UNITED STATESSECURITIES 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 1934For the fiscal year ended August 1, 2020 

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

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

Delaware   05-0376157(State or other jurisdiction of (I.R.S. Employer Identification No.)incorporation or organization)

313 Iron Horse Way, Providence, Rhode Island   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 Trading Symbol Name of each exchange on which registered

Common stock, par value $0.01 UNFI 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 ¨ No xIndicate 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 xIndicate 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 submitsuch 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 ☐ Accelerated filer ☒

Non-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. ☒

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 $379.5 million based upon the closing price of the registrant’s common stock on the New York Stock Exchange on January 31, 2020. The number of shares ofthe registrant’s common stock, par value $0.01 per share, outstanding as of September 24, 2020 was 54,839,901.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on January 12, 2021 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

Section Page

Part I Item 1. Business 1Item 1A. Risk Factors 9Item 1B. Unresolved Staff Comments 23Item 2. Properties 23Item 3. Legal Proceedings 25Item 4. Mine Safety Disclosures 25

Part II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25Item 6. Selected Financial Data 27Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57Item 8. Financial Statements and Supplementary Data 60Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 127Item 9A. Controls and Procedures 127Item 9B. Other Information 127

Part III Item 10. Directors, Executive Officers and Corporate Governance 128Item 11. Executive Compensation 128Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 128Item 13. Certain Relationships and Related Transactions, and Director Independence 128Item 14. Principal Accounting Fees and Services 128

Part IV Item 15. Exhibits, Financial Statement Schedules 129Item 16. Form 10-K Summary 129 Signatures 133

Table of Contents

PART I.

ITEM 1.    BUSINESS

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 conductour business through various subsidiaries. Since the formation of our predecessor in 1976, we have grown our business both organically and through acquisitions, which have expandedour distribution network, product selection and customer base.

Our Background

As a leading distributor of natural, organic, specialty, produce, and conventional grocery and non-food products, and provider of retailer services in the United States and Canada, webelieve we are uniquely positioned to provide the broadest array of products and services to customers throughout North America. We offer more than 275,000 products consisting ofnational, regional and private label brands grouped into six product categories: grocery and general merchandise; produce; perishables and frozen foods; nutritional supplements andsports nutrition; bulk and food service products; and personal care items. Through our October 2018 acquisition of SUPERVALU INC. (“Supervalu”), we are transforming into NorthAmerica’s premier wholesaler with 55 distribution centers and warehouses representing approximately 29 million square feet of warehouse space. We believe our total productassortment and service offerings are unmatched by our wholesale competitors. We plan to aggressively pursue new business opportunities to independent retailers who operate diverseformats, regional and national chains, as well as international customers with wide-ranging needs. During the fourth quarter of fiscal 2020, we determined we no longer met the held forsale criterion for a probable sale to be completed within 12 months for the Cub Foods business and the majority of the remaining Shoppers locations. We reviewed our reportablesegments and determined we were required to report Retail as a separate segment. Our business is classified into two reportable segments: Wholesale and Retail; and also includes amanufacturing division and a branded product line division.

Our Commitment to Social and Environmental Responsibility

We are committed to being good stewards of our planet, our communities and our people, through tangible action. We continue to focus on reducing our environmental impact,conserving natural resources and promoting sustainability across our value chain and in our operations. We invest in the efficiency of our transportation fleet and warehouses, generateon-site solar power for operations use, and focus on diverting waste from landfills. In early 2020, UNFI joined the Climate Collaborative, solidifying commitments to energy efficiency,food waste reduction and sustainable transportation.

We believe that freedom of food choice matters and we play a vital role in delivering safe, quality and nutritious food options to more tables across North America. We are also workingto increase access to better food, particularly for people in low-income and rural communities, or vulnerable situations, through monetary and in-kind donations, and operating retailstores in underserved areas. Our 501(c)(3) nonprofit, the UNFI Foundation, provides grants to nonprofit organizations working to build better food systems and nurture everyday health.We also encourage our associates to make a difference by volunteering their time in their communities.

The safety and well-being of our associates is a top priority. Throughout the COVID-19 pandemic, we have quickly and continuously adopted and added safety measures to protect ourassociates and the communities we serve. We are focused on fostering a culture of caring and safety; we are continuously striving toward zero injuries and accidents.

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

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Our Strategic Priorities

We remain focused on five strategic priorities that we believe will contribute to our future success:

1) Foster a People-Driven Culture. Embracing our core mission to transform the world of food and recognizing that our culture of safety and integrity is at the forefront ofeverything we do.

2) Financial Accountability. Delivering on our financial commitments, driving performance to achieve financial targets. We are focused on completing the integration of Supervaluinto UNFI, realizing cost synergies, optimizing our distribution center network, driving cross-selling of products and services across our businesses and generating cash to paydown debt.

3) Execute on our Core Business. Completing our Thrive2 initiative, our project to drive integrated work streams and standardized operating procedures, which provide betterexperiences for our customers, associates and suppliers and allow us to realize synergy benefits from simplification, pursuing additional operational efficiencies, and deliveringfood solutions.

4) Focus on Growth. Building out the store through effectively cross-selling our entire portfolio of products and services, which provide differentiated solutions for our customers,and actively pursuing new customers.

5) Divest Retail. Divesting our retail assets in a thoughtful and economic manner, a process which we believe may take up to an additional 24 months to be complete.

In recent years, our sales to existing and new customers have increased through:• the acquisition of natural and specialty products distributors and most recently the previously largest publicly traded conventional distributor, Supervalu;• the continued growth of the natural and organic products industry in general;• increased market share as a result of our high quality service and broader product selection, including specialty products;• the expansion of our existing distribution centers;• the construction of new distribution centers; and• the introduction of new products and the development of our own line of natural, organic and conventional branded products.

Through these efforts, we believe that we have been able to broaden our geographic penetration, expand our customer base, enhance and diversify our product selections, increase ourmarket share, increase operating efficiencies in existing facilities and open new facilities. Our strategic plan includes increasing the type of products and services we provide to ourcustomers, including perishable products and conventional produce to “build out the store” and cover center store, as well as perimeter offerings and private brands products, andproviding services to additional customers, including marketing and e-commerce solutions.

Our Customers

We maintain long-standing relationships with our customers. We serve approximately 30,000 unique customer locations, primarily located across the United States and Canada, whichwe classify into five customer types:

• Chains, which consists of customer accounts that typically have more than 10 operating stores and exclude stores included within the Supernatural and Other channels definedbelow;

• Independent retailers, which include smaller size accounts and include single store and multiple store locations, but are not classified within Chains above or Other discussedbelow;

• Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market;• Retail, which includes our Retail segment, including the Cub Foods business and the majority of the remaining Shoppers locations, excluding five Shoppers locations that are

held for sale; and• Other, which includes international customers outside of Canada, foodservice, e-commerce, conventional military business and other sales.

In the fourth quarter of fiscal 2020, we recast our presentation of net sales by customer channel to be on a basis consistent with customer size, with international customers other thanCanada and alternative format sales continuing to be classified within Other. Refer to Part II, Item 7—Results of Operations of this Annual Report on Form 10-K for additionalinformation.

We have been the primary distributor to Whole Foods Market for more than twenty years. Under the terms of our agreement with Whole Foods Market, we serve as the primarydistributor to Whole Foods Market in all of its regions in the United States. Our agreement with Whole Foods Market expires on September 28, 2025. Whole Foods Market is our onlycustomer that represented more than 10% of total net sales in fiscal 2020. Our customers include single and multiple store independent grocery store retailers, regional chains,foodservice and the military, many of which are long tenured customers.

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The following were included among our wholesale customers for fiscal 2020:

• Whole Foods Market, the largest supernatural chain in the United States and Canada; and• Cash and Carry Stores, The Fresh Market, Coborn’s, Natural Grocers, Jerry’s Foods, Vitamin Cottage, Festival Foods, All American Quality Foods, Ahold Delhaize banners

(Giant-Carlisle, Stop & Shop, Giant-Landover, and Hannaford), Lunds & Byerlys, Superior Grocers, Vallarta Supermarkets, Wegmans, Raley’s, Redner’s Markets,Neiman’s Family Market, Dierberg’s, El Super Supermarkets, Sprouts Farmers Market, Kroger, Harris Teeter, Giant Eagle, Market Basket, Schnucks Shop-Rite, Publix,Raley’s and Loblaws.

Our international net sales primarily reflect UNFI Canada, Inc. (“UNFI Canada”) and exclude sales transacted in U.S. dollars and shipped internationally, which is a smaller componentof our business. UNFI Canada represented approximately one percent of our net sales in fiscal 2020. We believe that our sales outside the United States will expand as we seek tocontinue to grow our Canadian operations.

Recent Acquisitions

A key component of our business and growth strategy has been to acquire wholesalers differentiated by product offerings, service offerings and market area. We believe the expandedproduct and service offerings from these acquisitions has enhanced and will continue to enhance our ability to acquire new customers and present opportunities for cross-sellingcomplementary product lines. We believe that as a result of the Supervalu acquisition, we carry an unmatched product assortment that allows us to cross-sell natural products toconventional customers and conventional products to natural customers, all while reducing the number of weekly deliveries that each receives. Supervalu provided a robust suite ofservices that are now available to our natural customer base, services necessary to run their business and that provide opportunities to simplify and focus on their operations. We alsobelieve the Supervalu acquisition provides additional scale to lower our overall costs. Finally, we are now a coast-to-coast distributor with customers in all fifty states as well as all tenprovinces in Canada, making us a desirable partner for consumer product manufacturers. Our expanded scale and product assortment as a result of the Supervalu acquisition positionedus to continue to serve our customers and communities through the COVID-19 pandemic.

Our recent business acquisitions include:

• Supervalu. On October 22, 2018 (the “Supervalu acquisition date”), we acquired Supervalu for an aggregate purchase price of approximately $2.3 billion, which included theassumption of outstanding debt and liabilities. The acquisition of Supervalu accelerated our “build out the store” strategy, diversified our customer base, enabled cross-sellingopportunities, expanded market reach and scale, enhanced technology, capacity and systems, and is expected to continue to deliver significant cost synergies and acceleratepotential growth.

• Haddon House. In May 2016, we acquired Haddon House Food Products Inc. (“Haddon”) and certain affiliated entities and real estate for total cash consideration ofapproximately $217.5 million. Haddon is a distributor and merchandiser of natural and organic and gourmet ethnic products throughout the eastern United States. Haddon has adiverse, multi-channel customer base including supermarkets, gourmet food stores and independent retailers. Our acquisition of Haddon has expanded our gourmet and ethnicproduct and service offering which continues to play an important role in our ongoing strategy to build out these product categories. Haddon’s operations have been combinedwith our existing business in the United States.

• Nor-Cal Produce and Global Organics. In March 2016, we acquired (i) Nor-Cal Produce, Inc. (“Nor-Cal”) and an affiliated entity as well as certain real estate, in a cashtransaction for approximately $67.8 million, and, (ii) certain assets of Global Organic/Specialty Source, Inc. and related affiliates (collectively “Global Organic”) through ourwholly owned subsidiary Albert’s Organics, Inc. (“Albert’s”), in a cash transaction for approximately $20.6 million. Nor-Cal is a distributor of conventional and organic produceand other fresh products primarily to independent retailers in Northern California, with primary operations located in West Sacramento, California. Global Organic is a distributorof organic fruits, vegetables, juices, milk, eggs, nuts, and coffee located in Sarasota, Florida serving customer locations across the southeastern United States.

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Wholesale

We organize and operate our Wholesale reportable segment through four U.S. geographic regions: Atlantic, South, Central and Pacific; each of which is led by separate regionpresidents responsible for product and service strategy, execution, and financial results; and Canada Wholesale which is operated separately from the U.S. Wholesale business. Productand service categories include, grocery, fresh, wellness, private brands, e-commerce, food service and multi-cultural. This operating structure includes regional sales organizations anddistribution center networks, which offer a combination of conventional and natural products to our customers as a consolidated supply solution. Territory managers in these regions sellacross our complete lines of products, which brings us to our customers more frequently with all of our service offerings allowing us to anticipate and identify sales opportunities thatresult from our customers having a single point of contact for all of our products and services.

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 fastturn groceries, perishables, general merchandise and home, health and beauty care products. For financial reporting purposes, sales from our distribution centers to our own Retail storesare eliminated from of our Wholesale segment within Eliminations.

We offer Wholesale customers a wide variety of food and non-food products, and our own extensive 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 optimize our facilities to implement leading warehouse technology, ranging from radio-frequencydevices guiding selectors to mechanized facilities with completely automated order selection for dry groceries that help us deliver aisle-ready pallets to Wholesale customers. OurWholesale segment also focuses on improving our supply chain to achieve labor and cost efficiencies.

To maintain our market position and improve our operating efficiencies, we seek to continually:• expand our marketing and customer service programs across regions;• expand our national purchasing opportunities;• offer a broader product selection than our competitors;• offer operational excellence with high service levels and a higher percentage of on-time deliveries than our competitors;• centralize general and administrative functions to reduce expenses;• consolidate systems applications among physical locations and regions;• invest in our people, facilities, equipment and technology; and• reduce the geographic overlap between regions.

Retail

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, andpharmacy. We offer national and regional brands as well as our own private label products. Depending on the banner, a typical Retail store carries approximately 17,000 to 21,000 corestock-keeping units (“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 themarkets in which they operate. Our Retail continuing operations are supplied by our distribution centers, which also supply our Wholesale customers.

Our Retail segment includes 71 Cub Foods and Shoppers retail grocery stores acquired in the Supervalu acquisition. Prior to the fourth quarter of fiscal 2020 and since the Supervaluacquisition, we had presented these stores within discontinued operations. During the fourth quarter of fiscal 2020, we determined we no longer met the held for sale criterion for aprobable sale to be completed within 12 months for the Cub Foods business and the majority of the remaining Shoppers locations. As a result, our Consolidated Financial Statementsand financial information presented within this Annual Report on Form 10-K reflect the Retail segment operations of Cub Foods and certain Shoppers stores within continuingoperations, with prior periods having been revised to conform with the current period presentation.

Throughout this Annual Report on Form 10-K references to Retail exclude previously disposed Shoppers stores, five Shoppers stores that are held for sale, and the Hornbacher’s, Shop‘n Save and Shop ‘n Save East retail banners, all of which we acquired as a result of the Supervalu acquisition and previously disposed. The results of these businesses continue to bepresented as discontinued operations.

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Our Products and Services

Our Product Offering

Our extensive selection of products includes natural, organic, specialty, produce, and conventional grocery, and non-food products. We offer nationally advertised brand name andprivate-label products, including grocery (both perishable and nonperishable), general merchandise, home, health and beauty care, and pharmacy, which are sold through our Wholesalesegment to wholesale customers and our Retail stores to shoppers. We offer six main product categories: grocery and general merchandise; produce; perishables and frozen foods;nutritional supplements and sports nutrition; bulk and foodservice products; and personal care items.

Our private-label products include: the premium brand CULINARY CIRCLE®, which offers premium quality products in highly competitive categories; WILD HARVEST® and FieldDay®, which include organic, non-GMO and items free from over 140 undesirable ingredients; core brands ESSENTIAL EVERYDAY®, EQUALINE®, SPRINGFIELD®, andcategory-specific brands ARCTIC SHORES SEAFOOD COMPANY®, BABY BASICS®, STONE RIDGE CREAMERY® and SUPER CHILL®, which provide national brandequivalent products at a competitive price; and the value brand SHOPPERS VALUE®, which offers the budget conscious consumer quality alternatives to national brands at substantialsavings.

Manufacturing and Natural Branded Products Businesses

Our Blue Marble Brands portfolio is a collection of 16 organic, non-GMO, clean and specialty food brands representing more than 700 unique retail and food service products sourcedfrom 29 countries around the globe. Blue Marble Brands defines clean ingredients to be minimally processed foods, using only essential ingredients that contain no artificial colors orflavors. Our Blue Marble Brands products are sold through our Wholesale segment, third-party distributors and directly to retailers. Our Field Day® brand is primarily sold to customersin our independent channel and is meant to serve as a private label brand for retailers to allow them to compete with supermarket and supernatural chains which often have their ownprivate label store brands.

Our subsidiary doing business as Woodstock Farms Manufacturing specializes in importing, roasting, packaging and distributing nuts, dried fruit, seeds, trail mixes, granola, natural andorganic snack items and confections for our customers and in the Company’s branded products. Woodstock Farms Manufacturing sells items manufactured in bulk and through privatelabel packaging arrangements with large health food, supermarket and convenience store chains and independent retailers.

We operate an organic (United States Department of Agriculture (“USDA”) and Quality Assurance International (“QAI”)) and kosher (Circle K) certified packaging, roasting, andprocessing facility in New Jersey that is SQF (Safety Quality Food) level 2 certified.

Our Professional Services Offerings

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 whichvendors provide services directly to our Wholesale customers, as well as services and solutions we develop and provide directly. Our services include retail store support, advertising,couponing, e-commerce, network and data hosting solutions, 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 supportsuppliers in understanding our markets. Trade and consumer marketing programs are supplier-sponsored programs that cater to a broad range of retail formats. These programs aredesigned 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.Set forth below are the services offered by each of these programs:

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Consumer Marketing Programs• Monthly, region-specific, consumer circular programs, with the participating retailers’ imprint featuring products sold by the retailer to its customers. We offer circular programs

to our customers and vendors through negotiated pricing for the retailer, and also provide retailers with a physical flyer and shelf tags corresponding to each month’s promotions.We also offer a web-based tool, which retailers can use to produce highly customized circulars and other marketing materials for their stores called the Customized MarketingProgram.

• Truck advertising programs allow our suppliers to purchase advertising space on the sides of our hundreds of trailers traveling throughout the United States and Canada,increasing brand exposure to consumers.

• Web and digital marketing services including websites, mobile applications, and e-commerce capabilities.

Trade Marketing Programs• New item introduction programs showcase a supplier’s new items to retailers through trials and discounts.• Customer Portal Advertising allows our suppliers to advertise directly to retailers using the portal that many retailers use to order product and/or gather product information.• Foodservice options designed to support accounts in that category.• Monthly specials catalogs that highlight promotions and new product introductions.• Specialized catalogs for holiday and seasonal products.

Supplier Marketing Programs• ClearVue®, an information sharing program offered to a select group of suppliers designed to improve the transparency of information and drive efficiency within the supply

chain. With the availability of in-depth data and tailored reporting tools, participants are able to reduce inventory balances while improving service levels.• Supply Chain by ClearVue®, an information sharing program designed to provide heightened transparency to suppliers through demand planning, forecasting and procurement

insights. This program offers weekly and monthly reporting, enabling suppliers to identify areas of sales growth while pinpointing specific opportunities for achieving greaterprofits.

• Supplier-In-Site (SIS), an information-sharing website that helps our suppliers better understand our Wholesale customers in order to generate mutually beneficial incrementalsales in an efficient manner.

• Growth incentive programs, supplier-focused high-level sales and marketing support for selected brands, which foster our partnership by building incremental, mutuallyprofitable sales for suppliers and us.

Periodically, we conduct focus group sessions with certain key retailers and suppliers to ascertain their needs and allow us to better service them. We also provide our customers with:• 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 planning and setting up product displays;• shelf tags for products; and• a robust customer portal with product information, search and ordering capabilities, reports and publications.

Organic Certification

Our “Certified Organic Distributor” certification covers all of our natural distribution centers in the United States, except for facilities acquired in connection with the acquisitions ofTony’s, Haddon, and Nor-Cal. Although not designated as a “Certified Organic Distributor” by QAI, the three Tony’s California locations are certified as Organic by the State ofCalifornia Department of Public Health Food and Drug Branch, and Nor-Cal is currently registered with the California Department of Food and Agriculture Organic Program as anorganic handler. In addition, our three Canadian distribution centers in British Columbia and Ontario each hold one of the following organic distributor certifications: QAI, EcoCertCanada or ProCert Canada.

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-partyagency. We maintain current certification affidavits on most organic commodities and produce in order to verify the authenticity of the product. Most potential suppliers of organicproducts are required to provide such third-party certifications to us before they are approved as suppliers.

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Working Capital

Normal operating fluctuations in working capital balances can result in changes to cash flow from operations presented in our Consolidated Statements of Cash Flows that are notnecessarily indicative of long-term operating trends. Our working capital needs are generally greater during the months leading up to high sales periods, such as the build up in inventoryduring the time period leading to the calendar year-end holidays. We typically finance these working capital needs with funds provided by operating activities and available creditthrough our revolving credit facility. In fiscal 2020, we experienced significant changes in our inventory, accounts payable and accounts receivable as a result of the customer behaviorresponses to the spread of COVID-19 and economic impacts in the second half of fiscal 2020. Our working capital levels have since stabilized to meet the higher levels of demand, andwe expect our working capital to fluctuate with any macroeconomic impacts and changes in food-at-home purchasing levels.

