Other comprehensive (loss) income 
Total (benefit) expense recognized in net 
periodic benefit cost (income) and 
Other comprehensive (loss) income

63 

— 

— 

— 

(32) 

29 

— 

— 

— 

29 

— 

3 

— 

— 

3 

(1) 

— 

(3) 

— 

(4) 

38 

— 

1 

— 

(43) 

59 

— 

— 

— 

59 

— 

3 

— 

— 

3 

(3) 

— 

(3) 

— 

(6) 

37 

— 

1 

— 

(66)   

(225)   

— 

— 

(1)   

(226)   

$ 

(3)  $ 

(1)  $ 

16  $ 

(3)  $ 

(292)  $ 

— 

— 

(1) 

(1) 

(17) 

(19) 

(8) 

25 

3 

1 

21 

2 

Amounts recognized in the Consolidated Balance Sheets as of July 29, 2023 and July 30, 2022 consist of the following:

(in millions)
Other long-term assets
Pension and other postretirement benefit obligations
Accrued compensation and benefits
Total

$ 

$ 

July 29, 2023

July 30, 2022

Pension 
Benefits

Other 
Postretirement 
Benefits

Pension 
Benefits

Other 
Postretirement 
Benefits

20  $ 
(6)   
— 
14  $ 

—  $ 
(10)   
(1)   
(11)  $ 

18  $ 
(6)   
(2)   
10  $ 

— 
(12) 
— 
(12) 

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Benefit Plan Assumptions

Weighted  average  assumptions  used  to  determine  benefit  obligations  and  net  periodic  benefit  (income)  cost  consisted  of  the 
following:

Benefit obligation assumptions:

Discount rate

Net periodic benefit (income) cost assumptions:

Discount rate
Rate of compensation increase
Expected return on plan assets(1)
Interest credit 

2023

2022

2021

5.01% - 5.03%

4.20% - 4.26%

2.62% - 2.75%

4.20% - 4.26%

2.62% - 2.75%

1.17% - 2.27%

— 

— 

— 

 6.00 % 4.25% - 4.50%
 5.00 %
 5.00 %

1.00% - 5.50%
 5.00 %

(1)  Expected  return  on  plan  assets  is  estimated  by  utilizing  forward-looking,  long-term  return,  risk  and  correlation  assumptions 
developed  and  updated  annually  by  the  Company.  These  assumptions  are  weighted  by  the  actual  or  target  allocation  to  each 
underlying asset class represented in the pension plan master trust. The Company also assesses the expected long-term return on 
plan  assets  assumption  by  comparison  to  long-term  historical  performance  on  an  asset  class  basis  to  ensure  the  assumption  is 
reasonable. Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary 
policies in order to assess the capital market assumptions.

The  Company  reviews  and  selects  the  discount  rate  to  be  used  in  connection  with  measuring  its  pension  and  other 
postretirement benefit obligations annually. In determining the discount rate, the Company uses the yield on corporate bonds 
(rated AA or better) that coincides with the cash flows of the plans’ estimated benefit payouts. The model uses a yield curve 
approach  to  discount  each  cash  flow  of  the  liability  stream  at  an  interest  rate  specifically  applicable  to  the  timing  of  each 
respective  cash  flow.  The  model  totals  the  present  values  of  all  cash  flows  and  calculates  the  equivalent  weighted  average 
discount rate by imputing the singular interest rate that equates the total present value with the stream of future cash flows. This 
resulting weighted average discount rate is then used in evaluating the final discount rate to be used.

For those retirees whose health plans provide for variable employer contributions, the assumed healthcare cost trend rate used 
in  measuring  the  accumulated  postretirement  benefit  obligation  before  age  65  was  7.10%  as  of  July  29,  2023.  The  assumed 
healthcare  cost  trend  rate  for  retirees  before  age  65  will  decrease  each  year  through  fiscal  2030,  until  it  reaches  the  ultimate 
trend rate of 4.50%. For those retirees whose health plans provide for variable employer contributions, the assumed healthcare 
cost trend rate used in measuring the accumulated postretirement benefit obligation after age 65 was 6.20% as of July 29, 2023.

Pension Plan Assets

Pension plan assets are held in a master trust and invested in separately managed accounts and other commingled investment 
vehicles holding fixed income securities, domestic equity securities, private equity securities, international equity securities and 
real estate securities. The Company employs a liability hedging approach, targeting a level of risk commensurate with keeping 
pace  with  the  growth  of  plan  liabilities.  Risk  is  managed  through  diversification  across  asset  classes,  multiple  investment 
manager portfolios and both general and portfolio-specific investment guidelines. Risk tolerance is established through careful 
consideration of the plan liabilities, plan funded status and the Company’s financial condition. This asset allocation policy mix 
is reviewed annually and actual versus target allocations are monitored regularly and rebalanced on an as-needed basis. Plan 
assets are invested using a combination of active and passive investment strategies. Passive, or “indexed” strategies, attempt to 
mimic rather than exceed the investment performance of a market benchmark. The plan’s active investment strategies employ 
multiple investment management firms. Managers within each asset class cover a range of investment styles and approaches 
and are combined in a way that controls for capitalization, and style biases (equities) and interest rate exposures (fixed income) 
versus benchmark indices. Monitoring activities to evaluate performance against targets and measure investment risk take place 
on  an  ongoing  basis  through  annual  liability  measurements,  periodic  asset/liability  studies  and  quarterly  investment  portfolio 
reviews.

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The asset allocation targets and the actual allocation of pension plan assets are as follows:

Asset Category
Fixed income
Domestic equity
Private equity
International equity
Real estate
    Total

Target

2023

2022

 85.0 %
 5.5 %
 4.0 %
 3.5 %
 2.0 %
 100.0 %

 85.1 %
 5.3 %
 4.0 %
 3.5 %
 2.1 %
 100.0 %

 85.0 %
 5.4 %
 5.3 %
 2.3 %
 2.0 %
 100.0 %

The following is a description of the valuation methodologies used for investments measured at fair value:

Common stock - Valued at the closing price reported in the active market in which the individual securities are traded.

Common  collective  trusts  -  Investments  in  common/collective  trust  funds  are  stated  at  net  asset  value  (“NAV”)  as 
determined by the issuer of the common/collective trust funds and is based on the fair value of the underlying investments 
held by the fund less its liabilities. The majority of the common/collective trust funds have a readily determinable fair value 
and are classified as Level 2. Other investments in common/collective trust funds determine NAV on a less frequent basis 
and/or have redemption restrictions. For these investments, NAV is used as a practical expedient to estimate fair value.

Corporate  bonds  -  Valued  based  on  yields  currently  available  on  comparable  securities  of  issuers  with  similar  credit 
ratings.  When  quoted  prices  are  not  available  for  identical  or  similar  bonds,  the  fair  value  is  based  upon  an  industry 
valuation model, which maximizes observable inputs.

Government securities - Certain government securities are valued at the closing price reported in the active market in which 
the security is traded. Other government securities are valued based on yields currently available on comparable securities 
of issuers with similar credit ratings.

Mortgage backed securities - Valued based on yields currently available on comparable securities of issuers with similar 
credit  ratings.  When  quoted  prices  are  not  available  for  identical  or  similar  securities,  the  fair  value  is  based  upon  an 
industry valuation model, which maximizes observable inputs.

Private equity and real estate partnerships - Valued based on NAV provided by the investment manager, updated for any 
subsequent partnership interests’ cash flows or expected changes in fair value. The NAV is used as a practical expedient to 
estimate fair value.

Other - Consists primarily of options, futures, and money market investments priced at $1 per unit.

The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value 
or  reflective  of  future  fair  values.  Furthermore,  while  the  Company  believes  our  valuation  methods  are  appropriate  and 
consistent  with  other  market  participants,  the  use  of  different  methodologies  or  assumptions  to  determine  the  fair  value  of 
certain financial instruments could result in a different fair value measurement.

