US Foods to sell Chef’Store

Just a few months after announcing plans to expand its Chef’Store brick-and-mortar footprint by adding five new locations, foodservice distributor US Foods Holding Corp. announced Wednesday it is dropping the chain.

The company said in a press release and reiterated at its 2024 investor day event that “the company is fully committed to growing its core broadline business, and therefore has begun exploring strategic alternatives for its Chef’Store cash and carry retail business.”

US Foods said it still plans to open five new Chef’Store locations later this year, bringing the chain to about 95 locations in 14 states.

“Our objective is to maximize value to shareholders and ensure continued success for Chef’Store and our Chef’Store associates,” the company added. “As we move through this review process, we will remain fully committed to supporting the business, our associates, and our customers – including opening five new Chef’Store in 2024. It is business as usual for our Chef’Store associates, facilities and customers as we continue to focus on providing great service to our valued Chef’Store customers.”

In February, US Foods announced plans to open the five new Chef’Store locations in the second half of 2024 in Beaverton, Ore.; Hampton, Va.; Hickory, N.C.; Sandy Springs, Ga.; and Virginia Beach, Va. 

Related:US Foods Chef’Store plans five new store openings in 2024

“We are thrilled to enhance our store footprint into new areas of the country where we can serve existing and new customers with value and service, and a vast selection of restaurant-quality products and supplies,” said Chef'Store President Irfan Badibanga in February. “Our continued growth plans support our commitment to serving independent restaurant owners, foodservice operators, and community members with the products they need, exactly when they need them.”

In a response to an email request for confirmation, US Foods said on Wednesday that the purchase of Chef’Store came with the expectation that it would “generate significant synergies with our broadline business, however, those benefits have been very limited. As we have evolved our strategy to increase focus on execution in our broadline operations, we are exploring strategic alternatives for our cash and carry stores.”

“We believe Chef’Store will benefit from focused investment under new ownership. A potential sale of Chef’Store would enable us to redirect prioritization to our core broadline operations and uniquely position US Foods as the only pure-play U.S. focused foodservice distributor,” the company said. 

Related:US Foods names Dave Flitman as CEO

US Foods also noted that Chef’Store represents less than 5% of its total 2024 estimated adjusted EBITDA.

“We are excited to highlight our business drivers and introduce our new long-term financial targets,” said US Foods CEO Dave Flitman in a press release. “With the support and dedication of our 30,000 associates, I am confident in our ability to deliver shareholder value in both the near- and long-term, as we continue to leverage our customer-centric model and differentiation, advance our operational excellence and remain disciplined on our capital allocation priorities. 

“Further highlighting the confidence we have in our future and our acceleration in operating cash flow, our Board has authorized a $1 billion share repurchase program, which we see as highly accretive to shareholder value creation.”