Our Suppliers

We purchase our products from more than 11,000 suppliers. The majority of our suppliers are based in the United States and Canada, but we also source products from suppliersthroughout Europe, Asia, Central America, South America, Africa and Australia. We believe suppliers of conventional, natural and organic products seek to distribute their productsthrough 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 ofmarketing programs to our customers to help sell the suppliers’ products. Substantially all product categories that we distribute are available from a number of suppliers and, therefore,we are not dependent on any single source of supply for any product category. In addition, although we have exclusive distribution arrangements and support programs with severalsuppliers, none of our suppliers accounted for more than 5% of our total purchases in fiscal 2020.

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 pricingor 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 certain periodof 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 inour company-wide purchasing programs.

Our Distribution Systems

The sites for our distribution centers are chosen to provide direct access to our regional markets. This proximity allows us to reduce our transportation costs relative to those of ourcompetitors that seek to service these customers from locations that are often much further away. We believe that we incur lower inbound freight expense than our regional competitorsbecause 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 trucks, contract carriers andthe suppliers themselves. When financially advantageous, we pick up product from suppliers or satellite staging facilities and return it to our distribution centers using our own trucks.Additionally, we generally can redistribute overstocks and inventory imbalances between our distribution centers if needed, which helps to reduce out-of-stocks and to sell perishableproducts prior to their expiration date.

The majority of our trucks are leased from a variety of national banks and are maintained by third-party national leasing companies, which in some cases maintain facilities on ourpremises 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 continentalUnited States and Canada are typically shipped by freight-forwarders through ocean-going containers.

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Our Focus on Technology

We have made significant investments in distribution, financial, information and warehouse management systems. We continually evaluate and upgrade our management informationsystems at our regional operations in an effort to make the systems more efficient, cost-effective and responsive to customer needs. These systems include functionality in radiofrequency inventory control, pick-to-voice systems, pick-to-light systems, computer-assisted order processing and slot locater/retrieval assignment systems. At most of our receivingdocks, warehouse associates attach computer-generated, preprinted locater tags to inbound products. These tags contain the expiration date, locations, quantity, lot number and otherinformation about the products in bar code format. Customer returns are processed by scanning the UPC bar codes. We also employ a management information system that enables us tolower our inbound transportation costs by making optimum use of our own fleet of trucks or by consolidating deliveries into full truckloads. Orders from multiple suppliers and multipledistribution centers are consolidated into single truckloads for efficient use of available vehicle capacity. In addition, we utilize route efficiency software that assists us in developing themost efficient routes for our outbound trucks. As part of our “one company” approach, we are in the process of converting to a single national warehouse management and procurementsystem to integrate our existing facilities, including acquired Supervalu facilities, onto one nationalized platform across the organization. We continue to focus on the automation of ournew or expanded distribution centers that are at different stages of construction and implementation. These steps and others are intended to promote operational efficiencies and improveoperating expenses as a percentage of net sales.

Competition

The food distribution industry and the retail food industry are highly competitive. Our largest competition comes from direct distribution, whereby a customer reaches a product volumelevel that justifies distribution directly from the manufacturer in order to obtain a lower price. We compete on the basis of price, quality, assortment, schedule and reliability of deliveriesand services, value-added services, service fees and distribution facility locations. We compete in the United States and Canada with numerous national, regional, and local distributorsof grocery and non-grocery consumable products. We also face indirect competition through our customers and direct competition in our retail stores from alternative methods of fooddistribution, such as internet-based retailers, non-traditional retailers, discount supermarket chains, supercenters, membership warehouse clubs, dollar stores and meal-delivery services.

The strategic acquisition of Supervalu provided us with greater scale, a broader product assortment, and a suite of professional services that enhance our ability to compete. In recentyears consolidation within the grocery industry has resulted in, and is expected to continue to result in, increased competition, including from some competitors that have greaterfinancial, marketing and other resources than us.

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 andDrug Administration (the “FDA”), which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation. In theUnited 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 implementthese 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 chainand, among other things, impose additional regulations focused on prevention of food contamination, more frequent inspection of high-risk facilities, increased record-keeping, andimproved 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 torecall.

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

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Many of 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 resourcesand 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 otherpetroleum 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 vehiclemaintenance. Our policy is to comply with all applicable environmental and safety legal requirements. We are subject to other federal, state, provincial and local provisions relating tothe protection of the environment or the discharge of materials; however, these provisions do not materially impact the use or operation of our facilities.

Employees

As of August 1, 2020, we had approximately 28,300 full and part-time employees within continuing operations, 11,800 of whom (approximately 42%) are covered by 51 collectivebargaining 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 ofsimilar efforts in the future.

Seasonality

Generally, we do not experience any material seasonality. However, our sales and operating results may vary significantly from quarter to quarter due to factors such as changes in ouroperating expenses, management’s ability to execute our operating and growth strategies, demand for our products, supply shortages and general economic conditions.

Available Information

Our internet address is http://www.unfi.com. The contents of our website are not part of this Annual Report, and our internet address is included in this document as an inactive textualreference 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 toSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) available free of charge through our website as soon as reasonably practicable after wefile 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. Thissection discusses factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. If any of the eventsdescribed below occurs, our business, financial condition or results of operations could be materially adversely affected and our stock price could decline.

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 itis 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 toour business. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Statements for more information on our businessand the forward-looking statements included in this Annual Report.

Strategic and Operational Risks

We depend heavily on our principal customers and our success is heavily dependent on our principal customers’ ability to maintain and grow their business.

Whole Foods Market, a subsidiary of Amazon.com, Inc., accounted for approximately 18% of our net sales in fiscal 2020. We serve as the primary distributor of natural, organic, andspecialty non-perishable products, and also distribute certain specialty protein, cheese, deli items, and products from health, beauty, and supplement categories to Whole Foods Marketin all of its regions in the United States under the terms of our distribution agreement, which expires on September 28, 2025. Our ability to maintain a close, mutually beneficialrelationship with Whole Foods Market is an important element to our continued growth.

The loss or cancellation of business from Whole Foods Market, including from increased self-distribution to its own facilities, closures of its stores, reductions in the amount of productsthat Whole Foods Market sells to its customers, or our failure to comply with the terms of our distribution agreement with Whole Foods Market could materially and adversely affect ourbusiness, financial condition, or results of operations. Similarly, if Whole Foods Market is not able to grow its business, including as a result of a reduction in the level of discretionaryspending by its customers or competition from other retailers, or if Whole Foods Market diverts purchases from us beyond minimum amounts it is required to purchase under ourdistribution agreement, our business,

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financial condition, or results of operations may be materially and adversely affected. Additionally, given the continued growth in sales to Whole Foods Market that we haveexperienced since fiscal 2018, if Whole Foods Market were to only purchase the minimum purchase amounts under our agreement with them, it would negatively impact our financialresults.

In addition to our dependence on Whole Foods Market, we are also dependent upon sales to our supermarket customers for both natural and conventional products. To the extent thatcustomers in this group make decisions to utilize alternative sources of products, whether through other distributors or through self-distribution, our business, financial condition orresults of operations may be materially and adversely affected.

Our business is a low margin business and our profit margins may decrease due to intense competition and consolidation in the grocery industry.

The grocery industry is characterized by relatively high volume of sales with relatively low profit margins, and as competition in certain areas intensifies and the industry continues toconsolidate, our results of operations may be negatively impacted through a loss of sales and reductions in gross margins. The grocery business is intensely competitive, and the recentand ongoing consolidation within the grocery industry is expected to result in increased competition, including from some competitors that have greater financial, marketing, and otherresources than we do. Consumers also have more choices for conventional grocery purchases, including independent retailers we do not supply and e-commerce solutions, whichreduces the demand for products supplied by our wholesale customers. 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. Bidding for contracts or arrangements withcustomers or potential customers, particularly within the supernatural and supermarkets channels, is highly competitive. Our competition comes from a variety of sources, includingother distributors of natural and conventional products, as well as specialty or independent grocery and mass market grocery distributors and retail customers that have their owndistribution channels. Mass market grocery distributors in recent years have increased their emphasis on natural and organic products and are now competing more directly with ournatural and organic product offerings, which are generally higher margin than conventional product offerings. The higher margin on natural and organic product offerings could beaffected 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 of particular items that we sell or have increased their purchases of particular items that we sell directly fromsuppliers. New competitors are also entering our markets as barriers to entry for new competitors are relatively low. For example, more natural and organic products are being sold inconvenience stores and other mass market retailers and online through e-commerce than was the case a few years ago, and many of these customers are being serviced by otherconventional distributors or are self-distributing. Some of the mass market grocery distributors with whom we compete may have substantially greater financial and other resources thanwe have and may be better established in their markets. We also face indirect competition as a result of the fact that our customers with physical locations face competition from onlineretailers and distributors that seek to sell certain of the type of products we sell to our customers directly to consumers. We cannot assure you that our current or potential competitorswill 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 isalso possible that alliances among competitors may develop and that competitors may rapidly acquire significant market share or that certain of our customers will increase self-distribution to their own retail facilities. Increased competition may result in price reductions, reduced gross margins, lost business and loss of market share, any of which couldmaterially and adversely affect our business, financial condition, or results of operations.

The continuing consolidation of retailers in the natural products industry, the growth of supernatural chains, and increased closures of conventional grocery locations may reduce ourprofit margins in the future as more customers qualify for greater volume discounts, and as we experience pricing pressures from suppliers and retailers. For example, in fiscal 2020, wewere negatively impacted by the consolidation in the natural products industry with bankruptcies of three of our natural retailer customers. In addition, while natural product retailershave performed well through the COVID-19 pandemic, there is no assurance that increased volume at these customers will be sustained over the long-term. Sales to chain customersgenerate a lower gross margin than do sales to our independents channel customers. Many of these customers, including our largest customer, have agreements with us that includevolume discounts. As the amounts these customers purchase from us increase, the price that they pay for the products they purchase is reduced, putting downward pressure on our grossmargins on these sales. To compensate for these lower gross margins, we must increase the dollar value of products we sell or reduce the expenses we incur to service these customers.If we are unable to reduce our expenses as a percentage of net sales, including our expenses related to servicing this lower gross margin business, our business, financial condition, orresults of operations could be materially and adversely impacted.

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We are transforming our business and have engaged, and may continue to engage in, acquisitions and divestitures and other strategic initiatives, and may encounter difficultiesintegrating acquired businesses or divesting businesses or assets and may not realize the anticipated benefits of our acquisitions and divestitures, including, in particular, ouracquisition of Supervalu.

We have engaged in, and could potentially continue to pursue, strategic transactions and initiatives as we transform our business. Acquisitions and divestitures present significantchallenges and risks relating to the integration of acquired businesses and the separation of divested businesses.

On October 22, 2018, we acquired Supervalu, a complex business that was in the process of integrating two recently acquired substantial businesses. On June 23, 2017, Supervaluacquired Unified Grocers, Inc. (“Unified”), a retailer-owned cooperative focused on wholesale grocery and specialty distribution on the West Coast of the United States. On December8, 2017, Supervalu acquired Associated Grocers of Florida, Inc. (“AG Florida”), a retailer-owned cooperative that distributes full lines of grocery and general merchandise toindependent retailers, located primarily in South Florida, the Caribbean, Central and South America and Asia. The processes of integrating Supervalu, Unified and AG Florida may bedisruptive to our business operations and may distract our management team from their day-to-day responsibilities. There can also be no assurance that we will be able to successfullycomplete the integration of Supervalu, Unified, and AG Florida to achieve the operational efficiencies, including synergistic and other benefits of the acquisitions.

Our ability to achieve the expected benefits of acquisitions, and in particular the Supervalu acquisition, will depend on, among other things, our ability to effectively execute on ourbusiness strategies, retain customers and suppliers on terms similar to those in place with the acquired businesses, achieve desired operating efficiencies and sales growth, optimizedelivery 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 benefitsof acquisitions also depends on the adequacy of our implementation plans and the ability of management to oversee and operate effectively the combined operations.

To realize the anticipated benefits of the Supervalu acquisition, our business must be successfully combined with Supervalu. We could fail to realize the anticipated benefits for a varietyof reasons, including failure to leverage the increased scale of the combined company quickly and effectively, difficulties integrating information technology systems, failure toeffectively coordinate sales, procurement, and marketing efforts to communicate the capabilities of the combined company, and failure to execute an efficient integrated distributionnetwork incorporating our spectrum of product offerings.

The integration of Supervalu and other businesses that we have acquired might also cause us to incur unforeseen costs, which would lower our future earnings and would prevent usfrom realizing the expected benefits of these acquisitions. Any of the businesses we acquired may also have liabilities or adverse operating issues, including some that were notdiscovered before the acquisition, and our indemnity for such liabilities may also be limited or nonexistent. The integration process could divert the attention of management andtemporarily redirect resources primarily focused on reducing product cost and operating expenses, resulting in lower gross profits in relation to sales. In addition, the process ofcombining our company with Supervalu could cause interruption or loss of momentum in the activities of the respective businesses, which could have a material adverse effect on thecombined operations.

Additionally, our ability to make any future acquisitions may depend upon obtaining additional financing. We may not be able to obtain additional financing on acceptable terms or atall. 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 tocomplete acquisitions. Failure to achieve the anticipated benefits of acquisitions could result in decreases in the amount of expected revenues and diversion of management’s time andenergy. Therefore, future acquisitions, if any, could materially and adversely impact our business, financial condition, or operating results including, ultimately, a reduction in our stockprice, particularly in periods immediately following the consummation of those transactions while the operations of the acquired business are being integrated with our operations.

We have announced our intention to divest Supervalu’s retail grocery businesses in an efficient and economic manner. There can be no assurance that we will be able to (i) identifybuyers for the retail business of Supervalu on favorable terms or at all, (ii) effectively retain employees and conduct business at the stores within the retail business while we seek toidentify buyers for these operations, or (iii) effectively minimize liabilities and stranded costs associated with the disposal of these operations, including surplus property andmanagement of remaining obligations under real estate leases. If we are unable to divest Supervalu’s retail grocery business or realize fewer net proceeds from the divesture than weanticipate, we may not be able to reduce our indebtedness as planned and will incur higher interests costs as a result. Our failure to efficiently or competitively operate our retail grocerybusiness in the interim may negatively impact the amount of net proceeds we receive from the divestiture. Our inability to complete

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or realize the projected benefits of planned and/or future divestitures could have a material adverse effect on our business, financial condition, or results of operations.

We may have difficulty managing our growth.

The growth in the size of our business and operations has placed, and is expected to continue to place, a significant strain on our management. Our future growth may be limited bystrong 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 integrateacquired entities or significant new customers, implement information systems initiatives, or adequately manage our personnel.

We have substantially expanded our distribution center network through the acquisition of Supervalu. If we fail to optimize the volume of supply operations in our distribution centernetwork or do not retain existing business, excess capacity may be created. Any excess capacity may create inefficiencies and adversely affect our business, financial condition, orresults of operations, including as a result of incurring operating costs for these facilities while the volume of products supplied from these facilities is insufficient to cover these costs.

We cannot assure you that we will be able to successfully optimize our distribution center network or open new distribution centers in new or existing markets if needed toaccommodate or facilitate growth or that certain of our distribution centers will not have, or continue to have, operational challenges. Our ability to compete effectively and to managefuture 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 thatour existing personnel, systems, procedures and controls will be adequate to support the future growth of our operations. Our inability to manage our growth effectively could have amaterial adverse effect on our business, financial condition, or results of operations.

Our future growth is limited in part by the size and location of our distribution centers. As we near maximum utilization of a given facility or maximize our processing capacity,operations may be constrained and inefficiencies have been and may be created, which could adversely affect our business, financial condition or results of operations unless the facilityis expanded, volume is shifted to another facility, or additional processing capacity is added.

Our inability to maintain or increase our operating margins could adversely affect our results of operations and the price of our stock.

As competition increases, the grocery industry consolidates, macro challenges in grocery demand become more pronounced, and we attempt to affiliate larger wholesale customers, weexpect to continue to face pressure on our operating margins. If we are not able to continue to capture scale efficiencies and enhance our merchandise offerings, if we are not able toachieve our targeted synergies for our acquisition of Supervalu and Supervalu’s acquisitions of Unified and AG Florida, or if we are not able to reduce our costs as we divest certain ofour retail operations, we may not be able to achieve our goals with respect to operating margins. In addition, if we do not refine and improve our systems continually or if we are unableto effectively improve our systems without disruption, including any information technology migration to a cloud environment, we may not be able to reduce costs, increase sales andservices, effectively manage inventory and procurement processes, or effectively manage customer pricing plans. As a result, our operating margins may stagnate or decline, whichcould adversely affect the price of our common stock.

Our wholesale distribution business could be adversely affected if we are not able to affiliate new customers, increase sales to existing customers or retain existing customers, or if ourwholesale customers fail to perform.

The profitability of our wholesale segment is dependent upon sufficient volume to support our operating infrastructure, which is dependent on our ability to attract new customers,increase sales to existing customers, and retain existing customers. The inability to attract new customers or the loss of existing customers to a competing wholesaler or due to retailclosure, vertical integration by an existing customer converting to self-distribution, or industry consolidation may negatively impact our sales and operating margins.

Our success also depends in part on the financial success and cooperation of our wholesale customers. These wholesale customers manage their businesses independently and, therefore,are responsible for the day-to-day operation of their stores. They may not experience an acceptable level of sales or profitability, and our revenues and gross margins could be negativelyaffected as a result. We may also need to extend credit to our wholesale customers, including through loans, market support or guarantees. While we seek to obtain security interests andother 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 enteredinto wholesale customer support arrangements to guaranty or subsidize real estate obligations, which make us contingently liable in the event our wholesale customers default.

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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 reducedpayments 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, aswell 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, andcompetition that our retail segment faces. The magnitude of these risks increases as the size of our wholesale customers increases.

Many of our customers are not obligated to continue purchasing products from us and larger customers that do have multiyear contracts with us may terminate these contracts early incertain situations or choose not to renew or extend the contract at its 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 thepurchase of products. We cannot assure you that these customers will maintain or increase their sales volumes or orders for the products supplied by us or that we will be able tomaintain or add to our existing customer base. Decreases in our volumes or orders for products supplied by us for these customers with whom we do not have a long-term contract mayhave 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 conventional supermarket customers and our supernatural chain customer) that obligate thecustomer 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 amount of products from us or thecontracts 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 performunder 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 at historical purchase levels, itmay 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 adjustour facilities and staffing costs to cover the reduction in net sales.

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.

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. Recently, we haveexperienced 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 furtherreductions 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 recently we have experienced a higher than anticipated level of vendor out-of-stocks, which may expose us to reduced fill rates with our customers, resulting in higher costs, fees, or penalties, and therefore lower margins. We have no assurances of continuedsupply, pricing, or access to new products and any supplier could at any time change the terms upon which it sells to us or discontinue selling to us.

The majority of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout Europe, Asia, Central America, South America, Africaand Australia. 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 benefitswhen dealing with suppliers, suppliers may not provide the products needed by us in the quantities and at the prices requested. For example, we have experienced, and continue toexperience, higher than usual levels of out-of-stocks leading to reduced fill rates during the COVID-19 pandemic. We are also subject to delays caused by interruption in production andincreases in product costs based on conditions outside of our control. These conditions include work slowdowns, work interruptions, strikes or other job actions by employees ofsuppliers, short-term weather conditions or more prolonged climate change, crop conditions, product recalls, water shortages, transportation interruptions, unavailability of fuel orincreases in fuel costs, competitive demands, raw material shortages, and natural disasters or other catastrophic events (including, but not limited to food-borne illnesses). As demand fornatural and organic products has increased and the distribution channels into which these products are sold have expanded, we have continued to experience higher levels ofmanufacturer out-of-stocks, and to a lesser degree, we also experience out-of-stocks on certain conventional products. These shortages have caused us to incur higher operating expensesdue to the cost of moving products around and between our distribution facilities in order to keep our service level high. We cannot be sure when this trend will end or whether it willrecur during future years. As the consumer demand for natural and organic products has increased, certain retailers and other producers have entered the market and attempted to buycertain raw materials directly, limiting their availability to be used in certain supplier products. In addition, increased tariffs on imported goods, and any retaliatory actions by affectedcountries, may result in an increased in our costs for goods imported into the United States, and may reduce customer demand for affected products if the parties having to pay thosetariffs increase their prices.

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Further, increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products, includingthe specialty protein and cheese products sold by Tony’s. For example, in the past, weather patterns have at times resulted in lower than normal levels of precipitation in key agriculturalstates, such as California, impacting the price of water and corresponding prices of food products grown in states facing drought conditions. The impact of sustained droughts isuncertain and could result in volatile input costs. Input costs could increase at any point in time for a large portion of the products that we sell for a prolonged period. Conversely, inyears where rainfall levels are abundant product costs, particularly in our perishable and produce businesses, may decline and the results of this product cost deflation could negativelyimpact 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 tocustomers, and customers may turn to other distributors. In that case, our business, financial condition or results of operations could be materially and adversely affected.