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 Table of Contents

The  fair  value  of  assets  held  in  the  master  trust  for  defined  benefit  pension  plans  as  of  July  29,  2023,  by  asset  category, 
consisted of the following (in millions):

Level 1

Level 2

Level 3

Common stock
Common collective trusts
Corporate bonds
Government securities
Mortgage-backed securities
Other
Private equity and real estate partnerships
Total plan assets at fair value

$ 

$ 

46  $ 
— 
— 
— 
— 
100 
— 
146  $ 

—  $ 
541 
582 
161 
30 
3 
— 
1,317  $ 

Measured at 
NAV as a 
Practical 
Expedient

Total

—  $ 
— 
— 
— 
— 
— 
— 
—  $ 

—  $ 
— 
— 
— 
— 
— 
96 
96  $ 

46 
541 
582 
161 
30 
103 
96 
1,559 

The  fair  value  of  assets  held  in  the  master  trust  for  defined  benefit  pension  plans  as  of  July  30,  2022,  by  asset  category, 
consisted of the following (in millions):

Level 1

Level 2

Level 3

Common stock
Common collective trusts
Corporate bonds
Government securities
Mortgage-backed securities
Other
Private equity and real estate partnerships
Total plan assets at fair value

$ 

$ 

42  $ 
— 
— 
— 
— 
12 
— 
54  $ 

—  $ 
949 
390 
175 
28 
2 
— 
1,544  $ 

Contributions

Measured at 
NAV as a 
Practical 
Expedient

Total

—  $ 
— 
— 
— 
— 
— 
— 
—  $ 

—  $ 
3 
— 
— 
— 
— 
115 
118  $ 

42 
952 
390 
175 
28 
14 
115 
1,716 

No  minimum  pension  contributions  were  required  to  be  made  under  the  SUPERVALU  INC.  Retirement  Plan  under  the 
Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2023. The Company expects to contribute 
approximately $1 million to its other defined benefit pension plans and $1 million to its postretirement benefit plans in fiscal 
2024.

The Company funds its defined benefit pension plans based on the minimum contribution required under the Internal Revenue 
Code, ERISA, the Pension Protection Act of 2006 and other applicable laws, as determined by our external actuarial consultant, 
and  additional  contributions  made  at  its  discretion.  The  Company  may  accelerate  contributions  or  undertake  contributions  in 
excess of the minimum requirements from time to time subject to the availability of cash in excess of operating and financing 
needs or other factors as may be applicable. The Company assesses the relative attractiveness of the use of cash including such 
factors  as  expected  return  on  assets,  discount  rates,  cost  of  debt,  reducing  or  eliminating  required  Pension  Benefit  Guaranty 
Corporation variable rate premiums or the ability to achieve exemption from participant notices of underfunding.

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Estimated Future Benefit Payments

The  estimated  future  benefit  payments  to  be  made  from  our  defined  benefit  pension  and  other  postretirement  benefit  plans, 
which reflect expected future service, are as follows (in millions):

Fiscal Year
2024
2025
2026
2027
2028
Years 2029-2033

Defined Contribution Plan

Other 
Postretirement 
Benefits

Pension Benefits
$ 

124  $ 
117 
117 
116 
114 
565 

1 
1 
1 
1 
1 
4 

The Company sponsors a defined contribution and profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code. 
Employees  may  contribute  a  portion  of  their  eligible  compensation  to  the  plan  on  a  pre-tax  or  after-tax  Roth  basis.  The 
Company matches a portion of certain employee contributions by contributing cash into the investment options selected by the 
employees. The total amount contributed by the Company to the plan is determined by plan provisions or at the Company’s 
discretion. Total employer contribution expenses for this plan were $30 million, $29 million and $27 million for fiscal 2023, 
2022 and 2021, respectively.

Post-Employment Benefits

The Company recognizes an obligation for benefits provided to former or inactive employees. The Company is self-insured for 
certain disability plan programs, which comprise the primary benefits paid to inactive employees prior to retirement.

As of July 29, 2023 there was $4 million of Accrued compensation and benefits and $4 million of Other long-term liabilities 
recognized in the Consolidated Balance Sheets. As of July 30, 2022 there was $4 million of Accrued compensation and benefits 
and $5 million of Other long-term liabilities.

Multiemployer Pension Plans

The  Company  contributes  to  various  multiemployer  pension  plans  under  collective  bargaining  agreements,  primarily  defined 
benefit pension plans. These multiemployer plans generally provide retirement benefits to participants based on their service to 
contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible 
for  determining  the  level  of  benefits  to  be  provided  to  participants  as  well  as  the  investment  of  the  assets  and  plan 
administration. Trustees are appointed in equal number by employers and the unions that are parties to the relevant collective 
bargaining agreements.

Expense  is  recognized  in  connection  with  these  plans  as  contributions  are  funded,  in  accordance  with  GAAP.  The  risks  of 
participating in these multiemployer plans are different from the risks associated with single-employer plans in the following 
respects:

•

•

•

Assets contributed to the multiemployer plan by one employer are held in trust and may be used to provide benefits to 
employees of other participating employers.
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the 
remaining participating employers.
If the Company chose to stop participating in some multiemployer plans, or make market exits or closures or otherwise 
have participation in the plan drop below certain levels, it may be required to pay those plans an amount based on the 
underfunded status of the plan, referred to as a withdrawal liability.

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The Company’s participation in these plans is outlined in the table below. The EIN-Pension Plan Number column provides the 
Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent 
Pension Protection Act (“PPA”) zone status available in 2022 relates to the plans’ most recent fiscal year-end. The zone status 
is based on information that we received from the plan and is annually certified by each plan’s actuary. Among other factors, 
deep red zone status or critical and declining plans are generally less than 65% funded and are projected to become insolvent 
within 15 to 20 years, red zone status plans are generally less than 65% funded and are considered in critical status, yellow zone 
status plans are less than 80% funded and are considered in endangered or seriously endangered status, and green zone plans are 
at least 80% funded. The FIP/RP Status Pending/Implemented column indicates plans for which a funding improvement plan 
(“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented by the trustees of each plan. The American 
Rescue Plan Act of 2021 (“ARPA”) created the Special Financial Assistance (“SFA”) Program to permit financially troubled 
multiemployer  plans  to  apply  for  a  cash  payment  intended  to  keep  plans  solvent  and  able  to  pay  benefits  through  2051.  As 
July 29, 2023, certain plans in which the Company participates have applied for or received SFA, and other plans in which the 
Company participates are expected to apply.

Certain  plans  have  been  aggregated  in  the  All  Other  Multiemployer  Pension  Plans  line  in  the  following  table,  as  the 
contributions to each of these plans are not individually material. None of our collective bargaining agreements require that a 
minimum contribution be made to these plans.

At  the  date  the  financial  statements  were  issued,  Form  5500  for  these  plans  were  generally  not  available  for  the  plan  years 
ending in 2022.

The following table contains information about the Company’s significant multiemployer plans from which the Company has 
not withdrawn (in millions):

EIN-Pension
Plan 
Number
416047047-
001
410905139-
001

832598425-
001
366044243-
001
526117495-
002
916145047-
001
396069053-
001

Pension Fund
Minneapolis Food Distributing 
Industry Pension Plan
Minneapolis Retail Meat Cutters 
and Food Handlers Pension Fund
Minneapolis Retail Meat Cutters 
and Food Handlers Variable 
Annuity Pension Plan
Central States, Southeast & 
Southwest Areas Pension Plan
UFCW Unions and Participating 
Employers Pension Plan
Western Conference of Teamsters 
Pension Plan 
UFCW Unions and Employers 
Pension Plan(2)
All Other Multiemployer Pension 
Plans(3)
Total

Pension 
Protection 
Act Zone 
Status

Contributions

Plan
Month/Day
End Date

FIP/RP Status 
Pending/
Implemented

2022

2023

2022

2021

Surcharges 
Imposed(1)

12/31

Green

No

$  12  $  11  $  12 

2/28

Red

Implemented

13 

10 

10 

No

No

NA

No

No

No

NA

4 

6 

3 

10 

1 

12/31

NA

NA

12/31

Deep Red

Implemented

 Red

Implemented

3 

5 

3 

4 

5 

3 

Green

NA

No

NA

10 

10 

  — 

  — 

12/31

12/31

NA

2 

2 
$  48  $  45  $  48 

2 

(1) PPA  surcharges  are  5%  or  10%  of  eligible  contributions  and  may  not  apply  to  all  collective  bargaining  agreements  or  total 

contributions to each plan.

(2)  The Company withdrew from this plan in fiscal 2021 and made no contributions in fiscal 2022 or fiscal 2023. The plan was 

included in the table above for contributions made in fiscal 2021.

(3) All Other Multiemployer Pension Plans includes 3 plans, none of which are individually significant when considering contributions 

to the plan, severity of the underfunded status or other factors. 

