UNFI
#<UNK>, that is going to be ---+ there will be a reconciliation of that on the website that should give you the answers to your questions you're looking for.
Yes.
That is one that I just cannot win at, so we're going to stay away from that one.
We are pretty confident in that team, and we obviously get the benefit of new store openings.
But I wouldn't want to comment any more than that.
Our distribution program covers 365 and Whole Foods stores, yes.
No, we do their private label today.
Thanks, <UNK>.
I do not think we can answer that, unfortunately.
I think that we need obviously to get back onto a sales growth.
You look back at UNFI's last five years, 2015 included in our compounded annual growth rate was over 15% or right around there.
So we have got to get back on our historical growth rate.
Maybe it might not be that high, maybe it is that high, I am not sure yet.
But first and foremost, I think we have to get back on a growth trajectory.
Promotional spend tends to be lumpy, so sales fall off, maybe the promotional activity falls off.
there is always a timing difference between what happens in the promotional activity and what happens in the sales.
So at some point, somebody wakes up and says well hold on a second, we are not growing in channel X, we've got to get back to promotion and lo and behold we get promotional activity.
So I don't think we could give you any specific color on when and how, other than that activity tends to be, like I said, lumpy over the course of the year.
But first and foremost, we're focused on getting our sales trajectory back, and believe that based on the infrastructure, that we will do it.
I think we have a general idea of what that number is, but again, it is not something that we're going to want to publicly disclose.
And the other part of that is, that we have markets that have more capacity than others.
Sometimes you can't pick and choose.
But generally speaking, we get an opportunity, we're going to take it.
Thank you.
I don't see it as a sales issue, as much as it was a margin issue.
Because certainly, if you do the math and you back out a customer loss and some of the things that are happening within our current customers, the growth was while not quite at industry growth, it was still pretty strong.
It is really more of a margin issue associated with promotional activity, lack of inflation, Canadian FX, certainly competitive pressure at the retailers, and fuel.
I would say those are the primary drivers, and they all hit us at once and it is just a matter of working our way through them.
I do not think the competitive nature of distribution is changing a lot, it has been competitive for a long time and it will continue to be that way.
I think what hurt us was more the margin issues than anything else.
Again, this is opinion, not fact.
So but it is my view that manufacturers will go to where there is growth, and they will promote where there is growth.
So for example, the natural industry has been growing at a slower rate than let's say mass or conventional then perhaps they might make the decision to promote more heavily in those channels than they do in natural.
But and to the comment that I made earlier, some point, somebody's going to wake up and say, wait, we do not have any growth in natural.
Our challenge to be more further indexed across a wider range of channels than we are today.
That would make us less susceptible to these pretty significant shifts.
I think you have said that right.
It will have an impact on this year, but not enough for us to change our guidance, so we will not be doing that.
And as far as next year, and we have not provided guidance for next year yet, but certainly as we do, that will be included.
Yes, it was really a juxtaposition against Q2 where they were lower than we expected, so those comments were really about the operating income expansion in Q3 and Q4.
It is yes to all of the above.
It is the newly organized sales structure.
It is M&A, it is looking at new channels of growth for us where we historically haven't played.
So I think it is a variety of things, <UNK>.
I think when you look at fuel surcharge and FX, year over year, Q2 we had a headwind between the two of about 30 basis points.
If you look at it sequentially, it was probably about 12 basis points between the two of them.
As you look forward to the second half, if fuel stayed where it is at from a surcharge standpoint and FX stayed where it's at, you'd probably have about a 15 to 20 basis point headwind over last year for the second half on those two items.
I think it is ---+ Tony's is a business that is doing extremely well for us, great acquisition, a ton of terrific people.
As we have said earlier, we have moved the Tony's product categories into our Denver warehouse, and I referenced that in my prepared comments.
I'm very optimistic about what is taking place within that facility, and certainly now with what is going to take place in Florida.
Certainly, the reorganization will help us identify for example [protein] and related opportunities in more historical UNFI customers in the West, and the same thing for historical Tony's customers with natural organic in the West.
So I would say I have been doing this a long time, and Tony's certainly ranks up there as one of the better acquisitions we have ever done.
We are seeing deflation on the meat side, and that is certainly impacting the overall results.
But that business has been able to maintain its bottom line, despite the deflation headwinds that they have faced.
I am not sure I follow that question.
I think it is yes to both.
The idea of the acquisition certainly as it relates to Global is to move a much wider array of fresh into the Florida market, as well as give us the ability to attract other fresh customers throughout the Southeast.
In the case of Haddon House, it is adding a much more robust line of gourmet ethnic categories of products and brands that we can deploy into other markets and into existing UNFI customers.
I cannot comment on Whole Foods, I can just tell you that in our world, all of our things that do not touch the customer today are centralized.
Inbound logistics, the way we manage our fleet, and so on and so forth.
But what we are changing is the touch point to the customer and essentially bringing the customer closer to the decision maker.
So instead of the customer having to deal with four or five different entities within UNFI, in the new world, they will do with one or two.
That is a good point, that's an important point.
That our procurement and fulfillment is already centralized, and that is not changing.
We have got a lot of activity taking place, but we think it is a little bit of a strategic decision on our part not to disclose where it's going next.
Obviously, we are deploying into Florida, we have already talked about deploying into Denver, but we're not going to talk about where we're going to actually go next or be next until we are there.
It's hard to know.
We've got folks that are eagerly working on that, and certainly if it is material or we are in a position to announce it.
But we are optimistic, like <UNK> said earlier, we like the customer pipeline and we certainly like the M&A pipeline.
Today, we have a national financial suite, but there is a lot of work we could be doing in terms of shared services.
We've got plenty to keep us busy on the warehouse side from a technology standpoint.
So that is going to be at least, well I would not want to comment when it's going to take place but it certainly is some of the work we need to do.
It would be ---+ I cannot really comment on that.
We're looking at a wide variety of companies, I would tell you that most of them are not going to be the size of Haddon House.
Haddon House was one of the larger ones that was out there, Tony's was certainly larger, so anywhere from Haddon House down I would say.
Thank you everybody for joining us today.
Our long-term vision for UNFI remains unchanged.
Build out the store and provide our customers and exemplary experience centered around product offering, service, logistics, supply chain, scale and cost.
We look forward to sharing more detail around our outlook towards the end of our FY16.
Thank you for joining us this evening, and we look forward to seeing those of you attending Expo next week in Anaheim, California.
Thanks and have a great night.