We have experienced losses due to the uncollectability of accounts and notes receivable in the past and could experience increases in such losses in the future if our customers areunable 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 significantfinancial 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. Itis possible that customers may reject their contractual obligations to us under bankruptcy laws or otherwise. Significant customer bankruptcies could further adversely affect ourrevenues and increase our operating expenses by requiring larger provisions for bad debt. For example, we incurred significant bad debt expense in the second quarter of fiscal 2020 as aresult of three customer bankruptcies. In addition, even when our contracts with these customers are not rejected, if customers are unable to meet their obligations on a timely basis, itcould 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 independents channel customers, may be impacted more severely and more quickly thanlarger businesses. Similarly, these smaller businesses may be more likely to be more severely impacted by events outside of their control, like significant weather events. Consequently,the ability of such businesses to repay their obligations to us may deteriorate, and in some cases this deterioration may occur quickly, which could materially and adversely impact ourbusiness, financial condition, or results of operations.

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

As of August 1, 2020, approximately 11,800 of our 28,300 employees (approximately 42%) were covered by 51 collective bargaining agreements, including agreements undernegotiation, which expire through August 2026, including 37 collective bargaining agreements assumed in our acquisition of Supervalu. If we are not able to renew these agreements orare required to make significant changes to these agreements that are unfavorable to us, our relationship with these employees may become fractured, work stoppages could occur or wemay incur additional expenses which 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. Additionally, the terms of some legacy Supervalu collective bargaining agreementsmay limit our ability to increase efficiencies, while the threat of labor disruption is greater due to the larger number of represented locations.

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-organizingefforts. New contracts with existing unions could have substantially less favorable terms than prior to such expanded union-organizing efforts. In the event we are unable to negotiatecontract renewals with our union associates, we could be subject to work stoppages. In that event, it would be necessary for us to hire replacement workers to continue to meet ourobligations to our customers. The costs to hire replacement workers and employ effective security measures could negatively impact the profitability of any affected facility. Dependingon the length of time that we are required to employ replacement workers and security measures these costs could be significant and could have a material adverse effect on ourbusiness, financial condition, or results of operations.

We are subject to a wide range of labor costs. Because our labor costs are, as a percentage of net sales, higher than in many other industries, we may be significantly harmed by laborcost increases. 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 inminimum wage requirements, could reduce the profitability of our customers and reduce demand for the products we supply.

Additionally, we risk a shortage of qualified labor. Recruiting and retention efforts, and actions to increase productivity, may not be successful, and we could encounter a shortage ofqualified labor in the future. Such a shortage could potentially increase labor

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costs, reduce profitability or decrease our ability to effectively serve customers. We are undertaking efforts to automate certain functions of our business. If we are unable to realize theanticipated benefits of our efforts to improve labor efficiency through automation or to increase productivity and efficiency through other methods, including as a result of delays inexecuting our business transformation and integration efforts, we may be more susceptible to labor shortages than our competitors.

Disruptions to our or third-party information technology systems, including cyber-attacks and security breaches, and the costs of maintaining secure and effective informationtechnology 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, ourbusinesses increasingly involve the receipt, storage and transmission of sensitive data, including personal information about our customers, employees, and vendors and our proprietarybusiness information. We also share information with vendors. Information systems are vulnerable to not functioning as designed and to disruptions and security breaches by computerhackers and cyber terrorists.

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 securitybreaches 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, sophisticatedand 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 anythird-party systems used by us could have a material adverse impact on our business, financial condition, or results of operations. We could also lose credibility with our customers andsuffer damage to our reputation and future sales, including through negative publicity and social media. In addition, the unavailability of the information systems or failure of thesesystems or software to perform as anticipated for any reason and any inability to respond to, or recover from, such an event, could disrupt our business, impact our customers and couldresult 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 ofcardholder data. PCI DSS contains compliance guidelines and standards with regard to our security surrounding the physical and electronic storage, processing and transmission ofindividual cardholder data. By accepting debit cards for payment, we are also subject to compliance with American National Standards Institute data encryption standards and paymentnetwork security operating guidelines. The cost of complying with stricter privacy and information security laws, standards and guidelines, including evolving PCI DSS standards, anddeveloping, maintaining, and upgrading technology systems to address future advances in technology, could be significant and we could experience problems and interruptionsassociated 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 accepting Europay, MasterCard and Visa (EMV) transactions, could have a material adverse impact on ourbusiness, financial condition, or results of operations.

Our business strategy of increasing our sales of fresh, perishable items, which we accelerated with our acquisition of Supervalu and our prior acquisitions of Tony’s, Global Organicand Nor-Cal, may not produce the results that we expect.

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 that aretypically found in the perimeter of our customers’ stores, in addition to the products we have historically distributed, will differentiate us from our competitors and increase demand forour products. We accelerated this strategy with our acquisition of Supervalu and, before that, our acquisitions of Tony’s, Global Organic/Specialty Source, Inc. and related affiliates, andNor-Cal. 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 andadversely affected, or we may not be able to fully realize the benefits of the Supervalu acquisition.

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 health, defined benefit pension, defined contribution, and, in certain cases, postretirement benefits to many of our employees and, in some cases, former employees and thecosts of such benefits continue to increase. The amount of any increase depends on a number of different factors, many of which are beyond our control. These factors includegovernmental 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 ofcoverage, reporting and other requirements; return on assets held in plans; changes in actuarial valuations, estimates, assumptions or calculations used to determine our benefitobligations 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 therates

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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 potentialchanges 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 ourfinancial condition and results of operations.

Additionally, Company-sponsored plans and multiemployer pension plans are underfunded with the projected benefit obligations exceeding the fair value of those plans’ assets, incertain cases (for example, Central States Pension Plan), by a wide margin. Withdrawal liabilities from multiemployer plans could be material, and potential exposure to withdrawalliabilities 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 fundingimprovement 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. We expect thatincreases of unfunded liabilities of these plans would result in increased future payments by us and the other participating employers over the next few years. Any changes to ourpension 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 theseplans. A significant increase to funding requirements could adversely affect our financial condition, results of operations, or cash flows. The financial condition of these pension plansmay also negatively impact our debt ratings, which may increase the cost of borrowing or adversely affect our ability to access financial markets.

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 ourbusiness, and we may not realize the anticipated benefits of our recent 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 andother technology systems, among other things, to receive, generate and select orders, to load and route trucks and to monitor and manage our business on a day-to-day basis. Failure tohave adequate computer systems across the enterprise and any disruption to these computer 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 and increase operating efficiencies, we have invested in the development and implementation of new information technology. We are in theprocess of rolling out a national warehouse management and procurement system to convert our existing facilities into a single warehouse management and supply chain platform. Inlight of the acquisition of Supervalu, we are reevaluating our warehouse management system strategy. However, we currently plan to remain focused on the automation of our new orexpanded distribution centers that are at different stages of construction. We may not be able to implement these technological changes in the time frame that we have planned anddelays in implementation (including delays resulting from the integration of Supervalu) could negatively impact our business, financial condition or results of operations. In addition, thecosts to make these changes may exceed our estimates and will exceed the benefits during the early stages of implementation. Even if we are able to implement the changes inaccordance with our current plans, and within our current cost estimates, we may not be able to achieve the expected efficiencies and cost savings from this investment, which couldhave a material adverse effect on our business, financial condition, or results of operations. Moreover, as we implement information technology enhancements, disruptions in ourbusiness may be created (including disruption with our customers), which may have a material adverse effect on our business, financial condition, or results of operations.

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 aretypes 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 adverseeffect 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.

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 ofvariability. Among the causes of this variability are changes in benefit levels, medical fee schedules, medical utilization guidelines, severity of injuries and accidents, vocationrehabilitation and apportionment and unpredictable external factors affecting inflation rates, discount rates, rising healthcare costs, litigation trends, legal interpretations, and actualclaim 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 financialstatements. 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, financialcondition, or results of operations.

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Impairment charges for goodwill or other 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 and equipment, and evaluate their carrying value for impairment whenever events or changes in circumstancesindicate that the carrying amount of such assets may not be fully recoverable. We annually review goodwill to determine if impairment has occurred. Additionally, interim reviews areperformed whenever events or changes in circumstances indicate that impairment may have occurred. If the testing performed indicates that impairment has occurred, we are required torecord a non-cash impairment charge for the difference between the carrying value and fair value of the long-lived assets or the carrying value and fair value of the reporting unit, in theperiod 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 futurerevenue, profitability, cash flows, fair value of assets and liabilities, weighted average cost of capital, as well as other assumptions. Changes in these estimates, or changes in actualperformance compared with these estimates, may affect the fair value of long-lived assets or reporting unit, which may result in an impairment charge.

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

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 $2,100 million asset-based revolving credit facility (the “ABL Credit Facility”) enteredinto on August 30, 2018, as amended, and the term loan agreement (the “Term Loan Agreement”) related to our $1,950.0 million term loan facility (the “Term Loan Facility”) enteredinto in October 2018, contain financial covenants and other restrictions that limit our operating flexibility and limit 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 difficultfor us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.

In addition, our ABL Loan Agreement and Term Loan Agreement require that we comply with various financial tests and impose certain restrictions on us, including among otherthings, restrictions on our ability to incur additional indebtedness, create liens on assets, make loans or investments, or pay dividends. Failure to comply with these covenants could havea material adverse effect on our business, financial condition, or results of operations.

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 ofoperations.

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,or 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 throughborrowed 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, orresults of operations.

In addition, our profit margins depend on strategic investment 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. Therefore, increases in the cost of capital available to us or our inability to access additional capital throughborrowed funds at economic terms could restrict our ability to engage in strategic investment buying initiatives, which could reduce our profit margins and have a material adverse effecton our business, financial condition, or results of operations.

We have a significant service relationship with Save-A-Lot, and the wind-down of our relationship with Save-A-Lot could adversely impact our results of operations.

We have provided significant support services to Save-A-Lot since Supervalu divested it in December 2016. We will lose a significant amount of revenue and corresponding operatingearnings as a result of the wind-down of our large professional services agreement with Save-A-Lot, which agreement is scheduled to expire in December 2021. We have been executingon our plan to reduce costs, grow our sales and enhance our margins over the past several years, but we may not be able to grow sales quickly enough, further eliminate costs or enhancemargins to fully mitigate the lost revenue as the services agreement unwinds. Failure to execute on our services offering and growth strategy, including making the necessary capitalinvestments for that growth while managing additional cost reductions, could further adversely impact our results of operations. Our services agreement with Save-

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A-Lot provides certain rights for the customers. The services agreement will typically include a fixed term but provide the customer certain termination rights, including in the event ofour material breach, and may give the customer certain termination and monetary rights with respect to specified services or service categories in the event we do not perform to agreed-upon minimum levels of service. The services agreement will also generally require us to indemnify the customer against third-party claims arising out of the performance of theservices under the agreement. Termination of services agreements, in whole or in part, and in particular the services agreement with Save-A-Lot, could adversely affect our business orresults of operations.

Changes in the military commissary system or decreases in governmental funding could negatively impact the sales and operating performance of our military business.

Our wholesale segment sells and distributes grocery products to military commissaries and exchanges in the United States. The commissary system has experienced material changes asthe Defense Commissary Agency has looked to reduce the level of governmental funding required for the system, including to lower prices from suppliers and to offer its own private-label products. The military food distribution industry already has narrow operating margins making economies of scale critical for distributors. These changes could have an adverseimpact on the sales and operating performance of our military business. Additionally, our military business faces competition from large national and regional food distributors, as wellas smaller food distributors, and the military commissaries and exchanges face competition from low-cost retailers.

Economic Risks

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

The outbreak of COVID-19 in the United States and Canada had sudden and significant impacts on our industry, including increased demand for the products we distribute as consumersbegan pantry loading and the consumption of food at home increased due to social distancing and stay-at-home orders. We have continued to experience elevated demand as consumerscontinue to eat at home rather than at restaurants, school or work. While our independent customers have performed well through the COVID-19 pandemic, there is no assurance thatincreased volume at these customers will be sustained over the long-term. The increased wholesale customer and end-consumer demand may decrease relative to current levels if andwhen the need for social distancing, quarantine or isolation measures decreases, and we are unable to predict when and to what extent that may occur. These measures have also had anadverse impact on the economies of North America. The ultimate impact of COVID-19 on our business and the economy, and the duration thereof, is uncertain.

Our business may be negatively impacted as a result of the COVID-19 pandemic. For example, we have incurred, and expect to continue to incur, increased costs, including: labor costsresulting from overtime, paid sick leave, or leaves of absence; costs associated with safety measures throughout our facilities, including enhanced sanitation, social distancing practices,such as partitions, decals, pre-shift temperature screenings, and the provision of personal protective equipment to our associates; costs associated with evaluating and piloting additionalsafety measures; and other operating costs due to short-term significant increases in demand spikes. In addition, we provided our associates with temporary state of emergency wageincreases and increased overtime to warehouse, driver, and in-store associates during the peak of the pandemic, and may reinstitute that benefit in the future. If there were a rapidreduction in demand for the products we distribute, and we were unable to sufficiently reduce these costs, our results may be negatively impacted. We have experienced higher thanusual levels of out-of-stocks leading to reduced fill rates, which may result in higher costs, fees, or penalties. We have experienced temporary facility closures due to the time requiredfor increased sanitation procedures, and we may experience future facility closures due to outbreaks of COVID-19, reduced workforce or government mandates. We could experiencedisruptions to our supply chain through the shutdown of one or more of our distribution centers or warehouses, the inability to transport products to serve our customers or the inabilityof our vendors and contract manufacturers to supply products to us.

We have experienced declines in certain of our channels as a result of changes in consumer purchasing habits related to COVID-19, including reductions in food service, bulk snacks,seeds and nuts, and international categories. Changes in consumer purchasing habits, including potential reduced sales to our wholesale customers in the future due to a shift back tofood away from home, which may be accelerated following the development and distribution of a vaccine, may negatively impact our results. Further, the pandemic has accelerated theconsumer shift to e-commerce and new ways to purchase food, including increased restaurant and other delivery options, which may negatively impact demand at our retail grocerycustomers, and which trends may continue beyond the cessation of social distancing practices. In addition, our business could be negatively impacted by reduced workforces due toillness or other restrictions related to COVID-19; a shortage of qualified labor to support meeting increased demand; any failure of third parties on which we rely, including oursuppliers, contract manufacturers, contractors and external business partners to meet their obligations to us, or significant disruptions in their ability to do so; or diversion ofmanagement’s attention, including

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if any key employee becomes ill, and resources primarily focused on reducing operating expenses being redirected. In addition, the contraction of financial markets may impact ourability to execute transactions to dispose of or acquire real estate or distribution assets, including potential impacts to our ability to divest our retail operations.

We cannot predict the duration of the impact of COVID-19 or any related policies, such as stay-at-home orders or business or school closures. Our inventory and sales levels havestabilized to higher than pre-COVID-19 levels. If there were a rapid reduction in demand for the products we distribute, our results and cash flows may be negatively impacted if we areunable to monetize working capital.

Any of the foregoing factors, or other effects of the COVID-19 pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our sales and damagethe Company’s financial condition, results of operations, cash flows and its liquidity position, possibly to a significant degree. Our efforts to manage and mitigate these factors may beunsuccessful, and the effectiveness of these efforts depends on factors beyond our control.

The ultimate impact of the COVID-19 pandemic on our business will depend on many factors, including, among others, the duration of social distancing, quarantine or isolationmeasures and whether additional waves of COVID-19 will affect the United States and Canada, our ability and the ability of our suppliers to continue to operate manufacturing facilitiesand maintain the supply chain without material disruption, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery mayimpact consumer eating and purchasing habits. We cannot predict the duration or scope of the disruption. Therefore, the ultimate financial impact cannot be reasonably estimated at thistime.

Our high level of debt makes us more sensitive to the effects of economic downturns and could adversely affect our business.

To finance the acquisition of Supervalu, we incurred or assumed significant indebtedness, including indebtedness incurred to refinance Supervalu’s and our then existing debt, and as ofAugust 1, 2020, we had approximately $2.50 billion of long-term debt outstanding. Our leverage, and any increase therein, could have important potential consequences, including, butnot limited to:

• increasing our vulnerability to, and reducing our flexibility to plan for and respond to, general adverse economic and industry condition and changes in our business and thecompetitive environment;

• requiring the dedication of a substantial portion of our cash flow from operations to the payment of principal of, and interest on, indebtedness, thereby reducing the availabilityof such cash flow to fund working capital, capital expenditures, acquisitions, 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 debt;• limiting our ability to borrow additional funds in the future and increasing the cost of any such borrowing;• placing us at a competitive disadvantage compared to competitors with less leverage or better access to capital resources; and• imposing restrictive covenants on our operations, which, if not complied with, could result in an event of default, which in turn, if not cured or waived, could result in the

acceleration of the applicable debt, and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.

There is no assurance that we will generate cash flow from operations or that future debt or equity financings will be available to us to enable us to pay our indebtedness or to fund otherneeds. As a result, we may need to refinance all or a portion of our indebtedness on or before maturity. There is no assurance that we will be able to refinance any of our indebtedness onfavorable 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, financialcondition, or results of operations. In addition, potential changes to, or the elimination of, the London Interbank Offered Rate (“LIBOR”), may adversely affect interest expense relatedto borrowings under our credit facilities and interest rate swaps, which could potentially negatively impact our financial condition.

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Our operations are sensitive to macroeconomic conditions.

The grocery industry is sensitive to national and regional economic conditions and the demand for the products that we distribute may be adversely affected from time to time byeconomic downturns that impact consumer spending, including discretionary spending, as well as general trends impacting the grocery retail business, such as an increase in food-away-from-home. Future economic conditions such as employment levels, business conditions, housing starts, interest rates, inflation rates, energy and fuel costs, and tax rates could reduceconsumer spending or change consumer purchasing habits. Among these changes could be a reduction in the number of our higher margin natural and organic products that consumerspurchase where there are conventional lower margin alternatives given that many natural and organic products, and particularly natural and organic foods, often have higher retail pricesthan do their conventional counterparts.

Our business may be sensitive to inflationary and deflationary pressures.

Many of our sales are at prices that are based on our product cost plus a percentage markup. As a result, volatile food costs have a direct impact upon our profitability. Prolonged periodsof 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 onall or a portion of such product cost increases to our customers. In addition, product cost inflation may negatively impact the consumer discretionary spending trends and reduce thedemand for higher-margin natural and organic products, which could adversely affect profitability. Conversely, because many of our sales are at prices that are based upon product costplus a percentage markup, our profit levels may be negatively impacted during periods of product cost deflation even though our gross profit as a percentage of net sales may remainrelatively constant. To compensate for lower gross margins, we, in turn, must reduce expenses that we incur to service our customers. If we are unable to reduce our expenses as apercentage of net sales, our business, financial condition, or results of operations could be materially and adversely impacted.

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

Changes in consumer eating habits away from natural, organic, or specialty products could reduce demand for our higher margin natural and organic products. Consumer eating habitscould be affected by a number of factors, including changes in attitudes regarding benefits of natural and organic products when compared to similar lower margin conventionalproducts or new information regarding the health effects of consuming certain foods. Although there is a growing consumer preference for sustainable, organic and locally grownproducts, there can be no assurance that such trend will continue. Changing consumer eating habits also occur due to generational shifts. Millennials, the largest demographic group inthe U.S. in terms of spend, seek new and different as well as more ethnic menu options and menu innovation. However, there can be no assurance that such trend will continue. Ifconsumer 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 associatedwith 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 trends in eatinghabits, our business, financial condition, or results of operations could suffer.

Increased fuel costs may adversely affect our results of operations.

Increased fuel costs may have a negative impact on our results of operations. The high cost of diesel fuel can increase the price we pay for products as well as the costs we incur todeliver 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, andoperating results. To manage this risk, we have in the past periodically entered, and may in the future periodically enter, into commodity derivative contracts to hedge a portion of ourprojected diesel fuel requirements. To the extent we do not enter into commodity swap agreements, our exposure to volatility in the price of diesel fuel would increase relative to ourexposure to volatility in periods in which we had outstanding commodity derivative contracts. We do not enter into fuel hedge contracts for speculative purposes. We periodically enterinto forward purchase commitments for a portion of our projected monthly diesel fuel requirements at fixed prices. We also maintain a fuel surcharge program which allows us to passsome of our higher fuel costs through to our customers. We cannot guarantee that we will continue to be able to pass a comparable proportion or any of our higher fuel costs to ourcustomers in the future, 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 ofkey suppliers, performance by outsourced service providers, transportation interruptions, labor supply or stoppages or vendor defaults or disputes, or other reasons could impair ourability to distribute our products. For example, we have both distribution centers and retail stores

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in cities and states where civil unrest has led to extensive property damage. Further civil unrest and damage to our real and personal property, or our customers’ locations, could have anadverse impact to our business. 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 manage effectivelysuch events if they occur, there could be an adverse effect on our business, financial condition or results of operations.