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The following table describes the expiration of the Company’s collective bargaining agreements associated with the significant 
multiemployer plans in which we participate:

Pension Fund

Minneapolis Food Distributing Industry 
Pension Plan

Minneapolis Retail Meat Cutters and Food 
Handlers Pension Fund

Minneapolis Retail Meat Cutters and Food 
Handlers Variable Annuity Pension Fund

Central States, Southeast and Southwest 
Areas Pension Fund

UFCW Unions and Participating 
Employers Pension Fund

Western Conference of Teamsters Pension 
Plan Trust

Most Significant Collective 
Bargaining Agreement

Range of Collective 
Bargaining Agreement 
Expiration Dates

Total Collective 
Bargaining 
Agreements

Expiration 
Date

% of Associates 
under Collective 
Bargaining 
Agreement (1)

Over 5% 
Contributions 2022

5/31/2026

3/4/2025

3/4/2025

6/03/2024 - 
5/31/2025

07/12/2024

4/30/2024 - 
9/20/2026

1 

1 

1 

4 

2 

5/31/2026

 100.0 %

3/4/2025

 100.0 %

3/4/2025

 100.0 %

8/3/2024

7/12/2024

13 

9/20/2026

 37.9 %

 75.0 %

 24.9 %

☒

☒

☒

☐

☒

☐

(1) Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees 

represented under the applicable collective bargaining agreements.

In fiscal 2021, the Company withdrew from participating in three Retail multiemployer pension plans, resulting in a $63 million 
withdrawal  charge,  which  is  recorded  within  Operating  expenses  within  our  Consolidated  Statements  of  Operations,  Other 
long-term liabilities on the Consolidated Balance Sheets and within changes in operating assets and liabilities within Accrued 
expenses and other liabilities in the Consolidated Statements of Cash Flows. In fiscal 2022, the Company updated its estimated 
withdrawal liability, which resulted in an $8 million benefit recorded within Operating expenses.

As  of  July  29,  2023,  accrued  multiemployer  pension  plan  withdrawal  liabilities  included  in  Other  long-term  liabilities  and 
Accrued compensation and benefits were $73 million and $7 million, respectively, for 13 multiemployer plans. As of July 30, 
2022 amounts included in Other long-term liabilities and Accrued compensation and benefits were $94 million and $7 million, 
respectively. Payments associated with these liabilities are required to be made over varying time periods, but principally over 
the next 20 years.

Multiemployer Benefit Plans Other than Pensions

The Company also makes contributions to multiemployer health and welfare plans in amounts set forth in the related collective 
bargaining agreements. These plans provide medical, dental, pharmacy, vision and other ancillary benefits to active employees 
and  retirees  as  determined  by  the  trustees  of  each  plan.  The  vast  majority  of  the  Company’s  contributions  benefit  active 
employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to 
separate contribution amounts to postretirement benefit plans from contribution amounts paid to benefit active employees.

The Company contributed $85 million, $81 million and $78 million in fiscal 2023, fiscal 2022 and fiscal 2021, respectively, to 
multiemployer  health  and  welfare  plans.  If  healthcare  provisions  within  these  plans  cannot  be  renegotiated  in  a  manner  that 
reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future.

Collective Bargaining Agreements

As of July 29, 2023, we had approximately 29,455 employees. Approximately 10,667 employees are covered by 49 collective 
bargaining agreements. During fiscal 2023, 9 collective bargaining agreements covering approximately 4,730 employees were 
renegotiated and 2 collective bargaining agreements covering approximately 90 employees expired without their terms being 
renegotiated.  Negotiations  are  expected  to  continue  with  the  bargaining  units  representing  the  employees  subject  to  those 
agreements. During fiscal 2024, 14 collective bargaining agreements covering approximately 4,210 employees are scheduled to 
expire.

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NOTE 14—INCOME TAXES

Income Tax (Benefit) Expense 

For fiscal 2023, (loss) income before income taxes consists of $(1) million from U.S. continuing operations and $8 million from 
foreign  continuing  operations.  Income  before  income  taxes  for  fiscal  2022  consists  of  $302  million  from  U.S.  continuing 
operations  and  $8  million  from  foreign  continuing  operations.  Income  before  income  taxes  for  fiscal  2021  consists  of  $175 
million from U.S. continuing operations and $8 million from foreign continuing operations.

The total (benefit) provision for income taxes included in the Consolidated Statements of Operations consisted of the following:

(in millions)
Continuing operations
Discontinued operations
Total

2023

2022

2021

$ 

$ 

(23)  $ 
— 
(23)  $ 

56  $ 
— 
56  $ 

The income tax (benefit) expense in continuing operations was allocated as follows:

(in millions)
Income tax (benefit) expense
Other comprehensive (loss) income
Total

2023

2022

2021

$ 

$ 

(23)  $ 
(2)   
(25)  $ 

56  $ 
11 
67  $ 

Total federal, state and foreign income tax (benefit) expense in continuing operations consists of the following:

(in millions)
Fiscal 2023
U.S. Federal
State and Local
Foreign

Fiscal 2022
U.S. Federal
State and Local
Foreign

Fiscal 2021
U.S. Federal
State and Local
Foreign

Current

Deferred

Total

$ 

$ 

$ 

$ 

$ 

$ 

23  $ 
(11)   
1 
13  $ 

(7)  $ 
6 
2 
1  $ 

30  $ 
7 
2 
39  $ 

(36)  $ 
(1)   
1 
(36)  $ 

45  $ 
9 
1 
55  $ 

(8)  $ 
2 
1 
(5)  $ 

34 
(1) 
33 

34 
65 
99 

(13) 
(12) 
2 
(23) 

38 
15 
3 
56 

22 
9 
3 
34 

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Total income tax (benefit) expense in continuing operations was different than the amounts computed by applying the statutory 
federal income tax rate to income before income taxes because of the following:

(in millions)
Computed “expected” tax expense
State and local income tax, net of Federal income tax benefit
Non-deductible expenses
Tax effect of share-based compensation
General business credits
Unrecognized tax benefits
Enhanced inventory donations
Changes in valuation allowance(1)
Other, net(1)
Total income tax (benefit) expense

2023

2022

2021

$ 

$ 

1  $ 
(1)   
3 
(9)   
(8)   
(16)   
(1)   
4 
4 
(23)  $ 

66  $ 
18 
13 
(31)   
(3)   
(6)   
(2)   
1 
— 
56  $ 

39 
10 
7 
(3) 
(6) 
(4) 
(3) 
1 
(7) 
34 

(1)

Immaterial prior period amounts that were included in the other, net category have been reclassified to conform with current period 
presentation.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

(in millions)
Unrecognized tax benefits at beginning of period

Unrecognized tax benefits added during the period
Decreases in unrecognized tax benefits due to statute expiration
Decreases in unrecognized tax benefits due to settlements 

Unrecognized tax benefits at end of period

2023

2022

2021

$ 

$ 

19  $ 
5 
(5)   
(8)   
11  $ 

27  $ 
— 
(7)   
(1)   
19  $ 

32 
6 
(8) 
(3) 
27 

In  addition,  the  Company  has  $1  million  paid  on  deposit  to  various  governmental  agencies  to  cover  the  above  liability.  The 
Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. For fiscal 2023, 2022 
and 2021, total accrued interest and penalties was $1 million, $6 million and $6 million, respectively.

The Company is currently under examination in several taxing jurisdictions and remains subject to examination until the statute 
of limitations expires for the respective taxing jurisdiction or an agreement is reached between the taxing jurisdiction and the 
Company. As of July 29, 2023, the Company is no longer subject to federal income tax examinations for fiscal years before 
2016  and  in  most  states  is  no  longer  subject  to  state  income  tax  examinations  for  fiscal  years  before  2011  and  2016  for 
Supervalu and the Company, respectively. Due to the implementation of the CARES Act, NOLs were carried back into fiscal 
years 2014 and 2015, which extends the federal statute of limitations on those years up to the amount of the carryback claim. 

Based on the possibility of the closing of pending audits and appeals, or expiration of the statute of limitations, the Company 
does not anticipate that the amount of unrecognized tax benefits will change significantly during the next 12 months.

