Natural Independents Grow Sales: UNFI

MARK HAMSTRA

PROVIDENCE, R.I. — Independent customers of United Natural Foods Inc. here have experienced sales growth in recent months, the natural and organic products distributor said Thursday.

In a conference call with analysts discussing results for its fiscal second quarter, UNFI said its sales volume to independents rose by 7.9% in the quarter, excluding the impact of acquisitions.

"It's consumer demand, No, 1," said Steven L. Spinner, chief executive officer, in explaining the growth among smaller operators. "We think that there's just a greater confidence on the part of the consumers towards eating organic for a variety of reasons, including confidence in the organic label, [and] the healthy considerations associated with what organic brings."

In addition, he said some shifts away from organic offerings by some mass retailers "may be driving some of the traffic into the independent retailers."

For the quarter, which ended Jan. 29, net income at UNFI was up 19.6%, to $18.7 million, on a sales gain of 24.1%, to $1.11 billion, compared with year-ago results.

Gross margin was 17.8% for the second quarter of fiscal 2011, a 45 basis-point decline from the first quarter, which the company attributed to a shift in its product mix.

The company raised its sales guidance for the year to a range of $4.4 billion to $4.5 billion, up from previous guidance of $43,5 billion to $4.45 billion.