In addition, such disruptions may reduce the number of consumers who visit our customers’ facilities in any affected areas. Furthermore, such disruption may interrupt or impede accessto 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.

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

• the products that we distribute in the United States are subject to inspection by the United States Food and Drug Administration;• our warehouse and distribution centers are subject to inspection by the United States Department of Agriculture, the United States Department of Labor Occupational and

Health Administration, and various state health and workplace safety authorities; and• the United States Department of Transportation and the United States Federal Highway Administration regulate our United States trucking operations.

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 areassuch as environmental, health and sanitation standards, food safety, marketing of natural or organically produced food, facilities, pharmacies, equal employment opportunity, publicaccessibility, employee benefits, wages and hours worked and licensing for the sale of food, drugs, tobacco and alcoholic beverages, among others. For example:

Environmental, Health and Safety: Our operations are subject to extensive and increasingly stringent laws and regulations pertaining to the protection of the environment, includingthose 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 orexpected to be imposed in recently renewed or soon-to-be renewed environmental permits, may require capital expenditures. Additionally, concern over climate change, including theimpact of global warming, has led to significant United States and international legislative and regulatory efforts to limit greenhouse gas emissions. Increased regulation regardinggreenhouse gas emissions, especially diesel engine emissions, could impose substantial costs on us. These costs include an increase in the cost of the fuel and other energy we purchaseand capital costs associated with updating or replacing our vehicles prematurely. Until the timing, scope, and extent of such regulation becomes known, we cannot predict its effect onour results of operations. It is reasonably possible, however, that it could impose material costs on us which we may be unable to pass on to our customers.

Food Safety and Marketing: There is increasing governmental scrutiny, regulations and public awareness regarding food quality and food and drug safety. We may be adversely affectedif consumers lose confidence in the safety and quality of our food and drug products. In addition, as a distributor and manufacturer of natural, organic, and specialty foods (along withconventional foods products), we are subject to increasing governmental scrutiny of and public awareness regarding food safety and the sale, packaging, and marketing of natural andorganic 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, whichcould adversely affect our operating margins. Failure to comply with existing or new laws or regulations could result in significant damages or penalties

Foreign Operations: Our supplier base includes domestic and foreign suppliers. In addition, we have customers located outside the United States and the acquisition of Supervalu, inparticular its AG Florida business, expanded our wholesale business to additional international customers. Accordingly, laws and regulations affecting the importation and taxation ofgoods, 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. Inaddition, we are required to comply with laws and regulations governing export controls, and ethical,

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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 andFrench 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 anyadditional licenses, permits, or approvals in new jurisdictions where we intend to do business could have a material adverse effect on our business, financial condition, or results ofoperations.

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 anincrease in governmental regulation and audits at both the federal and state levels. For example, in 2019, the Company settled with the Drug Enforcement Administration allegedviolations of the Controlled Substances Act relating to an administrative subpoena received by Supervalu that requested, among other things, information on the company’s pharmacypolicies 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 accompanyingregulations. Additionally, the Patient Protection and Affordable Care Act made several significant changes to Medicaid rebates and to reimbursement. One of these changes was torevise the definition of the Average Manufacturer Price, a pricing element common to most payment formulas, and the reimbursement formula for multi-source (i.e., generic) drugs.This change will affect our reimbursement. In addition, the Patient Protection and Affordable Care Act made other changes that affect the coverage and plan designs that are or will beprovided by many of our health plan clients, including the requirement for health insurers to meet a minimum medical loss ratio to avoid having to pay rebates to enrollees. ThesePatient Protection and Affordable Care Act changes may not affect our business directly, but they could indirectly impact our services and/or business practices.

The failure to comply with applicable regulatory requirements or make capital expenditures required to maintain compliance with governmental laws and regulations, including thosereferred to above and in Item 1. Business-Government Regulation of our 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 jurisdictionswhere 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, orapplications, nor can we determine the effect that additional governmental regulations or administrative orders, when and if promulgated, or disparate federal, state and local regulatoryschemes 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 thosereferred to above, we may be subject to investigations, criminal sanctions or civil remedies, including fines, injunctions, prohibitions on exporting, seizures, or debarments fromcontracting 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 ourbusiness, financial condition, or results of operations. In addition, governmental units may make changes in the regulatory frameworks within which we operate that may require eitherthe corporation as a whole or individual businesses 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 an inherent risk of exposure to product liability claims if the products we manufacture or sell cause injury or illness. In addition, meat, seafood, cheese, poultry, and otherproducts 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 besubject to contamination by disease-producing organisms, or pathogens, such as Listeria monocytogenes, Salmonella and generic E.coli. These pathogens are generally found in theenvironment, 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 beintroduced 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 finishedproduct 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 toactual 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 compositionclaimed to be, may result in product liability claims from individuals, consumers and governmental agencies, penalties and enforcement actions from government agencies, a loss ofconsumer confidence, harm to our reputation and could cause production and delivery disruptions, which may adversely affect our financial condition or results of operations. While wegenerally seek contractual indemnification and insurance coverage from our suppliers, we might not be able to recover these significant costs from our suppliers. We may

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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 weacquired them.

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 mayrecall 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 ofoperations. 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 areasonable 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 indemnificationfrom manufacturers, but any such indemnification is limited, as a practical matter, to the creditworthiness of the indemnifying party. If we or any of our acquired companies do not haveadequate insurance or contractual indemnification available, product liability claims and costs associated with product recalls, including a loss of business, could have a material adverseeffect on our business, financial condition, or results of operations.

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 intellectualproperty. We believe our trademarks, private-label products, and domain names are valuable assets. However, our intellectual property rights may not be sufficient to distinguish ourproducts 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 besuccessfully asserted against such third parties or may be invalidated, circumvented, or challenged. Asserting or defending our intellectual property rights could be time consuming andcostly 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 ourwholesale 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, ourtrademarks 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 canbe 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 incertain geographies or in connection with certain products and services, any of which could adversely affect our business.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

We maintained 55 distribution centers and warehouses at August 1, 2020, which were utilized by our Wholesale segment and our other operating segments.

Distribution Centers

The following table shows our dry and cold storage distribution and warehouse facilities and the owned and leased square footage we occupied as of August 1, 2020:

Location Owned Square Footage Leased Square Footage Total Square Footage

  (in thousands)Hopkins, Minnesota(1) 1,866 — 1,866

Stockton, California — 1,290 1,290

Mechanicsville, Virginia(1) 1,249 — 1,249

Riverside, California — 1,175 1,175

Centralia, Washington — 1,155 1,155

York, Pennsylvania — 1,039 1,039

Joliet, Illinois — 988 988

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Location Owned Square Footage Leased Square Footage Total Square Footage

  (in thousands)Champaign, Illinois — 910 910

Harrisburg, Pennsylvania — 883 883

Green Bay, Wisconsin — 980 980

Fort Wayne, Indiana 871 — 871

Commerce, California — 858 858

Sarasota, Florida — 847 847

Pompano Beach, Florida — 799 799

Ridgefield, Washington(1) 779 — 779

Quincy, Florida 758 — 758

Pittsburgh, Pennsylvania 679 — 679

Atlanta, Georgia(1) 389 259 648

Moreno Valley, California — 613 613

Lancaster, Texas — 590 590

Indianola, Mississippi 543 40 583

Anniston, Alabama 465 105 570

Aurora, Colorado — 529 529

Montgomery, New York(1) 500 — 500

Rocklin, California(1) 469 — 469

Stevens Point, Wisconsin 314 146 460

Gilroy, California(1) 447 — 447

Sturtevant, Wisconsin(1) 442 — 442

Carlisle, Pennsylvania — 423 423

Howell Township, New Jersey(1) 397 — 397

Richburg, South Carolina(1) 342 — 342

Fargo, North Dakota 336 — 336

Oglesby, Illinois — 325 325

Dayville, Connecticut(1) 317 317

Greenwood, Indiana(1) 308 — 308

Prescott, Wisconsin(1) 307 — 307

Santa Fe Springs, California(1) — 298 298

Chesterfield, New Hampshire(1) 300 — 300

Iowa City, Iowa 271 20 291

West Sacramento, California(1) 251 — 251

Bismarck, North Dakota 244 — 244

Anniston, Alabama — 231 231

Yuba City, California — 224 224

Billings, Montana 220 — 220

Vaughan, Ontario — 180 180

Edison, New Jersey — 178 178

West Newell, Illinois 155 — 155

Philadelphia, Pennsylvania — 100 100

Richmond, British Columbia — 96 96

Roseville, California — 86 86

West Sacramento, California(1) 85 — 85

Logan Township, New Jersey — 70 70

Burnaby, British Columbia — 41 41

Montreal, Quebec — 31 31

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Location Owned Square Footage Leased Square Footage Total Square Footage

  (in thousands)Truckee, California — 8 8

13,304 15,517 28,821

(1) These distribution centers were mortgaged under and encumbered by our Term Loan Facility. We expect additional distribution centers will become mortgaged under and encumbered by our Term LoanFacility.

Retail Stores

The following table summarizes retail stores classified as continuing operations as of August 1, 2020, which were utilized by our Retail segment:

Retail Banner Number of Stores Owned Square Footage Leased Square Footage Total Square Footage

(square footage in thousands)Cub Foods(1)(2) 52 1,134 2,445 3,579

Shoppers(2) 19 — 1,137 1,137

Total 71 1,134 3,582 4,716

(1) Cub Foods stores include stores in which we have a controlling ownership interest, and excludes 33 franchised Cub Foods stores in which we have a minority interest or no interest.(2) These retail banners are reported within continuing operations in the Consolidated Financial Statements. Shoppers retail stores exclude five stores classified as discontinued operations in the Consolidated

Financial Statements.

Corporate

As of August 1, 2020, we had approximately 3 million square feet of surplus retail stores and warehouses, including assigned leases, 77 percent of which was leased.

As of August 1, 2020, we utilized approximately 635 thousand square feet of corporate office space primarily related to our executive offices located in Providence, Rhode Island andEden Prairie, Minnesota, as well as other smaller administrative offices across the United States. We own approximately 240 thousand square feet and lease the remaining 395 thousandsquare feet of our corporate office space.

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 regardingemployment law, pension plans, unfair labor practices, labor union disputes, supplier, customer and service provider contract terms, real estate, and antitrust. Other than as described inNote 18—Commitments, Contingencies and Off-Balance Sheet Arrangements in Part II, Item 8 of this Annual Report, which is incorporated herein, and as set forth below, there are nopending material legal proceedings to which we are a party or to which our property is subject.

In 2016, as part of a hazardous waste enforcement campaign by the California Attorney General’s Office and local district attorneys, Unified Grocers received a subpoena from the YoloCounty District Attorney regarding hazardous waste management and storage at its Stockton and Commerce, California distribution centers. We have provided requested documents andcooperated fully with the investigation. On May 24, 2018, the District Attorney toured the Stockton distribution center and generally found the distribution center to be in compliance,and minor items noted regarding labeling have been addressed. We are in negotiations with the District Attorney to reach a settlement, which we expect will be immaterial in amountbut may include penalties of $100,000 or more.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

PART II.

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

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

On August 1, 2020, we had 85 stockholders of record. The number of record holders is not representative of the number of beneficial holders of our common stock because depositories,brokers or other nominees hold many shares.

We have never declared or paid any cash dividends on our capital stock. We anticipate that all of our earnings in the foreseeable future will be retained to finance the continued growthand development of our business and repay our outstanding indebtedness, and we have no current intention to pay cash dividends. Our future dividend policy will depend on ourearnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors. Additionally, our ABL Credit Facility and Term Loan Facilitycontain terms that limit our ability to make any cash dividends unless certain conditions and financial tests are met.

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”) S&P SmallCap 600 Index and the S&P SmallCap 600 Food Distributors Index. The comparison assumes the investment of $100 on August 1, 2015 in our commonstock 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.

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 underthat 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 RETURNAmong United Natural Foods, Inc., the S&P SmallCap 600, the S&P SmallCap 600 Food Distributors(1) 

(1) Our selected industry peer group reflects the S&P SmallCap 600 Food Distributors Index, which includes SpartanNash Company, The Andersons, Inc., The Chef’s Warehouse, Inc. andUNFI.

August 1, 2015 July 30, 2016 July 29, 2017 July 28, 2018 August 3, 2019 August 1, 2020United Natural Foods, Inc $ 100.00 $ 109.77 $ 83.20 $ 71.40 $ 18.49 $ 43.60

S&P SmallCap 600 Index $ 100.00 $ 105.96 $ 124.87 $ 152.37 $ 139.39 $ 130.71

S&P SmallCap 600 Food Distributors Index $ 100.00 $ 100.53 $ 91.85 $ 88.04 $ 50.00 $ 51.22

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ITEM 6.    SELECTED FINANCIAL DATA

The following table sets forth our selected historical financial data for the past five years derived from our Consolidated Financial Statements presented in this Annual Report andhistorical financial data derived from previously audited consolidated financial statements. The historical results are not necessarily indicative of results to be expected for any futureperiod. The following selected consolidated financial data should be read in conjunction with and is qualified by reference to Item 7. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations, Item 1A. Risk Factors and our Consolidated Financial Statements and notes thereto included elsewhere in this Annual Report. We havenot declared or paid cash dividends in any of the following fiscal periods.

Year-over-year comparisons are significantly affected by material acquisitions. Our acquisition of Supervalu, which closed on October 22, 2018, and the acquisitions discussed in Part I.Item 1. of this Annual Report, significantly impact the comparability of reported results between periods. In addition, we have revised the following table for the immaterial errorcorrection discussed in Note 20—Immaterial Correction to Prior Period Financial Statements and the presentation of Retail within continuing operations discussed in Note 1—Significant Accounting Policies, both included within Part II, Item 8 of this Annual Report on Form 10-K.

Fiscal Year

Consolidated Statements of Operations Data: 2020

(52 weeks) 2019 

(53 weeks) 2018 

(52 weeks) 2017 

(52 weeks)(1) 2016 

(52 weeks)(1)

  (In thousands, except per share data)Net sales $ 26,514,267 $ 22,307,456 $ 10,226,683 $ 9,274,471 $ 8,470,286

Cost of sales 22,639,475 19,098,850 8,706,669 7,847,983 7,195,112

Gross profit 3,874,792 3,208,606 1,520,014 1,426,488 1,275,174

Operating expenses 3,541,487 2,967,912 1,274,562 1,196,032 1,049,690

Goodwill and asset impairment charges 425,405 292,770 11,242 — 1,012

Restructuring, acquisition and integration related expenses 86,383 148,195 9,738 6,864 4,540

Loss (gain) on sale of assets 17,132 (499) — — —

Operating (loss) income (195,615) (199,772) 224,472 223,592 219,932

Other expense (income):

Net periodic benefit income, excluding service cost (39,177) (35,041) — — —

Interest expense, net 191,607 180,789 16,025 16,754 15,144

Other, net (3,591) (1,063) (1,545) (5,152) 743

Total other expense, net 148,839 144,685 14,480 11,602 15,887

(Loss) income from continuing operations before income taxes (344,454) (344,457) 209,992 211,990 204,045

(Benefit) provision for income taxes (90,445) (58,936) 47,215 83,303 80,807

Net (loss) income from continuing operations $ (254,009) $ (285,521) $ 162,777 $ 128,687 $ 123,238

Net (loss) income from continuing operations per common share—Basic $ (4.81) $ (5.57) $ 3.22 $ 2.54 $ 2.45

Net (loss) income from continuing operations per common share—Diluted $ (4.81) $ (5.57) $ 3.20 $ 2.53 $ 2.45

As of the Fiscal Year Ended

Consolidated Balance Sheets Data: August 1, 

2020 August 3, 

2019 July 28, 2018 July 29, 2017(1) July 30, 2016(1)

Working capital $ 1,334,843 $ 1,449,984 $ 1,080,327 $ 952,073 $ 987,291

Total assets $ 7,586,972 $ 7,174,335 $ 2,957,583 $ 2,882,567 $ 2,849,627

Total long-term debt and finance leases, excluding current portion $ 2,570,297 $ 2,927,258 $ 340,323 $ 366,089 $ 580,872

Total stockholders’ equity $ 1,142,258 $ 1,504,305 $ 1,839,066 $ 1,677,925 $ 1,516,979

(1) The correction of the immaterial error described in Note 20—Immaterial Correction to Prior Period Financial Statements resulted in changes to prior year amounts not included in the Consolidated FinancialStatements, which included an increase in Cost of sales of $2.4 million and $4.2 million in fiscal 2017 and 2016, respectively, a decrease in the provision for income taxes of $1.0 million and $1.6 million infiscal 2017 and 2016, and a decrease in Retained earnings of $4.0 million and $2.5 million for fiscal 2017 and 2016, respectively.

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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 appearing elsewhere in this Annual Report.

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 risksand 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 becausethey 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 or false. 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 asotherwise 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 oractual 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:

• the impact and duration of the COVID-19 outbreak;• our dependence on principal customers;• our sensitivity to general economic conditions including changes in disposable income levels and consumer spending trends;• our ability to realize anticipated benefits of our acquisitions and dispositions, in particular, our acquisition of Supervalu;• our reliance on the continued growth in sales of our higher margin natural and organic foods and non-food products in comparison to lower margin conventional grocery

products;• increased competition in our industry as a result of increased distribution of natural, organic and specialty products, and direct distribution of those products by large retailers

and online distributors;• the possibility that restructuring, asset impairment, and other charges and costs we may incur in connection with the sale or closure of our retail operations will exceed our

current expectations;• increased competition as a result of continuing consolidation of retailers in the natural product industry and the growth of supernatural chains;• the addition or loss of significant customers or material changes to our relationships with these customers;• union-organizing activities that could cause labor relations difficulties and increased costs;• our ability to operate, and rely on third-party, reliable and secure technology systems;• the relatively low margins of our business;• moderated supplier promotional activity, including decreased forward buying opportunities;• 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 additional asset impairment charges;• our sensitivity to inflationary and deflationary pressures;• the potential for disruptions in our supply chain or our distribution capabilities by circumstances beyond our control, including a health epidemic;• the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise;• volatility in fuel costs;• volatility in foreign exchange rates; and• our ability to identify and successfully complete asset or business acquisitions.

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

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EXECUTIVE OVERVIEW

Business Overview

As a leading distributor of natural, organic, specialty, produce, and conventional grocery and non-food products, and provider of retailer services in the United States and Canada, webelieve we are uniquely positioned to provide the broadest array of products and services to customers throughout North America. We offer more than 275,000 products consisting ofnational, regional and private label brands grouped into six product categories: grocery and general merchandise; produce; perishables and frozen foods; nutritional supplements andsports nutrition; bulk and food service products; and personal care items. Through our October 2018 acquisition of Supervalu, we are transforming into North America’s premierwholesaler with 55 distribution centers and warehouses representing approximately 29 million square feet of warehouse space. During the fourth quarter of fiscal 2020, we determinedwe no longer met the held for sale criterion for a probable sale to be completed within 12 months for the Cub Foods business and the majority of the remaining Shoppers locations. Wereviewed our reportable segments and determined we were required to report Retail as a separate segment. Our business is classified into two reportable segments: Wholesale and Retail;and also includes a manufacturing division and a branded product line division.

Fiscal 2020 and 2021

In fiscal 2020, we moved closer to completing the integration of Supervalu and positioned ourselves for future growth. Our operating performance in fiscal 2020 benefited from the shiftin food-at-home consumption driven by the impact of the global COVID-19 pandemic, during which we fulfilled our role as a critical link in the North American food supply chainwhile prioritizing the safety and well-being of our associates. By the end of fiscal 2020, we had completed the consolidation of five distribution centers in the Pacific Northwest into twodistribution centers. We expect this consolidation to provide significant future operating benefits. We exceeded our original longer term cost synergy expectations, which called for aminimum of $185 million in savings related to the Supervalu acquisition, and believe we have further cost saving opportunities that we plan to pursue in fiscal 2021 and beyond. Weremain optimistic in our ability to grow through cross selling our diverse product and services offerings, innovating to grow our Private Brands, and capitalizing on the growing trends ineCommerce. After investing in the growth of our business, we plan to use free cash flow to primarily reduce debt and improve our financial leverage.