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Deferred Tax Assets and Liabilities

The  tax  effects  of  temporary  differences  that  give  rise  to  significant  portions  of  the  net  deferred  tax  assets  and  deferred  tax 
liabilities at July 29, 2023 and July 30, 2022 are presented below:

(in millions)
Deferred tax assets:
Compensation and benefits related
Accounts receivable, principally due to allowances for uncollectible accounts
Accrued expenses
Net operating loss carryforwards
Other tax carryforwards (interest, charitable contributions)
Foreign tax credits

Intangible assets

Lease liabilities
Other deferred tax assets
Total gross deferred tax assets
Less valuation allowance

Net deferred tax assets
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation
Inventories
Lease right of use assets
Interest rate swap agreements
Total deferred tax liabilities
Net deferred tax assets (liabilities)

Tax Credits and Valuation Allowances

July 29,
2023

July 30,
2022

$ 

$ 

$ 

$ 

29  $ 
4 
52 
10 
32 
1 

50 

333 
6 
517 

(7)   
510  $ 

141  $ 
15 
317 
5 
478 
32  $ 

50 
4 
37 
14 
15 
1 

50 

319 
— 
490 
(5) 
485 

159 
29 
304 
1 
493 
(8) 

At July 29, 2023, the Company had gross deferred tax assets of approximately $517 million. The Company regularly reviews its 
deferred  tax  assets  for  recoverability  to  evaluate  whether  it  is  more  likely  than  not  that  they  will  be  realized.  In  making  this 
evaluation, the Company considers the statutory recovery periods for the assets, along with available sources of future taxable 
income, including reversals of existing taxable temporary differences, tax planning strategies, history of taxable income, and 
projections of future income. The Company gives more significance to objectively verifiable evidence, such as the existence of 
deferred  tax  liabilities  that  are  forecast  to  generate  taxable  income  within  the  relevant  carryover  periods,  and  a  history  of 
earnings.  A  valuation  allowance  is  provided  when  the  Company  concludes,  based  on  all  available  evidence,  that  it  is  more 
likely  than  not  that  the  deferred  tax  assets  will  not  be  realized  during  the  applicable  recovery  period.  The  Company  has 
reviewed these factors in evaluating the recoverability of its deferred tax assets. As of July 29, 2023, the Company anticipates 
sufficient future taxable income to realize all of its deferred tax assets within the applicable recovery periods with the exception 
of certain foreign tax credits, charitable contribution carryovers and state net operating losses. Accordingly, the Company has 
established  valuation  allowances  against  that  portion  of  its  charitable  contribution  carryovers,  state  net  operating  losses  and 
foreign tax credits that, in the Company’s judgment, are not likely to be realized within the applicable recovery periods.

At  July  29,  2023,  the  Company  had  net  operating  loss  carryforwards  of  approximately  $1  million  for  federal  income  tax 
purposes that are subject to an annual limitation of approximately $0.3 million under Internal Revenue Code Section 382. These 
Section  382-limited  carryforwards  expire  at  various  times  through  fiscal  year  2027.  As  of  July  29,  2023,  the  Company 
anticipates sufficient future taxable income over the periods in which the net operating losses can be utilized. The Company 
also has the availability of future reversals of taxable temporary differences that are expected to generate taxable income in the 
future. Therefore, the ultimate realization of net operating losses for federal purposes appears more likely than not at July 29, 
2023 and correspondingly no valuation allowance has been established.

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At  July  29,  2023,  the  Company  had  disallowed  charitable  contribution  carryforwards  of  approximately  $45  million  that  are 
available  for  carryforward  over  five  years.  As  of  July  29,  2023,  the  Company  anticipates  sufficient  future  taxable  income  to 
utilize  $30  million  of  these  charitable  contribution  carryovers  within  the  applicable  five-year  carryforward  periods.  The 
Company  has  established  a  valuation  allowance  against  the  $15  million  of  charitable  contribution  carryovers  that,  in  the 
Company’s judgement, are not likely to be realized within the applicable recovery period.

The retained earnings of the Company’s non-U.S. subsidiary were subject to deemed U.S. repatriation and taxation during fiscal 
2017 pursuant to the Tax Cuts and Jobs Act, and existing foreign tax credits were utilized to offset the resulting liability. We 
have  established  a  deferred  tax  asset  for  the  remaining  U.S.  foreign  tax  credits  of  $1  million.  Such  credits  are  offset  by  a 
valuation allowance. 

Effective Tax Rate

The Company’s effective income tax rate for continuing operations was a benefit rate of 328.6% on pre-tax income for fiscal 
2023 as compared to an expense rate of 18.1% and 18.6% on pre-tax income for fiscal 2022 and 2021, respectively. For fiscal 
2021, the effective tax rate was reduced by solar and employment tax credits, including the tax credit impact of a fiscal 2021 
investment  in  an  equity  method  partnership,  the  recognition  of  previously  unrecognized  tax  benefits,  excess  tax  deductions 
attributable  to  share-based  compensation  and  inventory  deductions,  as  well  as  the  impact  of  favorable  return-to-provision 
adjustments. For fiscal 2022, the effective tax rate was reduced by the impact of discrete tax benefits related to employee stock 
awards  and  the  release  of  unrecognized  tax  positions,  partially  offset  by  non-deductible  executive  compensation.  For  fiscal 
2023,  the  effective  tax  rate  was  impacted  by  solar  credits,  including  the  tax  credit  impact  of  a  fiscal  2023  investment  in  an 
equity method partnership and solar credits associated with a solar array installation at the Company’s Howell Township, New 
Jersey facility. The effective tax rate was also impacted by the recognition of previously unrecognized tax benefits and excess 
tax deductions attributable to share-based compensation. The combined impact of these fiscal 2023 tax benefits exceeded pre-
tax income, generating an overall tax benefit rate for fiscal 2023.

NOTE 15—EARNINGS PER SHARE 

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

(in millions, except per share data)
Basic weighted average shares outstanding

Net effect of dilutive stock awards based upon the treasury stock method

Diluted weighted average shares outstanding

Basic earnings per share(1):
Continuing operations
Discontinued operations
Basic earnings per share
Diluted earnings per share(1):
Continuing operations
Discontinued operations
Diluted earnings per share

2023

2022

2021

59.2 
1.5 
60.7 

58.0 
3.0 
61.0 

$ 
$ 
$ 

$ 
$ 
$ 

0.41  $ 
—  $ 
0.41  $ 

0.40  $ 
—  $ 
0.40  $ 

4.28  $ 
—  $ 
4.28  $ 

4.07  $ 
—  $ 
4.07  $ 

56.1 
3.9 
60.0 

2.55 
0.10 
2.65 

2.38 
0.09 
2.48 

Anti-dilutive share-based awards excluded from the calculation of diluted 
earnings per share

0.8 

0.5 

0.9 

(1)   Earnings per share amounts are calculated using actual unrounded figures.

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NOTE 16—BUSINESS SEGMENTS 

The Company has two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each 
with  a  different  customer  base,  marketing  strategy  and  management  structure.  The  Company  organizes  and  operates  the 
Wholesale reportable segment through three U.S geographic regions: East, Central and West, and Canada Wholesale, which is 
operated  separately  from  the  U.S.  Wholesale  business.  The  U.S.  Wholesale  and  Canada  Wholesale  operating  segments  have 
similar products and services, customer channels, distribution methods and economic characteristics, and therefore have been 
aggregated into a single reportable segment. Reportable segments are reviewed on an annual basis, or more frequently if events 
or circumstances indicate a change in reportable segments has occurred.

The  Wholesale  reportable  segment  is  engaged  in  the  distribution  of  grocery  and  non-food  products,  and  provides  support 
services to retailers in the United States and Canada. The Retail reportable segment derives revenues from the sale of groceries 
and other products at retail locations operated by the Company. The Company has additional operating segments that do not 
meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of Other. Other includes 
a  single  location  food  manufacturing  business,  which  engages  in  the  importing,  roasting,  packaging  and  distributing  of  nuts, 
dried  fruit,  seeds,  trail  mixes,  granola,  natural  and  organic  snack  items  and  confections,  and  the  Company’s  natural  branded 
product lines, primarily Blue Marble Brands. Other also includes certain corporate operating expenses that are not allocated to 
operating  segments,  which  include,  among  other  expenses,  restructuring,  acquisition  and  integration  related  expenses,  share-
based compensation, and salaries, retainers, and other related expenses of certain officers and all directors. Wholesale records 
revenues related to sales to Retail at gross margin rates consistent with sales to other similar wholesale customers.

Segment  earnings  include  revenues  and  costs  attributable  to  each  of  the  respective  business  segments  and  certain  allocated 
corporate overhead, based on the segment’s estimated consumption of corporately managed resources. The Company’s measure 
of segment profit is Adjusted EBITDA, as disclosed below. The Company allocates certain corporate capital expenditures and 
identifiable assets to its business segments and retains certain depreciation expense related to those assets within Other. Non-
operating expenses that are not allocated to the operating segments are included in the Other segment.