Growth Drivers

A key component of our business and growth strategy has been to acquire wholesalers differentiated by product offerings, service offerings and market area. In fiscal 2019, theacquisition of Supervalu accelerated our “build out the store” strategy, diversified our customer base, enabled cross-selling opportunities, expanded our market reach and scale,enhanced our technology, capacity and systems, and is expected to continue to deliver significant synergies and accelerate potential growth. We believe the Supervalu acquisitionallowed us to better serve our wholesale customers’ needs and compete in the current environment by providing additional warehouse and transportation capacity, as well as enabling usto provide a broader array of products to our customers. As one of the largest wholesale grocery distributors in North America, and in light of the continued expansion of our distributionnetwork and “build out the store” strategy, we believe we are well positioned to leverage our infrastructure in the current economic and social environment to continue to serve ourcustomers and the communities in which we operate, and are actively pursuing new customers.

We believe our significant scale and footprint will generate long-term shareholder value by positioning us to continue to grow sales of natural, organic, specialty, produce andconventional grocery and non-food products, including our Private Brands. We also believe we have an opportunity to sell additional services to our customers to help them moreefficiently operate their business while leveraging the infrastructure investments we’ve made. Services often sold to our customers include coupon processing, consumer marketing,retail technology and payments, and consumer services. We have realized and expect to continue to realize significant cost and revenue synergies from the acquisition of Supervalu byleveraging the scale and resources of the combined company, cross-selling to our customers, integrating our merchandising offerings into existing warehouses, optimizing our networkfootprint to lower our cost structure and eliminating redundant administrative costs.

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 theUnited States pursuant to a distribution agreement that expires on September 28, 2025.

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We currently operate 71 retail grocery stores acquired in the Supervalu acquisition. We intend to thoughtfully and economically divest these stores over the intermediate-term; however,we have determined that we no longer expect to divest the Cub Foods business and the majority of the remaining Shoppers locations (“Retail”) within one year. As a result, we revisedour Consolidated Financial Statements to reclassify Retail from discontinued operations to continuing operations. This change in financial statement presentation resulted in theinclusion of Retail’s results of operations, financial position, cash flows and related disclosures within continuing operations. Prior periods presented in the Consolidated FinancialStatements have been conformed to the current period presentation, resulting in Retail being presented in continuing operations for all periods.

Other Factors Affecting our Business

Our results are also impacted by macroeconomic and demographic trends, and changes in the food distribution market structure. Over the past several decades, total food expenditureson a constant dollar basis within the United States has continued to increase in total, and the focus in recent decades on natural, organic and specialty foods has benefited the Company;however, consumer spending in the food-away-from-home industry had increased steadily as a percentage of total food expenditures. This trend paused during the 2008 recession, andthen continued to increase. In fiscal 2020, prior to the COVID-19 pandemic, we incurred an increase in customer bankruptcies associated with weakness of certain of our large, regionalnatural and specialty independent customers. The COVID-19 pandemic caused a significant increase in food-at-home expenditures as a percentage of total food expenditures. We expectthat food-at-home expenditures as a percentage of total food expenditures will remain higher than recent years until consumer behaviors return to pre-pandemic levels and businesses areallowed to fully reopen. The economic rescission is expected to persist for some time due to and even after the near-term impact of COVID-19 has passed. In general, economicrecessions usually result in higher food-at home expenditures, which would be expected to continue to benefit our customers and result in higher sales. The COVID-19 pandemic alsodrove significant growth in e-commerce utilization by grocery consumers, and we expect that trend to continue. We expect to benefit from this trend through the growth of ourtraditional e-commerce (“dot.com”) customers, our EasyOptions B2B offering, which directly services non-traditional customers such bakeries or yoga studios, and through customersadopting our turnkey e-commerce platform.

Our results are also impacted by changes in food distribution trends affecting our wholesale customers, such as direct store deliveries and other methods of distribution. Our wholesalecustomers manage their businesses independently and operate in a competitive environment. We seek to obtain security interests and other credit support in connection with the financialaccommodations we extend these customers; however, we may incur additional credit or inventory charges related to our customers, as we expect the competitive environment tocontinue to lead to financial stress on some customers. The magnitude of these risks increases as the size of our wholesale customers increases.

COVID-19 Impact

Impact and Response

As COVID-19 spread in March 2020, shelter-in-place orders and national and state emergencies were issued in the U.S. and our business was designated as an essential business toenable us to continue to serve our customers during the COVID-19 pandemic. During the initial spreading of the virus and implementation of shelter-in-place orders and restaurantclosures, we experienced a surge in demand, as consumers undertook efforts to stock their pantries, and our related wholesale customer purchases surged, which impacted fill andservice rates and depleted inventory levels. Based on historical purchasing levels, we put in place temporary customer supply allocation limits to ensure continued service to ourwholesale customers’ locations, which limits were removed as we added capacity and demand decreased from peak levels. In response to the surge in demand, in the third quarter offiscal 2020, we took actions to respond to the pandemic, to support our associates’ safety and wellbeing, and maximize our logistics network to serve the communities we supply. Theseactions included:

• engaging and hiring associates in March and April, and providing existing associates with temporary state of emergency wage increases and increased overtime to warehouseand driver and retail associates;

• implementing heightened associate safety protocols to keep our workforce healthy, including social distancing practices, enhanced sanitization and COVID communications,implementing extensive safety protocols at our retail locations to protect associates and customers; and evaluating and implementing safety practices for our drivers, sales teamand corporate employees;

• enhancing employee benefits, including wellbeing resources and covering COVID-19 testing expenses and providing coverage for COVID-19 illness or quarantine directed bythe Company or a regulatory agency;

• expanding warehouse operational hours and entering into service provider agreements to facilitate the transportation of our products to meet heightened demand and increaseservice levels;

• donating over 10 million pounds of food and essential items to food banks across the country;• working with suppliers to prioritize the procurement and sale of high-volume SKUs;

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• maintaining high food safety standards for customers and consumers related to COVID-19; and• reassuring the public that the supply chain remains intact, and that food and essential products are available and safe.

We experienced the following impacts from COVID-19 in the second half of fiscal 2020:

• Sales. Sales increased due to the increase in food-at-home expenditures as a result of the economic and social responses to the COVID-19 pandemic.• Gross Profit. Gross profit rates were adversely impacted by lower Wholesale vendor promotions, and lower Retail promotional activity.• Operating Expenses. Operating expense rates were positively impacted by our ability to leverage fixed operating and administrative expenses, which were partially offset by

incremental costs related to COVID-19, including the impact of temporary pandemic related incentives and additional costs for safety protocols and procedures at theCompany’s distribution centers and retail stores. When COVID-19 related health and safety requirements are eased, we expect these costs to subside. These costs areconsidered necessary to protect our employees, product quality standards, and wholesale and retail customers. We estimate that we incurred approximately $56 million ofincremental operating expenses related to our response to the pandemic and operating our business at a higher through-put capacity.

• Operating Earnings. Our business model allows us to leverage sales increases, and provided growth in operating earnings margin, as we leveraged the fixed and variable costsof our supply chain network and administrative expenses. Despite incremental labor and operating costs, additional volume experienced by our distribution network and retailstores drove higher leverage on fixed facility costs, semi-variable costs and general and administrative expenses.

Working Capital and Liquidity

At the onset of the COVID-19 pandemic, working capital was initially reduced providing a strong source of cash flows from operating activities. As of the end of fiscal 2020, workingcapital had stabilized, as inventory, accounts payable and accounts receivable levels normalized to near pre-pandemic levels. The surge in demand during the third quarter discussedabove initially depleted inventory levels of continuing operations, and high sales throughput increased accounts payable and accounts receivable, as we worked to respond to ourcustomers’ modified purchase patterns and prioritized the procurement of high-volume SKUs.

In response to the potential impact of the COVID-19 pandemic, we borrowed an additional $278.5 million on our $2.1 billion ABL Credit Facility, which we fully repaid in the thirdquarter of fiscal 2020. These borrowings were made as a precautionary measure to increase our cash position and preserve financial flexibility in light of uncertainty in the globalmarkets resulting from the COVID-19 pandemic. We expect our unused credit under our ABL Credit Facility will provide sufficient liquidity to continue to meet ongoing workingcapital needs.

Outlook

We expect to continue to benefit from sales and margin growth as compared to historical periods while food-at-home expenditures as a percentage of total food expenditures remainshigher than recent historical precedent, and higher on a year-over-year basis. We have increased our fill rates and service levels, as our and our vendors’ logistics capacity has grown,which had a positive effect on out of stock rates as compared to the initial surge in demand.

Trends in increased sales and gross margin benefits may lessen or reverse in the intermediate months if customers alter their purchasing habits. In addition, as discussed below in thesection “Impact of Inflation or Deflation” and above in the section “Other Factors Affecting our Business” we could also be affected by changes in product mix and product categoryinflation changes, especially if customers change their purchasing habits as a result of sustained downturns in the U.S. and Canadian economies. These potential developments couldimpact food-at-home expenditures and prompt consumers to trade down to lower priced product categories or change their purchasing habits in a manner that would impact ourwholesale supply to our wholesale customers. However, the expected benefits from continuing elevated food-at-home expenditures and the resulting benefits to our wholesale customersare expected to outweigh product mix changes and other factors insofar as they affect our results of operations and cash flows. The ultimate impact on our results is dependent upon theseverity and duration of the COVID-19 pandemic and any economic downturn, food-at-home purchasing levels, and actions taken by governmental authorities and other third parties inresponse to the pandemic, each of which is uncertain, rapidly changing and difficult to predict. Any of these disruptions could adversely impact our business and results of operations.

We could experience disruptions to our supply chain through the shutdown of one or more of our distribution centers or warehouses, the inability to transport products to serve ourcustomers or the inability of our vendors and contract manufacturers to supply products to us. In addition, the contraction of financial markets may impact our ability to executetransactions to dispose of or acquire real estate or distribution assets, including potential impacts to our ability to divest our retail operations.

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CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 and contains significant business tax provision changes to the U.S. tax code,including temporary expansion to the deductibility of interest expense and the ability to treat qualified improvement property as eligible for bonus depreciation as well as the ability tocarry back net operating losses. In addition, the CARES Act changed the required filing of our federal income tax return from May 2020 to July 2020, and allows remittances ofemployer FICA payments previously due between March 2020 and December 2020 to be deferred until December 2021 and December 2022. Prior to the application of the CARES Act,the Company had a deferred tax asset related to $203 million of federal net operating losses that were available for unlimited carryforward (but no carryback) pursuant to provisions ofthe 2017 Tax Cuts and Jobs Act, which permitted taxpayers to carryforward net operating losses indefinitely. The CARES Act provides us the ability to carry these losses back at a 35%federal tax rate during the carry back periods, as compared to the current 21% federal tax rate. This resulted in a tax benefit of approximately $39.5 million, an estimate of which theCompany recorded in the third quarter of Fiscal 2020, and which was finalized during the fourth quarter of fiscal 2020. The entire tax benefit associated with the net operating loss carryback has been recorded as a current tax receivable in the Consolidated Balance Sheet as of August 1, 2020.

Distribution Center Network

Network Optimization and Construction

Within the Pacific Northwest, we completed the transfer of the volume of five distribution centers and their related supporting off-site storage facilities into two distribution centersduring fiscal 2020. In fiscal 2021, we expect to achieve synergies and cost savings through eliminating inefficiencies, including incurring lower operating, shrink and off-site storageexpenses. We also expect that the optimization of the Pacific Northwest distribution network will help deliver meaningful synergies contemplated in the Supervalu acquisition. Weexpanded the Ridgefield, WA distribution center to enhance customer product offerings, create more efficient inventory management, streamline operations and incorporate greatertechnology to deliver a better customer experience. The Ridgefield distribution center will deploy a warehouse automation solution that supports our slow-moving SKU portfolio. Theoperational start-up of the Centralia, WA distribution center began in the fourth quarter of fiscal 2019 and was completed in the fourth quarter of fiscal 2020. We ceased operations inour Tacoma, WA, Auburn, WA, Auburn, CA and Milwaukie, OR (Portland) distribution centers and have transitioned to supplying customers served by these locations to our Centralia,WA, Ridgefield, WA and Gilroy, CA distribution centers. We continue to evaluate our distribution center network to optimize its performance and expect to incur incremental expensesrelated to any future network realignment and are working to both minimize these costs and obtain new business to further improve the efficiency of our transforming distributionnetwork.

In connection with our consolidation of distribution centers in the Pacific Northwest, during fiscal 2020, we recorded a $10.6 million multiemployer pension plan withdrawal liability,under which payments will be made over a one-year period beginning in fiscal 2022, and also incurred integration expenses, such as incremental employee and moving costs.Distribution center integration costs and charges are recorded within Restructuring, acquisition and integration related expenses.

To support our continued growth within southern California, we began operating a newly leased facility with approximately 1.2 million square feet upon completion of its constructionin the fourth quarter of fiscal 2020. This facility provides significant capacity to service our customers in this market. On February 24, 2020, we executed a purchase option to acquirethe real property of this distribution center agreeing to pay approximately $156.9 million for the facility, subject to finalization. We expect to engage a real estate partner to monetize thereal property of this location, including through a sale-leaseback transaction that would ultimately reduce rents paid for this property from current rents, which we expect would occur onor before June 2022.

Distribution Center Sales

We sold five distribution centers in fiscal 2020 for aggregate consideration of $133.0 million, $38.0 million of which was received in the form of a short-term note receivable that weexpect to receive the remaining proceeds prior to December 31, 2020. As we consolidate our distribution networks, we may sell additional owned facilities or exit leased facilities.

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Operating Efficiency

As part of our “one company” approach, we are in the process of converting to a single national warehouse management and procurement system to integrate our existing facilities,including acquired Supervalu facilities, onto one nationalized platform across the organization. We continue to focus on the automation of our new or expanded distribution centers thatare at different stages of construction and implementation. These steps and others are intended to promote operational efficiencies and improve operating expenses as a percentage of netsales.

Goodwill Impairment Review

During the first quarter of fiscal 2020, we changed our management structure and internal financial reporting, which resulted in the requirement to combine the Supervalu Wholesalereporting unit and the legacy Company Wholesale reporting unit into one U.S. Wholesale reporting unit, and experienced a further sustained decline in market capitalization andenterprise value. As a result of the change in reporting units and the sustained decline in market capitalization and enterprise value, we performed an interim quantitative impairmentreview of goodwill for the Wholesale reporting unit, which included a determination of the fair value of all reporting units. Based on this analysis, we determined that the carrying valueof our U.S. Wholesale reporting unit exceeded its fair value by an amount that exceeded its assigned goodwill. As a result, we recorded a goodwill impairment charge of $421.5million in the first quarter of fiscal 2020. The goodwill impairment charge is reflected in Goodwill and asset impairment charges in the Consolidated Statements of Operations. Thegoodwill impairment charge reflects the impairment of all of the U.S. Wholesale’s reporting unit goodwill.

Quantitatively, the goodwill impairment was driven by the incorporation of the value associated with the legacy Supervalu wholesale reporting unit that was combined into the legacyCompany Wholesale goodwill reporting unit and a decrease in estimated long-range cash flows prepared as part of the quantitative assessment. The goodwill impairment reviewindicated that the estimated fair value of the Canada Wholesale reporting unit, which had goodwill of $9.9 million as of November 2, 2019, exceeded its carrying values byapproximately 13%. Other continuing operations reporting units, which had goodwill of $9.9 million as of November 2, 2019, were substantially in excess of their carrying value. Ifcircumstances indicate that the value of one of these other reporting units has decreased, we may be required to perform additional reviews of goodwill and incur additional impairmentcharges. The first quarter of fiscal 2020 quantitative goodwill impairment review included a reconciliation of all of the reporting units’ fair value to our market capitalization andenterprise value. Refer Note 7—Goodwill and Intangible Assets in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding our goodwill impairmentcharges.

Divestiture of Retail Operations

We have announced our intention to thoughtfully and economically divest our retail businesses acquired as part of the Supervalu acquisition in an efficient and economic manner inorder to focus on our core wholesale distribution business. During the fourth quarter of fiscal 2020, we determined we no longer met the held for sale criterion for a probable sale to becompleted within 12 months for the Cub Foods business and the majority of the remaining Shoppers locations, collectively referred to as the Retail segment. The Retail segmentexcludes retail banners and stores previously sold or closed. We reviewed our reportable segments and determined we were required to report Retail as a separate segment. As a result,we revised our Consolidated Financial Statements to reclassify Retail from discontinued operations to continuing operations. This change in financial statement presentation resulted inthe inclusion of Retail’s results of operations, financial position, cash flows and related disclosures within continuing operations. Prior periods presented in the Consolidated FinancialStatements have been conformed to the current period presentation, resulting in Retail being presented in continuing operations for all periods.

The revision of our Consolidated Statements of Operations to present Retail within continuing operations resulted in an increase in our consolidated net sales, gross profit and operatingexpenses, and an increase in consolidated gross profit as a percentage of net sales, which was partially offset by an increase in operating expenses as a percent of net sales. In order topresent Retail’s results of operations within continuing operations, Wholesale sales to Retail have been eliminated upon consolidation. The Wholesale segment’s net sales todiscontinued operations retail stores are eliminated within the Wholesale segment.

In the fourth quarter of fiscal 2020, we recorded a $50.0 million non-cash charge to decrease the carrying value of certain long-lived assets, including property and equipment andintangible assets, to record the assets at the carrying amount at the acquisition date adjusted for any depreciation expense that would have been recognized had the assets been held andused as part of continuing operations since their acquisition date. This charge reflects the depreciation and amortization from the date of the Supervalu acquisition date through fiscal2020 based on useful lives assigned to the underlying Retail assets that were brought back into continuing operations.

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We plan to maximize value as part of the divestiture process, including limiting liabilities and stranded costs associated with these divestitures. We expect to obtain ongoing supplyrelationships with the purchasers of some of these retail operations, but we anticipate some reductions in supply volume will result from the divestiture of certain of these retailoperations. Actions associated with retail divestitures and adjustments to our core cost structure for our wholesale food distribution business are expected to result in headcountreductions and other costs and charges. These costs and charges, which may be material, include multiemployer plan charges, severance costs, store closure charges, and related costs. Awithdrawal from a multiemployer pension plan may result in an obligation to make material payments over an extended period of time. The extent of these costs and charges will bedetermined based on outcomes achieved under the divestiture process. At this time, however, we are unable to make an estimate with reasonable certainty of the amount or type of costsand charges expected to be incurred in connection with the foregoing actions.

Our discontinued operations as of the end of fourth quarter of fiscal 2020 include five Shoppers stores, and for historical periods, results of discontinued operations include theHornbacher’s and Shop ‘n Save and Shop ‘n Save East retail banners, which were divested in fiscal 2019, and Shoppers stores that were sold and closed in fiscal 2020. In addition, cashflows from discontinued operations include real estate sales related to those historical retail operations. These retail assets have been classified as held for sale as of the Supervaluacquisition date, and the results of operations, financial position and cash flows directly attributable to these operations are reported within discontinued operations in our ConsolidatedFinancial Statements for all periods presented. As of the Supervalu acquisition date, retail assets and liabilities were recorded at their estimated fair value less cost to sell, and subsequentto that date, we reviewed the fair value, less cost to sell, of these disposal groups.

In the second quarter of fiscal 2020, we entered into agreements to sell 13 Shoppers stores and decided to close six locations. During fiscal 2020, within discontinued operations theCompany incurred approximately $31.1 million in pre-tax aggregate costs and charges related to Shoppers stores that remain within discontinued operations, consisting of $24.6 millionof operating losses, severance costs and transaction costs during the period of wind-down and $6.5 million of property and equipment impairment charges related to impairment reviews.In the second and third quarters of fiscal 2020, we reviewed the recoverability of the remaining assets held for sale and assessed the remaining composition of the Shoppers disposalgroup based on updated fair values.

We may incur additional costs and charges in the future related to the divestiture of Retail if these locations are subsequently sold, indicators exist that the business may be impaired, orif we incur employee-related charges or wind-down costs.

Professional Services Agreements

In connection with the sale of Save-A-Lot on December 5, 2016, Supervalu entered into a services agreement (the “Services Agreement”) with Moran Foods, LLC (“Moran Foods”), theentity that operates the Save-A-Lot business. Pursuant to the Services Agreement, we provide certain technical, human resources, finance and other operational services to Save-A-Lotfor a term of five years, on the terms and subject to the conditions set forth therein. Total sales earned under the Services Agreement in fiscal 2020 was $24 million, which was recordedwithin Net sales. We expect that services provided under the Services Agreement will wind down on or near the end of the initial term. At that time, we would lose the revenueassociated with this agreement, and if we are not able to eliminate fixed or variable costs associated with servicing this agreement concurrent with the decline in revenue, we wouldincur a decrease in operating profit.

Impact of Inflation or Deflation

We monitor product cost inflation and deflation and evaluate whether to absorb cost increases or decreases, or pass on pricing changes to our customers. We experienced a mix ofinflation and deflation across product categories during fiscal 2020 and 2019. In the aggregate across all of our legacy businesses and taking into account the mix of products,management estimates our businesses experienced cost inflation of approximately one percent in fiscal 2020. Cost inflation and deflation estimates are based on individual like itemssold during the periods being compared. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflationand deflation on Net sales and Gross profit. Absent any changes in units sold or the mix of units sold, deflation has the effect of decreasing 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 has the effect of decreasingGross profit and the carrying value of inventory.

Business Performance Assessment and Composition of Consolidated Statements of Operations

Net salesOur net sales consist primarily of sales of natural, organic, specialty, produce and conventional grocery and non-food products, and support services to retailers, adjusted for customervolume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by us to customers for shippingand handling and fuel surcharges.

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Cost of sales and Gross profitThe principal components of our cost of sales include the amounts paid to suppliers for product sold, plus the cost of transportation necessary to bring the product to, or move productbetween, our various distribution centers, partially offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products. Cost of salesalso includes amounts incurred by us at our manufacturing subsidiary, Woodstock Farms Manufacturing, for inbound transportation costs. Our gross margin may not be comparable toother similar companies within our industry that may include all costs related to their distribution network in their costs of sales rather than as operating expenses.

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

Restructuring, acquisition and integration expensesRestructuring, acquisition and integration expenses reflect expenses resulting from restructuring activities, including severance costs, change-in-control related charges, facility closureasset impairment charges and costs, stock-based compensation acceleration charges and acquisition and integration expenses. Integration expenses include incremental expenses relatedto combining facilities required to optimize our distribution network as a result of acquisitions.

Interest expense, netInterest expense, net includes primarily interest expense on long-term debt, net of capitalized interest, interest expense on finance and direct finance lease obligations, and amortizationof financing costs and discounts.

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

Adjusted EBITDAOur Consolidated Financial Statements are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). In addition to the GAAPresults, we consider certain non-GAAP financial measures to assess the performance of our business and understand underlying operating performance and core business trends, whichwe 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 andrelated 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 are items that do not reflect management’s assessment of on-going business performance.

We believe Adjusted EBITDA is useful to investors and financial institutions because it provides additional understanding of factors and trends affecting our business, which are used inthe business planning process to understand expected operating performance, to evaluate results against those expectations, and as the primary compensation performance measure undercertain compensation programs and plans. We believe Adjusted EBITDA is reflective of factors that affect our underlying operating performance and facilitate operating performancecomparisons 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 ananalytical 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 financialresults for the foreseeable future. These measurements and items may be different from non-GAAP financial measures used by other companies. Adjusted EBITDA should be reviewedin 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 certainother contractual commitments, finance lease obligation and debt service expenses, income taxes, and any impacts from changes in working capital.

We define Adjusted EBITDA as a consolidated measure inclusive of continuing and discontinued operations results, which we reconcile by adding Net (loss) income from continuingoperations, plus Total other expense, net and (Benefit) provision for income taxes, plus Depreciation and amortization calculated in accordance with GAAP, plus non-GAAPadjustments for Share-based compensation, Restructuring, acquisition and integration related expenses, Goodwill and asset impairment charges, Loss (gain) on sale of assets, certainlegal charges and gains, certain other non-cash charges or items, as determined by management, plus Adjusted EBITDA of discontinued operations calculated in manner consistent withthe results of continuing operations, outlined above.

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Assessment of Our Business Results

The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated. We have revised the following table for the immaterial errorcorrection discussed in Note 20—Immaterial Correction to Prior Period Financial Statements and the presentation of Retail within continuing operations discussed in Note 1—Significant Accounting Policies, both included within Part II, Item 8 of this Annual Report on Form 10-K.

(in thousands)2020

(52 weeks) 2019

(53 weeks) 2018

(52 weeks) 2020

Change 2019

ChangeNet sales $ 26,514,267 $ 22,307,456 $ 10,226,683 $ 4,206,811 $ 12,080,773

Cost of sales 22,639,475 19,098,850 8,706,669 3,540,625 10,392,181

Gross profit 3,874,792 3,208,606 1,520,014 666,186 1,688,592

Operating expenses 3,541,487 2,967,912 1,274,562 573,575 1,693,350

Goodwill and asset impairment charges 425,405 292,770 11,242 132,635 281,528

Restructuring, acquisition and integration related expenses 86,383 148,195 9,738 (61,812) 138,457

Loss (gain) on sale of assets 17,132 (499) — 17,631 (499)

Operating (loss) income (195,615) (199,772) 224,472 4,157 (424,244)

Other expense (income): Net periodic benefit income, excluding service cost (39,177) (35,041) — (4,136) (35,041)

Interest expense, net 191,607 180,789 16,025 10,818 164,764

Other, net (3,591) (1,063) (1,545) (2,528) 482

Total other expense, net 148,839 144,685 14,480 4,154 130,205

(Loss) income from continuing operations before income taxes (344,454) (344,457) 209,992 3 (554,449)

(Benefit) provision for income taxes (90,445) (58,936) 47,215 (31,509) (106,151)

Net (loss) income from continuing operations (254,009) (285,521) 162,777 31,512 (448,298)

(Loss) income from discontinued operations, net of tax (15,202) 898 — (16,100) 898

Net (loss) income including noncontrolling interests (269,211) (284,623) 162,777 15,412 (447,400)

Less net income attributable to noncontrolling interests (4,929) (107) — (4,822) (107)

Net (loss) income attributable to United Natural Foods, Inc. $ (274,140) $ (284,730) $ 162,777 $ 10,590 $ (447,507)

Adjusted EBITDA $ 672,922 $ 562,855 $ 358,866 $ 110,067 $ 203,989

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

(in thousands)2020 

(52 weeks) 2019 

(53 weeks) 2018 

(52 weeks)Net (loss) income from continuing operations $ (254,009) $ (285,521) $ 162,777

Adjustments to continuing operations net income (loss): Less net income attributable to noncontrolling interests (4,929) (107) —

Total other expense, net 148,839 144,685 14,480

(Benefit) provision for income taxes(1) (90,445) (58,936) 47,215

Depreciation and amortization 281,535 247,746 87,631

Share-based compensation 33,689 40,495 25,783

Goodwill and asset impairment charges(2) 425,405 292,770 11,242

Restructuring, acquisition, and integration related expenses(3) 86,383 148,195 9,738

Loss (gain) on sale of assets(4) 17,132 (499) —

Notes receivable charges(5) 12,516 — —

Inventory fair value adjustment(6) — 10,463 —

Legal reserve charge, net of settlement income(7) 1,196 (1,390) —

Other retail expense(8) 1,750 — Adjusted EBITDA of continuing operations 659,062 537,901 358,866

Adjusted EBITDA of discontinued operations(9) 13,860 24,954 —

Adjusted EBITDA $ 672,922 $ 562,855 $ 358,866

(Loss) income from discontinued operations, net of tax(9) $ (15,202) $ 898 $ —

Adjustments to discontinued operations net (loss) income: Total other expense, net (4) 150 —

Benefit for income taxes (4,465) (3,723) —

Other expense — (62) —

Restructuring, store closure and other charges, net(10) 33,531 27,691 —

Adjusted EBITDA of discontinued operations(9) $ 13,860 $ 24,954 $ —

(1) Fiscal 2020 includes the tax benefit from the CARES Act, which includes the impact of tax loss carrybacks to 35% tax years allowed under the CARES Act.(2) Fiscal 2020 primarily reflects a goodwill impairment charge attributable to a reorganization of our reporting units and a sustained decrease in market capitalization and enterprise value of the Company;

resulting in a decline in the estimated fair value of the U.S. Wholesale reporting unit. In addition, this charge includes a goodwill finalization charge attributable to the Supervalu acquisition and an assetimpairment charge. Fiscal 2019 reflects a goodwill impairment charge attributable to the Supervalu acquisition. Refer to Note 7—Goodwill and Intangible Assets in Part II, Item 8 of this Annual Report onForm 10-K for additional information.

(3) Fiscal 2020 primarily reflects Shoppers asset impairment charges, closed property and distribution center impairment charges and costs, and administrative fees associated with integration activities. Fiscal2019 primarily reflects expenses resulting from the acquisition of Supervalu and acquisition and integration expenses, including employee-related costs. Refer to Note 5—Restructuring, Acquisition andIntegration Related Expenses in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

(4) Fiscal 2020 primarily reflects a $50.0 million accumulated depreciation and amortization charge related to the requirement to move Retail from discontinued operations to continuing operations, partiallyoffset by $32.9 million of gains on the sale of distribution centers and other assets.

(5) Reflects reserves and charges for notes receivable issued by the Supervalu business prior to its acquisition to finance the purchase of stores by its customers.(6) Reflects a non-cash charge related to the step-up of inventory values as part of purchase accounting.(7) Reflects a charge to settle a legal proceeding and a charge related to our assessment of legal proceedings, net of income received to settle a legal proceeding.(8) Reflects expenses associated with event-specific damages to certain retail stores.(9) Income from discontinued operations, net of tax and Adjusted EBITDA of discontinued operations excludes rent expense of $5.8 million and $9.5 million in fiscal 2020 and 2019, 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 we remain or expect to remain primarily obligatedunder these leases. We expect to assign these leases with the obligation to pay this rent expense to buyers of our retail discontinued operations upon sale. Due to these GAAP requirements to show rentexpense, along with other administrative expenses of discontinued operations within continuing operations, we believe the inclusion of discontinued operations results within Adjusted EBITDA provides usand investors a meaningful measure of performance.

(10) Amounts represent store closure charges and costs, operational wind-down and inventory charges, and asset impairment charges related to discontinued operations.

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RESULTS OF OPERATIONS

Fiscal year ended August 1, 2020 (fiscal 2020) compared to fiscal year ended August 3, 2019 (fiscal 2019)

Within our results of operations we have estimated the impact of the additional week in fiscal 2019 and the acquisition of Supervalu, where applicable and estimable, to providecomparable financial results on a year-over-year basis. The impact of the 53rd week in fiscal 2019 discussed below represents an estimate of the contribution from the additional week infiscal 2019 and is calculated by taking one-fifth of the respective metrics for the last five-week period, within the 14-week fourth quarter of fiscal 2019. The quantification ofSupervalu’s impact on our results of operations presented below is to discuss the incremental impact of Supervalu, and provide analysis of our underlying business for year-over-yearcomparability purposes. References to legacy company results are presented to provide a comparative results analysis excluding the Supervalu acquired business impacts.

Net Sales

Our net sales by customer channel was as follows (in millions):

2020 

(52 weeks)

% of Total Net Sales

2019(1)

(53 weeks)

% of Total Net Sales

Increase (Decrease)

Customer Channel $ % of Total Net SalesChains(1) $ 10,663 40% $ 8,812 39% $ 1,851 1 %

Independent retailers(1) 6,699 25% 5,536 25% 1,163 — %

Supernatural 4,720 18% 4,394 20% 326 (2)%

Retail 2,331 9% 1,653 7% 678 2 %

Other(1) 2,101 8% 1,912 9% 189 (1)%

Total net sales $ 26,514 100% $ 22,307 100% $ 4,207 — %

(1) During the fourth quarter of fiscal 2020, the presentation of net sales by customer channel has been recast to be presented on a basis consistent with customer size. International customersother than Canada, and alternative format sales continue to be classified within Other. The main effect of the change was to re-categorize the former Supermarkets and Independents channels,previously classified by the majority of product carried by those customers between conventional and natural products, respectively, to classify those stores by the number of customerlocations we supply. There was no impact to the Consolidated Statements of Operations as a result of the reclassification of customer types. We believe this new basis better reflects the natureand economic risks of cash flows from customers. There was no change to the Supernatural channel. Refer to Note 3—Revenue Recognition in Part II, Item 8 of this Annual Report on Form10-K for our channel definitions.

Our net sales for fiscal 2020 increased approximately 19% from fiscal 2019. The increase in net sales for fiscal 2020 was driven by incremental Supervalu net sales from the first quarterof fiscal 2020, as Supervalu was only included in our results for approximately one week in the first quarter of fiscal 2019, of approximately $3,336 million and was partially offset by$475 million from an incremental 53rd week in fiscal 2019. The remaining underlying net sales increased $1,346 million or 6.2%.

Chains net sales increased primarily due to $1,612 million of an incremental 12 weeks of net sales from the acquired Supervalu business, which was partially offset by the estimatedimpact from the 53rd week in fiscal 2019 of $192 million. The remaining increase of $431 million was primarily due to growth in sales to existing customers, including demand forcenter store and natural products driven by customers’ response to the COVID-19 pandemic, partially offset by lower sales from previously lost customers and business prior to thepandemic.

Independent retailers net sales increased primarily due to $971 million of an incremental 12 weeks of net sales from the acquired Supervalu business, which was partially offset by theestimated impact from the 53rd week in fiscal 2019, of $120 million. The remaining increase of $312 million was primarily due to growth in sales to existing customers, includingdemand for center store and natural products driven by customers response to the COVID-19 pandemic, partially offset by lower sales from previously lost customers and stores prior tothe pandemic.

Supernatural net sales increased primarily due to increased sales related to the COVID-19 pandemic, growth in existing and new product categories, and increased sales to existing andnew stores prior to the pandemic, partially offset by the impact of categories that have been adversely impacted by COVID such as bulk and ingredients used for prepared foods and theestimated impact from the 53rd week in fiscal 2019 of $84 million.

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Retail’s net sales increased primarily due to $486 million of an incremental 12 weeks of net sales from the acquired Supervalu business, which was partially offset by the estimatedimpact from the 53rd week in fiscal 2019 of $40 million. The remaining increase of $232 million was driven by increased identical store sales related to the COVID-19 pandemic.

Other net sales increased primarily due to $267 million of an incremental 12 weeks of net sales from the acquired Supervalu business, which was partially offset by the estimated impactfrom the 53rd week in fiscal 2019 of $39 million. The remaining decrease of $39 million is primarily due to a 23% (or $104 million) decline in sales to foodservice customers, whosepurchases slowed due to the COVID-19 pandemic based on their locations being temporarily closed. We expect sales to our foodservice customers in the first half of fiscal 2021 todecrease as compared to fiscal 2020 as a result of the COVID-19 pandemic.

Cost of Sales and Gross Profit

Our gross profit increased $666.2 million or 20.8%, to $3,874.8 million in fiscal 2020, from $3,208.6 million in fiscal 2019. Our gross profit as a percentage of net sales increased to14.61% in fiscal 2020 compared to 14.38% in fiscal 2019. Our gross profit for fiscal 2020 included an incremental 12 weeks of gross profit from the acquired Supervalu businessestimated as approximately $480.2 million and fiscal 2019 included an estimated increase in gross profit from the 53rd week of $68.9 million. The remaining increase in gross profit of$254.9 million was primarily driven by higher Wholesale and Retail sales volume. The 23 basis point increase in gross profit rate was driven by a 92 basis point increase in Retail grossprofit as a percent of its net sales, which was driven by lower promotional activity and contributed to a segment business mix impact that increased overall gross profit rate. Thisincrease was partially offset by a 12 basis point decrease in Wholesale gross profit as a percent of its net sales, and included a decrease due to lower gross profit rates on conventionalproducts.

Operating Expenses

Operating expenses increased $573.6 million, or 19.3%, to $3,541.5 million, or 13.36% of net sales, in fiscal 2020 compared to $2,967.9 million, or 13.30% of net sales, in fiscal 2019.The increase in operating expenses as a percent of net sales was driven by 25 basis points of higher incentive compensation, including temporary COVID-19 compensation expense and13 basis points of higher bad debt expense primarily from customer bankruptcies prior to the pandemic, which were partially offset by 31 basis points of lower other employee costsdriven by lower salaries and benefits expenses. Operating expenses decreased by $64.7 million from the impact of the additional 53rd week in fiscal 2019.

Goodwill and Asset Impairment Charges

During fiscal 2020 we recorded $425.4 million of goodwill and asset impairment charges, which reflects $421.5 million from an impairment charge on the remaining goodwillattributable to the U.S. Wholesale reporting unit, $2.5 million related to purchase accounting adjustments to finalize the opening balance sheet goodwill and $1.4 million of other assetimpairment charges. Refer to the section above Executive Overview—Goodwill Impairment Review and Note 7—Goodwill and Intangible Assets in Part II, Item 8 of this AnnualReport on Form 10-K for additional information.

During fiscal 2019 we recorded a $292.8 million goodwill impairment charge, which reflects the preliminary goodwill impairment based on the preliminary fair value of net assetsassigned, which was finalized in the first quarter of fiscal 2020. The goodwill impairment charge recorded in fiscal 2019 was subject to further change based upon the final purchaseprice allocation during the measurement period for estimated fair values of assets acquired and liabilities assumed from the Supervalu acquisition. The estimates and assumptions weresubject to change during the measurement period (up to one year from the acquisition date).

Restructuring, Acquisition and Integration Related Expenses

Restructuring, acquisition and integration related expenses were $86.4 million for fiscal 2020 and primarily included $41.6 million of integration related costs, $39.9 million of closedproperty reserve charges related to the divestiture of retail banners and $4.9 million of primarily employee related separation costs. Expenses incurred in fiscal 2019 primarily related to$74.4 million of employee related costs and charges due to severance, settlement of outstanding equity awards and benefits costs, $51.2 million of other acquisition and integrationrelated costs and $22.5 million of closed property reserve charges primarily related to the divestiture of retail banners.

We expect to incur additional distribution center integration costs throughout fiscal 2021 related to our operational restructuring to achieve cost synergies and supply chain efficiencieswithin continuing operations.

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Loss (Gain) on Sale of Assets

Loss on sale of assets increased $17.6 million to $17.1 million in fiscal 2020 from a gain on sale of assets of $0.5 million in fiscal 2019. Loss on sale of assets in fiscal 2020 included anaccumulated depreciation and amortization charge of $50.0 million related to the requirement to move Retail from discontinued operations to continuing operations, which was partiallyoffset by gains on sales of distribution centers and a retail accounting services business.

Operating Loss

Reflecting the factors described above, operating loss decreased $4.2 million to an operating loss of $195.6 million for fiscal 2020, from an operating loss of $199.8 million for fiscal2019. The decrease in operating loss was driven by gross profit increases in excess of operating expense increases, lower restructuring, acquisition and integration related expenses,partially offset by a higher goodwill impairment charge and a higher loss on sale of assets.

The fiscal 2020 and 2019 operating losses include $5.8 million and $9.5 million, respectively, of operating lease rent expense and $1.9 million and $4.2 million, respectively, ofdepreciation and amortization expenses related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as weexpect to remain primarily obligated under these leases. In addition, continuing operations operating loss includes certain retail related overhead costs that are related to retail but arerequired to be presented within continuing operations.

Total Other Expense, Net

(in thousands) 2020

(52 weeks) 2019

(53 weeks) Increase (Decrease)Net periodic benefit income, excluding service cost $ (39,177) $ (35,041) $ (4,136)

Interest expense on long-term debt, net of capitalized interest 166,402 146,762 19,640

Interest expense on finance and direct financing lease obligations 11,944 15,730 (3,786)

Amortization of financing costs and discounts 15,383 13,394 1,989

Debt refinancing costs and unamortized financing charges 74 4,903 (4,829)

Interest income (2,196) — (2,196)

Interest expense, net 191,607 180,789 10,818

Other, net (3,591) (1,063) (2,528)

Total other expense, net $ 148,839 $ 144,685 $ 4,154

Net periodic benefit income, excluding service cost reflects the recognition of expected returns on benefit plan assets in excess of interest costs. Net periodic benefit income for fiscal2020 includes $11.3 million of non-cash pension settlement charges primarily from the lump sum pension settlement offering completed in fiscal 2020. Fiscal 2019 net periodic benefitincome reflects a partial year due to the acquisition of Supervalu near the end of the first quarter of fiscal 2019.

The increase in interest expense on long-term debt for fiscal 2020 compared to fiscal 2019 was primarily due to an increase in average outstanding debt driven by the Supervaluacquisition financing executed near the end of the first quarter of fiscal 2019. Interest on finance and direct financing leases decreased primarily due to the adoption of the new leaseaccounting standard, ASC 842, in fiscal 2020. Beginning in the third quarter of fiscal 2020, interest on financing leases includes interest expense related to a distribution center forwhich we executed a purchase option with a delayed purchase provision.

Benefit for Income Taxes

The effective income tax rate for continuing operations was a benefit of 26.3% and 17.1% on pre-tax losses for fiscal 2020 and 2019, respectively. The increase in the benefit rate forfiscal 2020 was primarily driven by the NOL carryback provisions of the CARES Act.