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The following table provides information by reportable segment, including continuing operations Net sales, Adjusted EBITDA, 
with a reconciliation to Income from continuing operations before income taxes, depreciation and amortization, and payments 
for capital expenditures:

(in millions)

Net sales:

Wholesale(1)
Retail

Other

Eliminations

Total Net sales

Continuing operations Adjusted EBITDA:

Wholesale

Retail

Other

Eliminations

Adjustments:

Net income attributable to noncontrolling interests

Net periodic benefit income, excluding service cost

Interest expense, net

Other income, net

Depreciation and amortization
Share-based compensation(2)
LIFO charge

Restructuring, acquisition, and integration related expenses

(Loss) gain on sale of assets and other asset charges

Multi-employer pension plan withdrawal (charges) benefit

Other retail expense

Business transformation costs

Income from continuing operations before income taxes

Depreciation and amortization:

Wholesale

Retail

Other

Total depreciation and amortization

Payments for capital expenditures:

Wholesale

Retail

Total capital expenditures

2023

2022

2021

$ 

29,142 

$ 

27,824  $ 

2,480 

224 

(1,574) 

2,468 

219 

(1,583) 

30,272 

$ 

28,928  $ 

540 

$ 

696  $ 

70 

31 

(1) 

6 

29 

(144) 

2 

(304) 

(38) 

(119) 

(8) 

(30) 

(1) 

(1) 

(25) 

98 

44 

(9) 

6 

40 

(155) 

2 

(285) 

(43) 

(158) 

(21) 

87 

8 

— 

— 

7 

$ 

310  $ 

263 

$ 

254  $ 

36 

5 

29 

2 

304 

$ 

285  $ 

290 

$ 

33 

323 

$ 

224  $ 

27 

251  $ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

25,873 

2,442 

219 

(1,584) 

26,950 

677 

98 

(10) 

1 

6 

85 

(204) 

8 

(285) 

(49) 

(24) 

(56) 

4 

(63) 

(5) 

— 

183 

252 

29 

4 

285 

285 

25 

310 

(1) For  fiscal  2023,  2022  and  2021,  as  presented  in  Note  3—Revenue  Recognition,  the  Company  recorded  $1,331  million,  $1,358 
million and $1,381 million, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail 
sales that have been eliminated upon consolidation.

(2) Fiscal 2022 and 2021 include an immaterial amount of liability-settled share compensation expense.

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Total assets by reportable segment were as follows:

(in millions)
Assets: 

Wholesale
Retail
Other
Eliminations

Total assets

July 29,
2023

July 30,
2022

$ 

$ 

6,405  $ 
648 
377 
(36)   
7,394  $ 

6,733 
599 
335 
(39) 
7,628 

NOTE 17—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS 

Guarantees and Contingent Liabilities

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various 
retailers as of July 29, 2023. These guarantees were generally made to support the business growth of wholesale customers. The 
guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms 
that range from less than one year to seven years, with a weighted average remaining term of approximately four years. For 
each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to 
make  payments  under  its  guarantee.  Generally,  the  guarantees  are  secured  by  indemnification  agreements  or  personal 
guarantees.  The  Company  reviews  performance  risk  related  to  its  guarantee  obligations  based  on  internal  measures  of  credit 
performance. As of July 29, 2023, the maximum amount of undiscounted payments the Company would be required to make in 
the  event  of  default  of  all  guarantees  was  $15  million  ($12  million  on  a  discounted  basis).  Based  on  the  indemnification 
agreements, personal guarantees and results of the reviews of performance risk, as of July 29, 2023, a total estimated loss of 
$1 million is recorded in the Consolidated Balance Sheets.

The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for 
certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise. These 
agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into for the purchase 
and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services 
to  the  Company  and  agreements  to  indemnify  officers,  directors  and  employees  in  the  performance  of  their  work.  While  the 
Company’s aggregate indemnification obligations could result in a material liability, the Company is not aware of any matters 
that are expected to result in a material liability. No amount has been recorded in the Consolidated Balance Sheets for these 
contingent obligations as the fair value has been determined to be de minimis.

In connection with Supervalu’s sale of New Albertson’s, Inc. (“NAI”) on March 21, 2013, the Company remains contingently 
liable  with  respect  to  certain  self-insurance  commitments  and  other  guarantees  as  a  result  of  parental  guarantees  issued  by 
Supervalu  with  respect  to  the  obligations  of  NAI  that  were  incurred  while  NAI  was  Supervalu’s  subsidiary.  Based  on  the 
expected  settlement  of  the  self-insurance  claims  that  underlie  the  Company’s  commitments,  the  Company  believes  that  such 
contingent liabilities will continue to decline. Subsequent to the sale of NAI, NAI collateralized most of these obligations with 
letters of credit and surety bonds to numerous state governmental authorities. Because NAI remains a primary obligor on these 
self-insurance  and  other  obligations  and  has  collateralized  most  of  the  self-insurance  obligations  for  which  the  Company 
remains contingently liable, the Company believes that the likelihood that it will be required to assume a material amount of 
these obligations is remote. Accordingly, no amount has been recorded in the Consolidated Balance Sheets for these guarantees, 
as the fair value has been determined to be de minimis.

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Agreements with Save-A-Lot and Onex

The  Agreement  and  Plan  of  Merger  pursuant  to  which  Supervalu  sold  the  Save-A-Lot  business  in  2016  (the  “SAL  Merger 
Agreement”)  contains  customary  indemnification  obligations  of  each  party  with  respect  to  breaches  of  their  respective 
representations,  warranties  and  covenants,  and  certain  other  specified  matters,  on  the  terms  and  subject  to  the  limitations  set 
forth in the SAL Merger Agreement. Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) 
with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related 
to the separation of the assets and liabilities of the Save-A-Lot business from the Company. The Company also entered into a 
Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company provided Save-A-Lot with 
various technical, human resources, finance and other operational services. The Company primarily ceased providing services 
under  the  Services  Agreement  in  fiscal  2022.  The  Services  Agreement  generally  requires  each  party  to  indemnify  the  other 
party  against  third-party  claims  arising  out  of  the  performance  of  or  the  provision  or  receipt  of  services  under  the  Services 
Agreement.  While  the  Company’s  aggregate  indemnification  obligations  to  Save-A-Lot  and  Onex,  the  purchaser  of  Save-A-
Lot,  could  result  in  a  material  liability,  the  Company  is  not  aware  of  any  matters  that  are  expected  to  result  in  a  material 
liability. The Company has recorded the de minimis fair value of the guarantee in the Consolidated Balance Sheets within Other 
long-term liabilities.

Other Contractual Commitments

In  the  ordinary  course  of  business,  the  Company  enters  into  supply  contracts  to  purchase  products  for  resale,  and  service 
contracts for fixed asset and information technology systems. These contracts typically include either volume commitments or 
fixed expiration dates, termination provisions and other standard contractual considerations. As of July 29, 2023, the Company 
had approximately $685 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the 
ordinary course within one year.

Legal Proceedings

The  Company  is  one  of  dozens  of  companies  that  have  been  named  in  various  lawsuits  alleging  that  drug  manufacturers, 
retailers  and  distributors  contributed  to  the  national  opioid  epidemic.  Currently,  UNFI,  primarily  through  its  subsidiary, 
Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of 
Ohio  where  thousands  of  cases  have  been  consolidated  as  Multi-District  Litigation  (“MDL”).  In  accordance  with  the  Stock 
Purchase Agreement dated January 10, 2013, between New Albertson’s Inc. (“New Albertson’s”) and the Company (the “Stock 
Purchase Agreement”), New Albertson’s is defending and indemnifying UNFI in a majority of the cases under a reservation of 
rights as those cases relate to New Albertson’s pharmacies. In one of the MDL cases, MDL No. 2804 filed by The Blackfeet 
Tribe of the Blackfeet Indian Reservation, all defendants were ordered to Answer the Complaint, which UNFI did on July 26, 
2019. To date, no discovery has been conducted against UNFI in any of the actions. On October 7, 2022, the MDL Court issued 
an  order  directing  the  Company  and  numerous  other  “non-litigating”  defendants  to  submit  by  November  1,  2022,  a  list  of 
opioid  cases  where  the  Company  is  named  and  opioid  dispensing  and  distribution  data.  The  Company  produced  the  data  in 
compliance with the order. On March 8, 2023, the Company received a subpoena from the Consumer Protection Division of the 
Maryland Attorney General’s Office seeking records related to the distribution and dispensing of opioids. The Company is in 
the process of gathering responsive documents and responding to the subpoena. The Company believes these claims are without 
merit and is vigorously defending this matter.