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(Loss) Income from Discontinued Operations, Net of Tax

The results of discontinued operations for fiscal 2020 reflect net sales of $228.5 million for which we recognized $66.4 million of gross profit and a loss from discontinued operations,net of tax of $15.2 million. As noted above, pre-tax loss from discontinued operations excludes $5.8 million of operating lease rent expense related to stores within discontinuedoperations, but for which GAAP requires the expense to be included within continuing operations. In addition, store closure charges related to leases are recorded within continuingoperations. Discontinued operations included $33.5 million of restructuring expenses primarily related to Shoppers store closures expenses related to employee costs and wind-downexpenses, and asset impairment charges. In addition, gross profit of discontinued operations included inventory charges from store closures. As of the end of fiscal 2020, discontinuedoperations consisted of only five Shoppers stores.

Net sales, gross profit and operating expenses of discontinued operations decreased $211.9 million, $61.8 million and $53.4 million, respectively, for the fiscal 2020 as compared tofiscal 2019 primarily due to closed and sold Shoppers stores, results from the Hornbacher’s retail banner, which was sold in December 2019, and the closed Shop ‘n Save East stores,which were partially offset by the partial year in 2019 due to the timing of the Supervalu acquisition.

Refer to the section above Executive Overview—Divestiture of Retail Operations and to Note 19—Discontinued Operations in Part II, Item 8 of this Annual Report on Form 10-K foradditional information regarding these discontinued operations.

Net Loss Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, we incurred a net loss attributable to United Natural Foods, Inc. of $274.1 million, or $5.10 per diluted common share, for fiscal2020, compared to $284.7 million, or $5.56 per diluted common share, for fiscal 2019.

As described in more detail within Note 13—Share-Based Awards in Part II, Item 8 of this Annual Report on Form 10-K, in fiscal 2020 and 2019 we issued approximately 1.3 millionand 2.0 million shares of common stock, respectively, to fund the settlement of time-vesting replacement award obligations from the Supervalu acquisition. We have approximately 1.6million additional shares authorized for issuance and registered on a Registration Statement on Form S-8 filed with the SEC for the issuance in order to satisfy replacement award andoption issuance obligations.

Fiscal year ended August 3, 2019 (fiscal 2019) compared to fiscal year ended July 28, 2018 (fiscal 2018)

The requirement to move Retail to continuing operations in fiscal 2020, resulted in a requirement to revise historical financial information to conform with current period presentation,and as a result the following reflects an updated results of operations discussion for fiscal 2019 compared to fiscal 2018.

Net Sales

Our net sales by customer channel were as follows (in millions):

2019(1) 

(53 weeks)

% of Total Net Sales

2018 

(52 weeks)

% of Total Net Sales

Increase (Decrease)

Customer Channel $ % Total Net SalesChains(1) $ 8,812 39% $ 3,299 32% $ 5,513 7 %

Independent retailers(1) 5,536 25% 2,100 21% 3,436 4 %

Supernatural 4,394 20% 3,758 37% 636 (17)%

Retail 1,653 7% — —% 1,653 7 %

Other(1) 1,912 9% 1,070 10% 842 (1)%

Total net sales $ 22,307 100% $ 10,227 100% $ 12,080 — %

(1) Refer to Note 3—Revenue Recognition in Part II, Item 8 of this Annual Report on Form 10-K for our channel definitions.

Our net sales for fiscal 2019 increased 118% to $22.31 billion from $10.23 billion for fiscal 2018. The increase in net sales for fiscal 2019 was driven by Supervalu net sales ofapproximately $11.40 billion, which included $272 million from the 53rd week in fiscal 2019, the increase in net sales of our Supernatural channel, the remaining company estimatedimpact from the 53rd week of approximately $204 million and an increase in Chains net sales, which were partially offset by decreases in Other and Independent retailers net sales.

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Chains net sales increased primarily due to $5,392 million of net sales from the acquired Supervalu business, including the 53rd week, and the estimated impact from the 53rd week infiscal 2019 on the remaining company of $62 million. The remaining increase of $59 million is primarily due to net sales to existing customers.

Independent retailers net sales increased primarily due to $3,402 million of net sales from the acquired Supervalu business, including the 53rd week, and the estimated impact from the53rd week in fiscal 2019 on the remaining company of $40 million. The remaining decrease was $6 million.

Supernatural net sales increased, which included an estimated impact from the 53rd week of $84 million. The remaining increase in net sales to Whole Foods Market was primarily dueto an increase in same store sales, which have continued following its acquisition by Amazon.com, Inc. in August 2017, coupled with growth in new product categories, most notablythe health, beauty and supplement categories, and increased sales from new stores.

Retail’s net sales increased solely due to $1,653 million of net sales from the acquired Supervalu business.

Other net sales increased primarily due to $947 million of net sales from the acquired Supervalu business, including the 53rd week, and the estimated impact from the 53rd week on theremaining company in fiscal 2019 of $18 million. The remaining decrease of $123 million is primarily due to sales declines driven by our e-commerce business and lack of sales fromEarth Origins, which was disposed in the fourth quarter of fiscal 2018.

Cost of Sales and Gross Profit

Our gross profit increased $1,688.6 million, or 111.1%, to $3,208.6 million in fiscal 2019, from $1,520.0 million in fiscal 2018. Our gross profit as a percentage of net sales was 14.38%in fiscal 2019 compared to 14.86% in fiscal 2018. Our gross profit for fiscal 2019 included 41 weeks of gross profit from the acquired Supervalu business of approximately $1,639.9million, net of its related LIFO inventory charge, and an estimated increase in gross profit from the 53rd week of $28.0 million on the legacy company results. In addition, our legacycompany Wholesale business gross profit decreased from a LIFO charge of $15.0 million in fiscal 2019, and from cycling the fiscal 2018 gross profit from a change in accountingestimate benefit of $20.9 million. The remaining increase in gross profit of $56.6 million was driven by the sales growth from the Supernatural channel relative to the other customerchannels and lower inbound freight expense. The decrease in gross profit rate was primarily due to the impact of the acquired Supervalu business.

Total Gross profit increased by $68.9 million from the impact of the additional 53rd week. The adoption of the LIFO inventory costing method decreased our fiscal 2019 Gross profit by$25.4 million or 11 basis points.

Refer to Note 1—Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K and below under the heading Net (Loss) Income Attributable to United NaturalFoods, Inc. for additional information regarding the impact of a change in estimate for the gross profit impact of $20.9 million recorded during fiscal 2018.

Operating Expenses

Operating expenses increased $1,693.4 million, or 132.9%, to $2,967.9 million, or 13.30% of net sales, in fiscal 2019 compared to $1,274.6 million, or 12.46% of net sales, in fiscal2018. The increase in operating expenses as a percentage of net sales was primarily driven by the mix impact from the acquired Supervalu business, including higher Retail costsincluding employee and occupancy costs, and the impact of higher depreciation and amortization expense of 25 basis points on total company results, partially offset by loweradministrative employee costs, including the impact of cost synergies and lower incentive compensation costs, excluding stock-based compensation. Operating expenses increased by$64.7 million from the impact of the additional 53rd week in fiscal 2019.

Goodwill and Asset Impairment Charges

During fiscal 2019 we recorded a $292.8 million goodwill impairment charge, which reflects the preliminary goodwill impairment charge based on the preliminary fair value of netassets assigned. The goodwill impairment charge recorded in fiscal 2019 was subject to further change based upon the final purchase price allocation during the measurement period forestimated fair values of assets acquired and liabilities assumed from the Supervalu acquisition. The estimates and assumptions were subject to change during the measurement period (upto one year from the acquisition date).

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During fiscal 2018, the Company made the decision to close three non-core, under-performing stores of its total of twelve Earth Origins stores. Based on this decision, coupled with thedecline in results in the first half of fiscal 2018 and the future outlook as a result of competitive pressure, the Company determined that both a test for recoverability of long-lived assetsand a goodwill impairment analysis should be performed. The determination of the need for a goodwill analysis was based on the assertion that it was more likely than not that the fairvalue of the reporting unit was below its carrying amount. As a result of both these analyses, the Company recorded a total impairment charge of $3.4 million on long-lived assetsand $7.9 million to goodwill, respectively, during the second quarter of fiscal 2018. During the fourth quarter of fiscal 2018 the Company disposed of its Earth Origins retail business.

Restructuring, Acquisition and Integration Related Expenses

Restructuring, acquisition and integration related expenses were $148.2 million for fiscal 2019 and primarily included $74.4 million of employee related costs and charges due toseverance, settlement of outstanding equity awards and benefits costs, $51.2 million of other acquisition and integration related costs and $22.5 million of closed property reservecharges related to the divestiture of retail banners. Expenses incurred in fiscal 2018 primarily related to $5.0 million of acquisition related costs associated with the Supervalu acquisitionand $4.8 million charges related to the exit of our Earth Origins Market business.

Operating (Loss) Income

Reflecting the factors described above, operating income decreased approximately $424.2 million to an operating loss of $199.8 million for fiscal 2019, from operating income of$224.5 million for fiscal 2018. As a percentage of net sales, operating loss was 0.90% for fiscal 2019, compared to operating income of 2.19% for fiscal 2018. The decrease in operatingincome was driven by higher Goodwill and asset impairment charges, higher Restructuring, acquisition and integration related expenses, higher Operating expenses, including higherdepreciation and amortization expense, and the change in accounting estimate benefit from last year, which were offset in part by higher Gross profit, excluding the change inaccounting estimate discussed above.

The fiscal 2019 operating loss includes $9.5 million of operating lease rent expense and $4.2 million of depreciation and amortization expenses related to stores within discontinuedoperations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. In addition, continuingoperations operating loss includes certain retail related overhead costs that are related to retail but are required to be presented within continuing operations.

Total Other Expense, Net

(in thousands) 2019

(53 weeks) 2018

(52 weeks) Increase (Decrease)Net periodic benefit income, excluding service cost $ (35,041) $ — $ (35,041)

Interest expense on long-term debt, net of capitalized interest 146,762 14,016 132,746

Interest expense on finance and direct financing lease obligations 15,730 2,455 13,275

Amortization of financing costs and discounts 13,394 — 13,394

Debt refinancing costs and unamortized financing charges 4,903 — 4,903

Interest income — (446) 446

Interest expense, net 180,789 16,025 164,764

Other, net (1,063) (1,545) 482

Total other expense, net $ 144,685 $ 14,480 $ 130,205

Net periodic benefit income, excluding service cost reflects the recognition of expected returns on benefit plan assets in excess of interest costs. The increase in interest expense on long-term debt was primarily due to an increase in outstanding debt year-over-year driven by Supervalu acquisition financing. The increase in interest on capital and direct financing leasesprimarily reflects lease obligations related to retail stores of discontinued operations acquired in the Supervalu acquisition, but for which GAAP requires the expense to be includedwithin continuing operations, as we expect to remain primarily obligated under these leases. As a result of the Supervalu acquisition, we assumed defined benefit pension and otherpostretirement benefit obligations.

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(Benefit) Provision for Income Taxes

Our effective income tax rate for continuing operations was 17.1% and 22.5% for fiscal 2019 and 2018, respectively. The fiscal 2019 effective tax rate reflects a tax benefit based on aconsolidated pre-tax loss from continuing operations while fiscal 2018 reflected a tax expense on pre-tax income. The fiscal 2018 effective income tax rate was primarily driven by anon-cash net tax benefit of $21.7 million related to the impact of the re-measurement of the U.S. net deferred tax liabilities due to tax reform. For fiscal 2019, the effective income taxrate captures the full impact of the reduced federal tax rate, as well as tax cost associated with stock compensation payments not expected to be deductible in under the Section 162(m)tax reform rules and the impact of non-deductible goodwill impairment charges recorded in fiscal 2019.

Income from Discontinued Operations, Net of Tax

The results of operations for fiscal 2019 reflect net sales of $440.5 million for which we recognized $128.3 million of gross profit and Income from discontinued operations, net of taxof $0.9 million. As noted above, pre-tax income from discontinued operations excludes operating lease rent expense related to stores within discontinued operations, but for whichGAAP requires the expense to be included within continuing operations. In addition, store closure charges related to leases are recorded within continuing operations. Discontinuedoperations included $24.9 million of restructuring expenses primarily related to employee severance and store closure charges. In addition, gross profit of discontinued operationsincluded inventory charges from store closures.

Net (Loss) Income Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, we incurred a net loss attributable to United Natural Foods, Inc. of $284.7 million, or $5.56 per diluted share, for fiscal 2019,compared to net income of $162.8 million, or $3.20 per diluted share, for fiscal 2018.

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 withinNote 17—Business Segments within Part II, Item 8 of this Annual Report on Form 10-K and the above table within the Executive Overview section. The following tables set forth Netsales and Adjusted EBITDA by segment for the periods indicated.

Increase / (Decrease)

(in thousands) 2020 

(52 weeks) 2019 

(53 weeks) 2018

(52 weeks) 2020 2019

Net sales: Wholesale $ 25,496,597 $ 21,530,183 $ 10,169,840 $ 3,966,414 $ 11,360,343

Retail 2,330,694 1,653,596 — 677,098 1,653,596

Other 227,984 234,838 228,465 (6,854) 6,373

Eliminations (1,541,008) (1,111,161) (171,622) (429,847) (939,539)

Total Net sales $ 26,514,267 $ 22,307,456 $ 10,226,683 $ 4,206,811 $ 12,080,773

Continuing operations Adjusted EBITDA: Wholesale $ 591,028 $ 462,996 $ 343,104 $ 128,032 $ 119,892

Retail 86,401 34,149 — 52,252 34,149

Other (15,903) 41,918 12,337 (57,821) 29,581

Eliminations (2,464) (1,162) 3,425 (1,302) (4,587)

Total continuing operations Adjusted EBITDA $ 659,062 $ 537,901 $ 358,866 $ 121,161 $ 179,035

Net Sales

Wholesale’s net sales increase in fiscal 2020 as compared to fiscal 2019 was driven by an incremental 12 weeks of net sales from the acquired Supervalu business of approximately$3,118 million and was partially offset by $455 million from an incremental 53rd week in fiscal 2019, with the remaining increase primarily due to growth in sales to existing customersin the Chains, Supernatural and Independent retailers channels. Sales growth was primarily driven by demand for center store and natural products from customers response to theCOVID-19 pandemic, and was partially offset by lower sales from previously lost customers and stores prior to the pandemic.

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Retail’s net sales increase for fiscal 2020 as compared to fiscal 2019 is primarily due to $486 million of an incremental 12 weeks of net sales from the acquired Supervalu business,which was partially offset by the estimated impact from the 53rd week in fiscal 2019 of $40 million. The remaining increase was driven by increased identical store sales related to theCOVID-19 pandemic. All Retail net sales related to the acquired Supervalu business.

The increase in net sales eliminations in fiscal 2020 and 2019 was primarily due to an increase in Wholesale sales to Retail resulting from the acquired Supervalu retail business, whichare eliminated upon consolidation.

Wholesale’s net sales increase in fiscal 2019 as compared to fiscal 2018 was driven by Supervalu net sales of approximately $10.65 billion, which included $252 million from the 53rdweek in fiscal 2019, with the remaining increase primarily driven by net sales of our Supernatural channel, the remaining company estimated impact from the 53rd week ofapproximately $204 million and an increase in Chains net sales, which were partially offset by decreases in Other and Independent retailers net sales.

Retail’s net sales increase for fiscal 2019 as compared to fiscal 2018 was driven by Supervalu net sales of approximately of $1,653 million, which included $40 million from the 53rdweek in fiscal 2019.

Adjusted EBITDA

Wholesale’s Adjusted EBITDA increased 28% in fiscal 2020 as compared to fiscal 2019. The increase was driven by leveraged sales growth, particularly in the second half of fiscal2020 from increases in food-at-home purchases that drove sales to our customers, an incremental 12 weeks of Adjusted EBITDA from the acquired Supervalu business. Gross profitdollar growth for fiscal 2020 was $469.3 million with a gross profit rate decrease of approximately 12 basis points, which outpaced operating expense increases, excluding depreciationand amortization and stock-based compensation, of $341.3 million. Operating expense rate decrease of approximately 29 basis points primarily driven by lower trucking expense,partially offset by higher temporary incentive pay and operating costs related to the COVID-19 pandemic and higher bad debt expense prior to the COVID-19 pandemic. Wholesaledepreciation expense increased $39.3 million to $267.2 million due to an incremental 12 weeks of depreciation and amortization expense from the Supervalu acquisition.

Retail’s Adjusted EBITDA increased 153% in fiscal 2020 as compared to fiscal 2019. The increase was driven by higher sales volume from the impacts of the COVID-19 pandemic andthe incremental 12 weeks of Adjusted EBITDA from the acquired Supervalu business, fixed and variable cost leveraging and lower promotional activity. Gross profit dollar growth forfiscal 2020 was $197.3 with gross profit rate increasing 92 basis points from lower promotional activity. Operating expense growth of $140.2 million with an operating expense ratedecrease of 92 basis points driven by variable cost leveraging partially offset by higher temporary incentive pay and operating costs related to the COVID-19 pandemic. Retaildepreciation and amortization expense for fiscal 2020 and 2019 relate to finance lease amortization expense associated with leases previously amortizing in continuing operations asthey were not previously classified as held for sale. Starting in the first quarter of fiscal 2021, we expect we will start recording depreciation and amortization expense related to theassets previously classified as held for sale that were moved to continuing operations, as the majority of Retail’s assets were not subject to depreciation and amortization expense.

Other Adjusted EBITDA decreased 138% in fiscal 2020 primarily due to higher incentive compensation costs.

Wholesale’s Adjusted EBITDA increased 35% in fiscal 2019 as compared to fiscal 2018 primarily due to the acquired Supervalu Wholesale business, which reflected 41 weeks ofresults, and growth in the legacy Wholesale business driven by higher sales. Gross profit dollar growth for fiscal 2019 was $1,252.9 million, of which $1,176.3 million was attributableto the acquired Supervalu business. Operating expense, excluding depreciation and amortization and stock-based compensation, dollar growth for fiscal 2019 was $1,133.1 million, ofwhich $988.8 million was attributable to the acquired Supervalu business. Wholesale’s depreciation and amortization expense increased $143.0 million to $227.9 million in fiscal 2019.

All of the increase in Retail’s Adjusted EBITDA in fiscal 2019 as compared to fiscal 2018 resulted from the acquired Supervalu retail business, which reflected 41 weeks of results.Retail did not have any depreciation expense that was attributed to it because of its previous held for sale status.

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LIQUIDITY AND CAPITAL RESOURCES

Highlights

• Total liquidity as of August 1, 2020 was $1.28 billion and was comprised of the following:◦ Unused credit under our revolving line of credit was $1,234.8 million as of August 1, 2020, which increased $315.6 million from $919.2 million as of August 3, 2019,

primarily due to net payments made on the ABL Credit Facility as cash flow generated from the business was utilized to reduce outstanding debt.◦ Cash and cash equivalents was $47.0 million as of August 1, 2020, which increased $2.5 million from $44.5 million as of August 3, 2019.

• Our total debt decreased $408.9 million to $2,497.6 million as of August 1, 2020 from $2,906.5 million as of August 3, 2019 primarily related net payments made on the ABLCredit Facility and our 364-day Term Loan Facility payment.

• In fiscal 2021, we are obligated to make a $72.0 million prepayment from Excess Cash Flow (as defined in the Term Loan Agreement) generated in fiscal 2020, which wesatisfied with a $72.0 million payment in the first quarter of fiscal 2021. Other debt maturities are expected to be $12.8 million in fiscal 2021. We are also obligated to makepayments to reduce finance lease obligations. Proceeds from the sale of any properties mortgaged and encumbered under our Term Loan Facility are required to, and will, beused to make additional Term Loan Facility payments.

• We expect to continue to annually reduce our long-term debt and be able to fund near-term debt maturities through fiscal 2023 with internally generated funds, proceeds fromthe asset sales or borrowings under the ABL Credit Facility.

• Working capital decreased $115.1 million to $1,334.8 million as of August 1, 2020 from $1,450.0 million as of August 3, 2019, primarily due to the adoption of the new leasestandard from the recognition of a new current portion liability for operating leases, an increase in accounts payable, partially offset by increases in inventories to supporthigher service levels and accounts receivable from higher sales.

Sources and Uses of Cash

We expect to continue to replenish operating assets and pay down debt obligations with internally generated funds and sale of surplus and/or non-core assets. A significant reduction inoperating 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 indebtednessas planned. Our credit facilities are secured by a substantial portion of our total assets.

Our primary sources of liquidity are from internally generated funds and from borrowing capacity under our credit facilities. Our short-term and long-term financing abilities arebelieved to be 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, financialposition and credit ratings.

Primary uses of cash include debt service, capital expenditures, working capital maintenance and income tax payments. We typically finance working capital needs with cash providedfrom 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, and have no current plans to do so. In addition, we are limited in the aggregate amount of dividends that we may pay underthe terms of our Term Loan Facility and our ABL Credit Facility. Subject to certain limitations contained in our debt agreements and as market conditions warrant, we may from time totime 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 debtsecurities.