On  January  21,  2021,  various  health  plans  filed  a  complaint  in  Minnesota  state  court  against  the  Company,  Albertson’s 
Companies, LLC (“Albertson’s”) and Safeway, Inc. alleging the defendants committed fraud by improperly reporting inflated 
prices  for  prescription  drugs  for  members  of  health  plans.  The  Plaintiffs  assert  six  causes  of  action  against  the  defendants: 
common  law  fraud,  fraudulent  nondisclosure,  negligent  misrepresentation,  unjust  enrichment,  violation  of  the  Minnesota 
Uniform Deceptive Trade Practices Act and violation of the Minnesota Prevention of Consumer Fraud Act. The plaintiffs allege 
that  between  2006  and  2016,  Supervalu  overcharged  the  health  plans  by  not  providing  the  health  plans,  as  part  of  usual  and 
customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that Supervalu 
match competitor prices. Plaintiffs seek an unspecified amount of damages. Similar to the above case, for the majority of the 
relevant period Supervalu and Albertson’s operated as a combined company. In March 2013, Supervalu divested Albertson’s 
and pursuant to the Stock Purchase Agreement, Albertson’s is responsible for any claims regarding its pharmacies. On February 
19,  2021,  Albertson’s  and  Safeway  removed  the  case  to  Minnesota  Federal  District  Court  and  on  March  22,  2021,  plaintiffs 
filed a motion to remand to state court. On February 26, 2021, defendants filed a motion to dismiss. The hearing on the remand 
motion and motions to dismiss occurred on May 20, 2021. On September 21, 2021, the Federal District Court remanded the 
case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court. On February 1, 2022, 
the state court denied the motion to dismiss. The Company believes these claims are without merit and intends to vigorously 
defend this matter.

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UNFI  is  currently  subject  to  a  qui  tam  action  alleging  violations  of  the  False  Claims  Act  ("FCA").  In  United  States  ex  rel. 
Schutte  and  Yarberry  v.  Supervalu,  New  Albertson's,  Inc.,  et  al,  which  is  pending  in  the  U.S.  District  Court  for  the  Central 
District  of  Illinois,  the  relators  allege  that  defendants  overcharged  government  healthcare  programs  by  not  providing  the 
government,  as  a  part  of  usual  and  customary  prices,  the  benefit  of  discounts  given  to  customers  purchasing  prescription 
medication who requested that defendants match competitor prices. The complaint was originally filed under seal and amended 
on November 30, 2015. The government previously investigated the relators' allegations and declined to intervene. Violations 
of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. Relators elected to 
pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $100 million, 
not including trebling and statutory penalties. For the majority of the relevant period Supervalu and New Albertson’s operated 
as  a  combined  company.  In  March  2013,  Supervalu  divested  New  Albertson’s  (and  related  assets)  pursuant  to  the  Stock 
Purchase Agreement. Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a 
potential  award  (at  the  currently  claimed  value  by  relators)  would  be  approximately  $24  million,  not  including  trebling  and 
statutory  penalties.  Both  sides  moved  for  summary  judgment.  On  August  5,  2019,  the  Court  granted  one  of  the  relators’ 
summary  judgment  motions  finding  that  the  defendants’  lower  matched  prices  are  the  usual  and  customary  prices  and  that 
Medicare  Part  D  and  Medicaid  were  entitled  to  those  prices.  On  July  2,  2020,  the  Court  granted  the  defendants’  summary 
judgment motion and denied the relators’ motion, dismissing the case. On July 9, 2020, the relators filed a notice of appeal with 
the Seventh Circuit Court of Appeal. On August 12, 2021, the Seventh Circuit affirmed the District Court’s decision granting 
summary judgment in defendants’ favor. On September 23, 2021, the relators filed a petition for rehearing. On December 3, 
2021, the Seventh Circuit denied the petition for rehearing. On April 1, 2022, the relators filed a petition for a writ of certiorari 
with the United States Supreme Court which was granted on January 13, 2023. Oral argument took place in the Supreme Court 
on April 18, 2023. On June 1, 2023, the Supreme Court reversed and vacated the lower court’s judgement and remanded the 
case  to  the  Seventh  Circuit  for  further  proceedings.  On  July  27,  2023,  the  Seventh  Circuit  vacated  the  summary  judgement 
order  and  remanded  to  the  District  Court.  On  August  22,  2023,  the  District  Court  set  the  trial  date  for  April  29,  2024,  and 
indicated it would allow further summary judgement motions, which the Company anticipates filing.

From  time  to  time,  the  Company  receives  notice  of  claims  or  potential  claims  or  becomes  involved  in  litigation,  alternative 
dispute resolution, such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, 
including  investigations  and  claims  regarding  employment  law,  including  wage  and  hour  (including  class  actions);  pension 
plans;  labor  union  disputes,  including  unfair  labor  practices,  such  as  claims  for  back-pay  in  the  context  of  labor  contract 
negotiations and other matters; supplier, customer and service provider contract terms and claims, including matters related to 
supplier or customer insolvency or general inability to pay obligations as they become due; product liability claims, including 
those where the supplier may be insolvent and customers or consumers are seeking recovery against the Company; real estate 
and environmental matters, including claims in connection with its ownership and lease of a substantial amount of real property, 
both  retail  and  warehouse  properties;  and  antitrust.  Other  than  as  described  above,  there  are  no  pending  material  legal 
proceedings to which the Company is a party or to which its property is subject.

Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties 
that  could  cause  actual  outcomes,  costs  and  exposures  to  vary  materially  from  current  expectations.  Management  regularly 
monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its 
predictions with respect to outcomes and estimates with respect to related costs and exposures. As of July 29, 2023, no material 
accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

Although  management  believes  it  has  made  appropriate  assessments  of  potential  and  contingent  loss  in  each  of  these  cases 
based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material 
differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and 
estimates, or material changes in such predictions or estimates will not occur. The occurrence of any of the foregoing, could 
have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

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NOTE 18—DISCONTINUED OPERATIONS 

The  following  table  summarizes  the  operating  results  of  discontinued  operations  included  in  the  Consolidated  Statements  of 
Operations:

(in millions)
Net sales
Cost of sales
Gross profit
Operating expenses
Income from discontinued operations before income taxes
Benefit for income taxes
Income from discontinued operations, net of tax

2021

42 
28 
14 
9 
5 
(1) 
6 

$ 

$ 

No  net  sales  were  recorded  within  continuing  operations  for  retail  stores  within  discontinued  operations  that  the  Company 
disposed  of  and  expects  to  dispose  of  without  a  supply  agreement.  These  net  sales  have  been  eliminated  upon  consolidation 
within the Wholesale segment of continuing operations and amounted to $22 million in fiscal 2021.

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 
DISCLOSURE

Not applicable.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation 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  the  effectiveness  of  the  design  and  operation  of  our  disclosure  controls  and  procedures  (as  defined  in 
Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this 
Annual  Report  (the  “Evaluation  Date”).  Based  on  this  evaluation,  our  Chief  Executive  Officer  and  Chief  Financial  Officer 
concluded that, as of the Evaluation Date, our disclosure controls and procedures were 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 financial reporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 
1934, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officers 
and  effected  by  our  Board  of  Directors,  management  and  other  personnel,  to  provide  reasonable  assurance  regarding  the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles 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 generally accepted accounting principles, and that receipts and expenditures are being made only in 
accordance with authorizations of our management and directors; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition 
of our 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. 
Projections  of  any  evaluation  of  effectiveness  to  future  periods  are  subject  to  the  risk  that  controls  may  become  inadequate 
because of changes in conditions, or that the degree of compliance with 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 financial reporting as of July 29, 2023. In making this assessment, our management used the criteria set forth by 
the  Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission  (COSO)  in  the  Internal  Control-Integrated 
Framework  (2013  framework).  Based  on  its  assessment,  our  management  concluded  that,  as  of  July  29,  2023,  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  July  29,  2023  has  been  audited  by  KPMG  LLP,  an 
independent registered public accounting firm, as stated in its attestation report which is included in Financial Statements and 
Supplementary Data in Part II, Item 8 of this Annual Report.

Changes in Internal Controls Over Financial Reporting

No  change  in  our  internal  control  over  financial  reporting  (as  such  term  is  defined  in  Securities  Exchange  Act  of  1934,  as 
amended  Rule  13a-15(f)  or  15d-15(f))  occurred  during  the  fiscal  quarter  ended  July  29,  2023  that  materially  affected,  or  is 
reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B.    OTHER INFORMATION

On  June  16,  2023,  Danielle  Benedict,  our  Chief  Human  Resources  Officer,  terminated  an  existing  10b5-1  sales  plan  dated 
December  21,  2022  and  following  such  termination  entered  into  a  new  10b5-1  sales  plan  intended  to  satisfy  the  affirmative 
defense  conditions  of  Rule  10b5-1(c)  under  the  Securities  Exchange  Act  of  1934,  as  amended.  The  plan  provides  for  the 
potential sale, on the dates and at the prices set forth in the plan, of up to 17,500 shares of our common stock from October 2, 
2023 through the plan’s end date of June 7, 2024.

ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 

Not applicable.

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ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

PART III.

The information required by this item will be contained, in part, in our Definitive Proxy Statement on Schedule 14A for our 
Annual Meeting of Stockholders to be held on December 19, 2023 (the “Proxy Statement”) under the captions “Directors and 
Nominees for Director,” “Executive Officers of the Company,” “Delinquent Section 16(a) Reports,” if applicable, “Committees 
of the Board of Directors,” “Nomination of Directors,” and “Stockholder Director Recommendations and Proxy Access” and is 
incorporated herein by this reference. 

We  have  adopted  a  code  of  conduct  and  ethics  that  applies  to  all  employees,  including  our  Chief  Executive  Officer,  Chief 
Financial  Officer  and  Chief  Accounting  Officer.  Our  code  of  conduct  and  ethics  is  publicly  available  on  our  website  at 
www.unfi.com and is available free of charge by writing to United Natural Foods, Inc., 11840 Valley View Road, Eden Prairie, 
MN 55344, Attn: Investor Relations. We intend to make any legally required disclosures 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 our website address is 
provided as an inactive textual reference only.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by this item will be contained in the Proxy Statement under the captions “Director Compensation,” 
“Executive Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Potential Payments 
Upon Termination or Change-in-Control,” “CEO Pay Ratio,” “Compensation Risk,” “Compensation Committee Interlocks and 
Insider Participation” and “Report of the Compensation Committee” and is incorporated herein by this reference.

ITEM  12.        SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT  AND 
RELATED STOCKHOLDER MATTERS

The information required by this item will be contained in the Proxy Statement under the caption “Stock Ownership of Certain 
Beneficial  Owners  and  Management”  and  “Securities  Authorized  for  Issuance  Under  Equity  Compensation  Plans”  and  is 
incorporated herein by this reference.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be contained in the Proxy Statement under the captions “Certain Relationships and 
Related Transactions” and “Director Independence” and is incorporated herein by this reference.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be contained in the Proxy Statement under the captions “Fees Paid to KPMG LLP” 
and “Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services,” and is incorporated herein by 
this reference.

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PART IV.

ITEM 15.    EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a)1.

Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(a)2.

(a)3.&(b)

Exhibit No.
2.1

2.2

3.1

3.2

4.1

4.2*
10.1**

10.2**

10.3**

10.4+

10.5

10.6

10.7

10.8

Financial Statement Schedules:
All schedules have been omitted because they are either not required or the information required is included 
in our consolidated financial statements or the notes thereto included in Item 8 hereof.
Exhibits: 

Description
Agreement  and  Plan  of  Merger,  dated  July  25,  2018,  by  and  among  SUPERVALU  INC.,  SUPERVALU 
Enterprises, Inc., the Registrant and Jedi Merger Sub, Inc. (incorporated by reference to the Registrant’s Current 
Report on Form 8-K, filed on July 26, 2018).
First Amendment to Agreement and Plan of Merger, dated as of October 10, 2018, by and among United Natural 
Foods,  Inc.,  Jedi  Merger  Sub,  Inc.,  SUPERVALU  INC.  and  SUPERVALU  Enterprises,  Inc.  (incorporated  by 
reference to the Registrant’s Current Report on Form 8-K, filed on October 10, 2018).
Certificate of Incorporation of the Registrant, as amended (restated for SEC filing purposes only) (incorporated 
by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2015).
Fifth Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Quarterly 
Report on Form 10-Q for the quarter ended April 29, 2023).
Specimen Certificate for shares of Common Stock, $0.01 par value, of the Registrant (incorporated by reference 
to the Registrant’s Annual Report on Form 10-K for the year ended August 1, 2009).
Description of the Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934. 
United  Natural  Foods,  Inc.  2012  Equity  Incentive  Plan  (incorporated  by  reference  to  the  Registrant’s  Current 
Report on Form 8-K filed on December 18, 2012) (the “2012 Equity Plan”).
Form  of  Terms  and  Conditions  of  Grant  of  Non-Statutory  Stock  Options  to  Employee,  pursuant  to  the  2012 
Equity Plan (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended 
January 26, 2013).
United Natural Foods, Inc. Amended and Restated 2012 Equity Incentive Plan (incorporated by reference to the 
Registrant’s Definitive Proxy Statement on Schedule 14A filed on November 6, 2015) (the “A&R 2012 Equity 
Plan”).
Agreement  for  the  Distribution  of  Products,  effective  September  28,  2015,  between  Whole  Foods  Market 
Distribution, Inc. and the Registrant (incorporated by reference to the Registrant’s Quarterly Report on Form 10-
Q for the quarter ended October 31, 2015).
First Amendment to Agreement for Distribution of Products, dated March 3, 2021, between the Registrant and 
Whole Foods Market Distribution, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-
K, filed on March 4, 2021).
Loan Agreement, dated June 3, 2022, by and among the Registrant, UNFI Canada, Inc., the financial institutions 
that  are  parties  thereto  as  lenders,  Wells  Fargo  Bank,  National  Association  and  the  other  parties  thereto 
(incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  April  30, 
2022).
Term Loan Agreement, dated October 22, 2018, by and among United Natural Foods, Inc., SUPERVALU INC., 
Goldman Sachs Bank USA, as administrative agent for the lenders, and the lenders party thereto (incorporated 
by reference to Registrant’s Current Report on Form 8-K filed on October 25, 2018).
Amendment No. 1 to Term Loan Agreement, dated as of February 11, 2021, by and among the Registrant and 
SUPERVALU INC., Credit Suisse AG, Cayman Islands Branch, Goldman Sachs Bank USA and the other lender 
parties  thereto  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter 
ended January 30, 2021).

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Exhibit No.
10.9

10.10

10.11**

10.12**

10.13**

10.14**

10.15**

10.16

10.17**

10.18**

10.19**

10.20**

10.21**

10.22**

10.23**

10.24**

10.25**

10.26**

10.27**

10.28**

10.29**

Description
Amendment No. 2 to Term Loan Agreement, dated as of November 10, 2021, by and among the Registrant and 
SUPERVALU INC., CreditSuisse AG, Cayman Islands Branch and the other lender parties thereto (incorporated 
by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2021).
Amendment No. 3 to Term Loan Agreement, dated June 3, 2022, by and among the Registrant and 
SUPERVALU INC., Credit Suisse AG, Cayman Islands Branch and the other lender parties thereto 
(incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 
2022).
Amended and Restated Employment Agreement, dated as of November 5, 2018 and effective as of October 22, 
2018,  by  and  among  United  Natural  Foods,  Inc.  and  Steven  L.  Spinner  (incorporated  by  reference  to  the 
Registrant’s Current Report on Form 8-K filed on November 8, 2018).
Amendment to Amended and Restated Employment Agreement, dated as of February 6, 2020, by and between 
the Registrant and Steven L. Spinner (incorporated by reference to the Registrant’s Quarterly Report on Form 
10-Q for the quarter ended February 1, 2020).
Second  Amendment  to  Amended  and  Restated  Employment  Agreement,  dated  as  of  March  9,  2021,  by  and 
between the Registrant and Steven L. Spinner (incorporated by reference to the Registrant’s Quarterly Report on 
Form 10-Q for the quarter ended January 30, 2021).
Form  of  Second  Amended  and  Restated  Change  in  Control  Agreement  (incorporated  by  reference  to  the 
Registrant’s Current Report on Form 8-K filed on November 8, 2018).
Amended and Restated Indemnification Agreement (incorporated by reference to the Registrant’s Current Report 
on Form 8-K filed on November 8, 2018).
Indenture, dated October 22, 2020, among the Registrant, its subsidiary guarantors named therein and U.S. Bank 
National Association, as trustee (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed 
on October 26, 2020).
Change of Control Severance Agreement, dated as of November 30, 2015, by and among SUPERVALU INC. 
and  Michael  Stigers  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the 
quarter ended January 30, 2021).
Transition  Agreement,  dated  as  of  October  22,  2018,  by  and  among  the  Registrant,  SUPERVALU  INC.  and 
Michael  Stigers  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter 
ended January 30, 2021).
First  Amendment  to  Transition  Agreement,  dated  as  of  March  27,  2019,  by  and  among  the  Registrant, 
SUPERVALU  INC.  and  Michael  Stigers  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on 
Form 10-Q for the quarter ended January 30, 2021).
Second  Amendment  to  Transition  Agreement,  dated  as  of  May  12,  2020,  by  and  among  the  Registrant, 
SUPERVALU  INC.  and  Michael  Stigers  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on 
Form 10-Q for the quarter ended January 30, 2021).
Third  Amendment  to  Transition  Agreement,  dated  as  of  March  9,  2021,  by  and  among  the  Registrant, 
SUPERVALU  INC.  and  Michael  Stigers  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on 
Form 10-Q for the quarter ended January 30, 2021).
CEO  Severance  Agreement,  dated  effective  August  9,  2021,  between  the  Registrant  and  J.  Alexander  Miller 
Douglas (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 31, 
2021).
CEO  Change  in  Control  Agreement,  dated  effective  August  9,  2021,  between  the  Registrant  and  J.  Alexander 
Miller Douglas (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended 
July 31, 2021).
CEO  Indemnification  Agreement,  dated  effective  August  9,  2021,  between  the  Registrant  and  J.  Alexander 
Miller Douglas (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended 
July 31, 2021).
Form of RSU Award Agreement (CEO) pursuant to the Registrant’s Amended and Restated 2020 Equity 
Incentive Plan (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter 
ended October 30, 2021).
Form of PSU Award Agreement (CEO) pursuant to the Registrant’s Amended and Restated 2020 Equity 
Incentive Plan (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter 
ended October 30, 2021).
Form of Inducement RSU Award Agreement (CEO) (incorporated by reference to the Registrant’s Quarterly 
Report on Form 10-Q for the quarter ended October 30, 2021).
Form of Inducement PSU Award Agreement (CEO) (incorporated by reference to the Registrant’s Quarterly 
Report on Form 10-Q for the quarter ended October 30, 2021).
Waiver and Release Agreement, by and between the Registrant and Jill E. Sutton (incorporated by reference to 
the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 29, 2022).

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Exhibit No.
10.30**

10.31**

10.32**

10.33**

10.34**

10.35**

Description
Amended and Restated 2020 Equity Incentive Plan, as amended on June 3, 2021 (incorporated by reference to 
the Registrant’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2021).
Form of RSU Award Agreement pursuant to the Registrant’s Amended and Restated 2020 Equity Incentive Plan 
(incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  May  1, 
2021).
Form of PSU Award Agreement pursuant to the Registrant’s Amended and Restated 2020 Equity Incentive Plan 
(incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  May  1, 
2021).
Form of Inducement RSU Award Agreement (incorporated by reference to the Registrant’s Quarterly Report on 
Form 10-Q for the quarter ended January 30, 2021).
Form of RSU Award Agreement (Director) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants 
made beginning March 2020) (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for 
the quarter ended February 1, 2020).
United  Natural  Foods,  Inc.  Annual  Incentive  Plan,  as  further  amended,  effective  as  of  March  3,  2023 
(incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 28, 
2023).

10.36* ** United Natural Foods, Inc. Annual Incentive Plan, as further amended, effective as of September 21, 2023.
10.37**

Form  of  Amended  and  Restated  Severance  Agreement,  effective  as  of  October  23,  2022  (incorporated  by 
reference to the Registrant's Annual Report on Form 10-K for the year ended July 30, 2022).

10.38**

10.39**

10.40**

10.41**

10.42**

Consulting  Agreement,  effective  as  of  October  31,  2022,  by  and  among  the  Registrant  and  Eric  Dorne 
(incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 30, 2022).

Second Amended and Restated United Natural Foods, Inc. 2020 Equity Incentive Plan, effective as of March 3, 
2023  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended 
January 28, 2023).

Form of RSU Award Agreement pursuant to Registrant’s Second Amended and Restated 2020 Equity Incentive 
Plan  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended 
January 28, 2023).
Form  of  PSU  Award  Agreement  pursuant  to  the  Registrant’s  Second  Amended  and  Restated  2020  Equity 
Incentive  Plan  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter 
ended January 28, 2023).
Addendum  to  Consulting  Agreement,  effective  as  of  April  12,  2023,  by  and  among  the  Registrant  and  Eric 
Dorne  (incorporated  by  reference  to  the  Registrant’s  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended 
April 29, 2023).

10.43* **

10.44* **

10.45* **

10.46* **

10.47* **

10.48* **

Form of RSU Award Agreement (CEO) (for grants made after September 21, 2023) pursuant to the Registrant’s 
Second Amended and Restated 2020 Equity Incentive Plan.
Form of PSU Award Agreement (CEO) (for grants made after September 21, 2023) pursuant to the Registrant’s 
Second Amended and Restated 2020 Equity Incentive Plan.
Form of RSU Award Agreement (for grants made after September 21, 2023) pursuant to the Registrant’s Second 
Amended and Restated 2020 Equity Incentive Plan.
Form of PSU Award Agreement (for grants made after September 21, 2023) pursuant to the Registrant’s Second 
Amended and Restated 2020 Equity Incentive Plan.
Form  of  RSU  Award  Agreement  (Director)  (for  grants  made  after  September  21,  2023)  pursuant  to  the 
Registrant’s Second Amended and Restated 2020 Equity Incentive Plan.
Form of Indemnification Agreement.

21*

23.1*
31.1*
31.2*
32.1*

32.2*

97.1*

Subsidiaries of the Registrant.

Consent of Independent Registered Public Accounting Firm.
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Erroneously Awarded Incentive-Based Compensation Clawback Policy, effective October 2, 2023.

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Exhibit No.
101*

104

Description
The following materials from the United Natural Foods, Inc.’s Annual Report on Form 10-K for the fiscal year 
ended  July  29,  2023,  formatted  in  Inline  XBRL  (eXtensible  Business  Reporting  Language):  (i)  Consolidated 
Balance  Sheets,  (ii)  Consolidated  Statements  of  Operations,  (iii)  Consolidated  Statements  of  Comprehensive 
Income, (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and 
(vi) Notes to Consolidated Financial Statements.
The cover page from the Registrant’s Annual Report on Form 10-K for the year ended July 29, 2023, filed with 
the SEC on September 26, 2023, formatted in Inline XBRL (included in Exhibit 101).

* Filed herewith.

** Denotes a management contract or compensatory plan or arrangement.

+ Confidential treatment has been requested and granted with respect to certain portions of this exhibit pursuant to Rule 24b-2 
of  the  Securities  Exchange  Act  of  1934,  as  amended.  Omitted  portions  have  been  filed  separately  with  the  United  States 
Securities and Exchange Commission.

ITEM 16.    FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant 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 its behalf by the undersigned thereunto duly authorized.

UNITED NATURAL FOODS, INC.

/s/ JOHN W. HOWARD
John W. Howard
Chief Financial Officer (Principal Financial Officer)
Dated: September 26, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 
persons on behalf of the registrant and in the capacities and on the dates indicated.

Name
/s/ J. ALEXANDER MILLER DOUGLAS Chief Executive Officer (Principal Executive 

Title

Officer) and Director

J. Alexander Miller Douglas

/s/ JOHN W. HOWARD

John W. Howard

/s/ R. ERIC ESPER

R. Eric Esper

/s/ JACK L. STAHL

Jack L. Stahl

/s/ ERIC F. ARTZ

Eric F. Artz

/s/ ANN TORRE BATES

Ann Torre Bates

/s/ GLORIA R. BOYLAND

Gloria R. Boyland

/s/ DENISE M. CLARK

Denise M. Clark

/s/ DAPHNE J. DUFRESNE

Daphne J. Dufresne

/s/ MICHAEL S. FUNK

Michael S. Funk

/s/ JAMES L. MUEHLBAUER

James L. Muehlbauer

/s/ PETER A. ROY

Peter A. Roy

/s/ MOHAMMAD SHAMIM

Mohammad Shamim

Date
September 26, 2023

September 26, 2023

Chief Financial Officer (Principal Financial 
Officer)

Chief Accounting Officer (Principal Accounting 
Officer)

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

September 26, 2023

Chairman

Director

Director

Director

Director

Director

Director

Director

Director

Director

105