Long-Term Debt

During fiscal 2020, we repaid a net $323.3 million under the ABL Credit Facility and repaid $91.9 million of scheduled maturities and voluntary prepayments under the Term LoanFacility. Refer to Note 10—Long-Term Debt in Part II, Item 8 of this Annual Report on Form 10-K for a detailed discussion of the provisions of our credit facilities and certain long-term debt agreements and additional information.

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Our Term Loan Agreement does not include any financial maintenance covenants. Our ABL Loan Agreement subjects us to a fixed charge coverage ratio (as defined in the ABL LoanAgreement) of at least 1.0 to 1.0 calculated at the end of each of our fiscal quarters on a rolling four quarter basis, when the adjusted aggregate availability (as defined in the ABL LoanAgreement) is ever less than the greater of (i) $235.0 million and (ii) 10% of the aggregate borrowing base. We have not been subject to the fixed charge coverage ratio covenant underthe ABL Loan Agreement, including through the filing date of this Annual Report. The ABL Loan Agreement and the Term Loan Agreement contain certain customary operational andinformational covenants. If we fail to comply with any of these covenants, we may be in default under the applicable loan agreement, and all amounts due thereunder may becomeimmediately due and payable.

The following chart outlines our scheduled debt maturities by fiscal year, which excludes debt prepayments that may be required from proceeds from sales of mortgaged properties and,for periods beyond fiscal 2021, prepayments that may be required by Excess Cash Flow (as defined in the Term Loan Agreement).

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 overall strategy to manage our debt portfolio toachieve 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 relatedunderlying exposures and do not constitute positions independent of those exposures.

As of August 1, 2020, we had an aggregate of $1.99 billion of notional debt hedged through pay fixed and receive floating interest rate swap contracts to effectively fix the LIBORcomponent of our floating LIBOR based debt at fixed rates ranging from 0.454% to 2.959%, with maturities between October 2020 and October 2025. The fair value of these interestrate derivatives represents a total net liability of $138.7 million and are subject to volatility based on changes in market interest rates. See Note 9—Derivatives in Part II, Item 8 and —Interest Rate Risk within Item 7A of this Annual Report on Form 10-K for additional information.

From time-to-time, we enter into fixed price fuel supply agreements and foreign currency hedges. As of August 1, 2020, we had fixed price fuel contracts outstanding and foreigncurrency forward agreements outstanding. Gains and losses and the financial position in these arrangements are insignificant.

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Capital Expenditures

Our capital expenditures for fiscal 2020 were $172.6 million, compared to $228.5 million for fiscal 2019, a decrease of $55.9 million primarily driven by lower distribution centerexpansion investments in fiscal 2020 compared to 2019. Fiscal 2020 principally includes capital expenditures for distribution center expansions, primarily in Ridgefield, WA andMoreno Valley, CA, as well as information technology, and equipment. Fiscal 2021 capital spending is expected to be in the range of $200.0 million to $250.0 million and includeprojects that optimize and expand our distribution network and our technology platform. Longer term, capital spending is expected to be at or below 1.0% of net sales. We expect tofinance requirements with cash generated from operations and borrowings under our ABL Credit Facility. Future investments may be financed through long-term debt or borrowingsunder our ABL Credit Facility.

The following chart outlines our capital expenditures by type over the last three fiscal years.

Cash Flow Information

The following summarizes our Consolidated Statements of Cash Flows:

(in thousands)2020 

(52 weeks) 2019 

(53 weeks) 2018 

(52 weeks) 2020 Change

2019 Change

Net cash provided by operating activities of continuing operations $ 452,365 $ 288,986 $ 109,038 $ 163,379 $ 179,948

Net cash used in investing activities of continuing operations (27,684) (2,340,830) (47,005) 2,313,146 (2,293,825)

Net cash (used in) provided by financing activities (453,071) 1,996,352 (53,557) (2,449,423) 2,049,909

Net cash flows from discontinued operations 30,389 77,587 — (47,198) 77,587

Effect of exchange rate on cash (154) (143) (575) (11) 432

Net increase in cash and cash equivalents 1,845 21,952 7,901 (20,107) 14,051

Cash and cash equivalents, at beginning of period 45,267 23,315 15,414 21,952 7,901

Cash and cash equivalents at end of period, including discontinued operations $ 47,112 $ 45,267 $ 23,315 $ 1,845 $ 21,952

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Fiscal 2020 compared to Fiscal 2019

The increase in net cash provided by operating activities of continuing operations was primarily due to higher amounts of cash provided in fiscal 2020 related to higher earnings beforethe goodwill impairment charges and depreciation and amortization expense, cash received from income taxes in fiscal 2020 compared to cash paid for income taxes in fiscal 2019, andlower payments for assumed liabilities and transaction costs, which were partially offset by uses of cash to build inventory. In fiscal 2019, we benefited from the reduction of theseasonally high levels of inventory and accounts receivable at the time of the Supervalu acquisition; however, these cash inflows were offset in part by decreases from cash paymentsmade in fiscal 2019 for assumed liabilities and the payment of transaction costs from the Supervalu acquisition, including transaction-related expenses, accrued employee costs, andrestructuring costs associated with reductions in force.

The decrease in net cash used in investing activities of continuing operations was primarily due to $2,292.4 million of cash paid to purchase Supervalu in fiscal 2019 and $55.9 millionof lower cash payments for capital expenditures, partially offset by $33.0 million of less cash received from the sale of property and equipment, primarily due to lower cash receivedfrom the sale of distribution centers. In fiscal 2019, we received cash from the sale and leaseback of two distribution centers, one of which was a shorter-term lease related to the exit ofthat facility. In fiscal 2020, we received cash proceeds from the sale of five distribution centers, one of which contained a shorter-term leaseback related to the exit of that facility.

The decrease in net cash provided by financing activities of continuing operations was primarily due to fiscal 2019 borrowings on long-term debt to finance the Supervalu acquisition,and a net decrease in cash provided by the revolving credit facility borrowings of $1,193.1 million, which was driven by borrowings to finance the Supervalu acquisition in fiscal 2019,offset in part by net payments made in fiscal 2020 from operating activities cash flows in excess of investing activities. These decreases in cash provided by financing activities, wereoffset in part by a decrease in payments of long-term debt and finance lease obligations of $657.6 million driven by the repayment of acquired senior notes in fiscal 2019 and $62.6million of payments for debt issuance costs in fiscal 2019.

Net cash flows from discontinued operations primarily include investing activity cash flows from asset sales and operating activity cash flow from operating income of the retail disposalgroups. The decrease in net cash flows from discontinued operations is primarily due to higher proceeds received in fiscal 2019 related to the sale of retail locations, includingHornbacher’s, than proceeds received in fiscal 2020, including proceeds from the sale of a former dedicated retail distribution center and retail stores.

Fiscal 2019 compared to Fiscal 2018

The increase in net cash provided by operating activities of continuing operations was primarily due to higher amounts of cash utilized in fiscal 2018 in inventory acquisition and creditextension to meet increased product demand and our service level agreements and cash provided in fiscal 2019 by the reduction of inventory, including cash inflows from the reductionof Supervalu inventory since the acquisition date, as the acquisition occurred at a time when inventories were seasonally high. These increases were offset in part by cash utilized inpayments of assumed liabilities from the Supervalu acquisition, including transaction-related expenses, accrued employee costs, and restructuring costs associated with reductions inforce, higher cash paid for interest expense, higher cash utilized to reduce accounts payable primarily related to inventory reductions, and higher cash paid for taxes including a $59million cash tax payment related to the Supervalu acquisition.

The increase in net cash used in investing activities of continuing operations was primarily due to $2,292.4 million paid for the Supervalu acquisition and an increase of $183.9 millionin cash utilized for capital expenditures, partially offset by cash received from the sale and leaseback of two distribution centers, and the sale of two surplus facilities, for aggregateproceeds of $172.5 million.

The increase in net cash provided by financing activities of continuing operations was primarily due to borrowings on long-term debt of $1,926.6 million to finance the Supervaluacquisition, a net increase in revolving credit facility borrowings of $883.4 million, including payments to finance the Supervalu acquisition, the absence of cash utilized to repurchasecommon stock in fiscal 2019 compared to $24.2 million in fiscal 2018, an increase in proceeds from the issuance of common stock in fiscal 2019 of $23.0 million, and other borrowingsof $22.4 million in fiscal 2019, partially offset by an increase in repayments of long-term debt and capital lease obligations of $767.8 million, including the repayment of the SupervaluSenior Notes, payments for debt financing costs of $62.6 million.

Net cash flows from discontinued operations primarily include investing activity cash inflows from the sale of Hornbacher’s, a surplus distribution center, and surplus retail stores, andoperating activity cash flow from operating income, partially offset by capital expenditures of discontinued operations.

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Other

On October 6, 2017, we announced that our Board of Directors authorized a share repurchase program for up to $200.0 million of our outstanding common stock. The repurchaseprogram is scheduled to expire upon our repurchase of shares of our common stock having an aggregate purchase price of $200.0 million. We did not repurchase any shares of ourcommon stock in fiscal 2020 or 2019 pursuant to the share repurchase program. As of August 1, 2020, we have $175.8 million remaining authorized under the share repurchaseprogram. We do not expect to purchase shares under the share repurchase program during fiscal 2021. Additionally, our ABL Credit Facility and Term Loan Facility contain terms thatlimit our ability to repurchase of common stock above certain levels unless certain conditions and financial tests are met.

We no longer intend to indefinitely reinvest accumulated earnings in our Canada operations. Accordingly, we have recorded the tax impacts of this treatment (a tax benefit of $0.6million due to the foreign exchange loss on previously taxed income) in fiscal 2019.

Pension and Other Postretirement Benefit Obligations

We contributed $16.1 million and $2.6 million to our defined benefit pension and other postretirement benefit plans, respectively, in fiscal 2020. In fiscal 2021, no minimum pensioncontributions are required to be made under the Unified Grocers, Inc. Cash Balance Plan or the SUPERVALU Retirement Plan under Employee Retirement Income Security Act of1974, as amended (“ERISA”). The Company expects to contribute approximately $0 million to $5.3 million to its defined benefit pension plans and postretirement benefit plans in fiscal2021. We fund our defined benefit pension plans based on the minimum contribution amount required under ERISA, the Pension Protection Act of 2006 and other applicable laws, asdetermined by us, including our external actuarial consultant, and additional contributions made at our discretion. We may accelerate contributions or undertake contributions in excessof 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 relativeattractiveness 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 PensionBenefit Guaranty Corporation variable rate premiums or in order to achieve exemption from participant notices of underfunding.

Lump Sum Pension Settlement Offering

On August 1, 2019, the Company amended the SUPERVALU Retirement Plan to provide for a lump sum settlement window. On August 2, 2019, the Company sent plan participantslump sum settlement election offerings that committed the plan to pay certain deferred vested pension plan participants and retirees, who make such an election, a lump sum payment inexchange for their rights to receive ongoing payments from the plan. The lump sum payment amounts are equal to the present value of the participant’s pension benefits, and were madeto certain former (i) retired associates and beneficiaries who are receiving their monthly pension benefit payment and (ii) terminated associates who are deferred vested in the plan, hadnot yet begun receiving monthly pension benefit payments and who are not eligible for any prior lump sum offerings under the plan. Benefit obligations associated with the lump sumoffering have been incorporated into the funded status utilizing the actuarially determined lump sum payments based on offer acceptances. The plan made aggregate lump sumsettlement payments of $690.0 million to plan participants during fiscal 2020. The lump sum settlement payments resulted in non-cash pension settlement charge of $11.3 million infiscal 2020 from the acceleration of a portion of the accumulated unrecognized actuarial loss, which was based on the fair value of SUPERVALU Retirement Plan assets and remeasuredliabilities. As a result of the settlement payments reported in the second quarter of fiscal 2020, the SUPERVALU Retirement Plan obligations were remeasured using a discount rate of3.1 percent and the MP-2019 mortality improvement scale. This remeasurement resulted in a $1.5 million decrease to Accumulated other comprehensive loss.

CRITICAL ACCOUNTING POLICIES AND 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, andthe related disclosure of contingent assets and liabilities. Management believes the following critical accounting policies reflect our more subjective or complex judgments and estimatesused in the preparation of our Consolidated Financial Statements.

Inventories

Inventories are valued at the lower of cost or market. Substantially all of our inventory consists 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.

Prior to fiscal 2019, we determined inventory cost using the first-in, first-out (“FIFO”) method. For a substantial portion of legacy Supervalu inventory, cost was determined using theLIFO method, with the rest primarily determined using FIFO. Inventories acquired as part of the Supervalu acquisition were recorded at their fair market values as of the acquisitiondate. During the second quarter of fiscal 2019, we completed our evaluation of our combined inventory accounting policies and changed our method of inventory costing for certainhistorical United Natural Foods, Inc. inventory from the FIFO accounting method to the LIFO accounting method. We concluded that the LIFO method of inventory costing ispreferable because it allows for better matching of costs and revenues, as historical inflationary inventory acquisition prices are expected to continue in the future and the LIFO methoduses the current acquisition cost to value cost of goods sold as inventory is sold. Additionally, LIFO allows for better comparability of the results of our operations with those of similarcompanies in our peer group. If the first-in, first-out method had been used, Inventories, net would have been higher by approximately $43.3 million and $25.4 million for fiscal 2020and 2019, respectively. As of August 1, 2020, approximately $1.8 billion inventory was valued under the LIFO method and primarily included grocery, frozen food and generalmerchandise products, with the remaining inventory valued under the FIFO method and primarily included meat, dairy and deli products.

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 sell-through of the related products. Wereceive 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 ourstores; supporting the introduction of new products into our stores and distribution centers; exclusivity rights in certain categories; and to compensate for temporary price reductionsoffered to customers on products held for sale. We also receive vendor funds for buying activities such as volume commitment rebates, credits for purchasing products in advance oftheir need and cash discounts for the early payment of merchandise purchases. The majority of the vendor fund contracts have terms of less than a year, although some of the contractshave 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 identifiablebenefit has been provided to the vendor, in which case the related amounts are recognized within Net sales and represent less than one half of one percent of total Net sales. Vendorfunds 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 arerecognized 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 andestimates. Management determines these amounts based on estimates of current year purchase volume using forecast and historical data, and a review of average inventory turnoverdata. 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 believeour 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 changeswere 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 wouldconsider changing the volume, type and frequency of the advertising, which could increase or decrease our advertising expense.

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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 plansare generally based on each participant’s years of service, compensation, and age at retirement or termination. Our defined benefit pension plans and certain supplemental executiveretirement plans were closed to new participants and service crediting.

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 methodologiesor 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 certainactuarial assumptions used in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and therates of increase in compensation and healthcare costs. We measure our defined benefit pension and other postretirement plan obligations as of the nearest calendar month end. Referto Note 14—Benefit Plans in Part II, Item 8 of this Annual Report on Form 10-K for information related to the actuarial assumptions used in determining pension and postretirementhealthcare liabilities and expenses.

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 theassociated 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 wouldproduce cash flows sufficient in timing and amount to settle projected future benefits.

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 returnand risk assumptions by asset class, and historical long-term investment performance. The assumed long-term rate of return on pension assets ranged from 5.50 percent to 5.75percent for fiscal 2020. The 10-year rolling average annualized return for a portfolio of investments applied in a manner consistent with our target allocations have generated averagereturns of approximately 7.10 percent based on returns from 2011 to 2020. In accordance with GAAP, actual results that differ from our assumptions are accumulated and amortizedover future periods and, therefore, affect expense and obligations in future periods.

Each 25 basis point reduction in the discount rate would increase the postretirement benefit obligation by $73 million, as of August 1, 2020, and for fiscal 2021 would decrease pensionexpense by approximately $3.9 million and each 25 basis point reduction in expected return on plan assets would increase pension expense by approximately $4.9 million. Similarly, forpostretirement benefits, a 100 basis point increase in the healthcare cost trend rate would increase the accumulated postretirement benefit obligation by approximately $0.8 million as ofthe end of fiscal 2020 and would increase service and interest cost for fiscal 2021 by less than $0.1 million. Conversely, a 100 basis point decrease in the healthcare cost trend rate woulddecrease the accumulated postretirement benefit obligation as of the end of fiscal 2020 by approximately $0.7 million and would decrease service and interest cost for fiscal 2021 by lessthan $0.1 million.

We recognize the amortization of net actuarial loss on the SUPERVALU Retirement Plan and the Unified Grocers Inc. Cash Balance Plan over the remaining life expectancy of inactiveparticipants 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 inactiveparticipants, we utilized an over approximately 90 percent threshold established under our policy.

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 postretirementbenefit 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 spotrates 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 benefitplans. 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 moreprecise measurement of interest and service costs.

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Business dispositions

The Company reviews the presentation of planned business dispositions in the Consolidated Financial Statements based on the available information and events that have occurred. Thereview 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 ofthe 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 dispositionrepresents 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 forsale. 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 thebusiness and the expected disposition of the business within one year. When a business is classified as held for sale, the Company evaluates each reporting period whether it continues tomeet the criteria as held for sale.

Planned business dispositions are presented as discontinued operations when all the criteria described above are met. Operations of the business components meeting the discontinuedoperations requirements are presented within Income from discontinued operations, net of tax in the Consolidated Statements of Operations, and assets and liabilities of the businesscomponent planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets.

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 businessclassified 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 livedintangible 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 tosell, and no additional depreciation or amortization expense is recognized. Acquired businesses are evaluated for certain criteria to be classified as held for sale, and if so, are reported attheir fair value less costs to sell as of the acquisition date and subsequently adjusted each reporting period.

Judgments and estimates utilized to determine whether impairment charges exist include the review of the business units fair value, which may occur under the income and marketapproaches and include forecasted revenues, operating expenses, income tax expenses, depreciation and amortization expenses and discount rates. In addition, we evaluate therecognition of other charges and costs, including potential multiemployer plan withdrawal charges. The sale of a business can result in the recognition of a gain or loss that differs fromthat anticipated prior to closing. See Note 19—Discontinued Operations in Part II, Item 8 of this Annual Report on Form 10-K for the carrying value of discontinued operations held forsale assets and liabilities and additional information.

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 beenincurred 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 unpredictableexternal factors affecting litigation trends, benefit level changes and claim settlement patterns. If actual claims incurred are greater than those anticipated, our reserves may beinsufficient and additional costs could be recorded in our Consolidated Financial Statements. Accruals for workers’ compensation, general and automobile liabilities totaled $100.7million and $88.8 million as of August 1, 2020 and August 3, 2019, respectively.

Valuation of assets and liabilities acquired in a business combination

We account for acquired businesses using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition attheir respective estimated fair values. Goodwill represents the excess of consideration transferred over the fair value of net assets acquired in a business combination. The judgmentsmade in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as the estimated useful life of each asset, can materially impact thenet income of the periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in thefuture. During the measurement period, purchase price allocation changes that impact the carrying value of goodwill effects any measurement of goodwill impairment that was takenduring the time period. In fiscal 2019, we recorded a goodwill impairment charge related to the Supervalu distribution reporting unit in a period in which the purchase price allocationhad not been completed. Estimates that are sensitive include judgments as to whether information gathered during the measurement period relate to information that was not yetavailable or whether subsequent developments have occurred that indicate the recognition of other asset and liabilities should be recorded within net income.

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In determining the estimated fair value for intangible assets, we typically utilize the income approach, which discounts the projected future net cash flow using an appropriate discountrate that reflects the risks associated with such projected future cash flow. Estimates that are sensitive to the determination of the fair value of acquired customer intangibles, includeforecasted revenues, operating expenses, income tax expenses, depreciation and amortization expenses, and attrition and discount rates, all of which can have a material impact on theestimated fair values of customer relationship intangible assets.

Other significant judgments include the estimated fair value of real and personal property that utilizes significant inputs such as rental and discount rates to determine the fair value ofthe acquired assets, and the market approach that utilizes significant inputs such as market rental rates and sales comparisons. Fair value estimates are based on available historicalinformation, future expectations and assumptions determined to be reasonable but are inherently uncertain with respect to future events, including economic conditions, competition, theuseful life of the acquired assets and other factors. Estimates that are sensitive to the determination of the fair value of real and personal property include external transactions and othercomparable transactions, estimated replacement and reproduction costs, and estimated useful lives and salvage values.

Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives and certain assets may even be consideredto have indefinite useful lives. Intangible assets determined to have an indefinite useful life are reassessed periodically based on the expected use of the asset by us, legal or contractualprovisions that may affect the useful life or renewal or extension of the asset’s contractual life without substantial cost, and the effects of demand, competition and other economicfactors.

Recoverability of goodwill and intangible assets

Goodwill

We review goodwill for impairment at least annually, and on an interim basis if events occur or circumstances indicate that it is more likely than not that a reporting units’ fair value isbelow its carrying amount. We have elected to perform our annual tests for indications of goodwill impairment as of the first day of the fourth quarter of each fiscal year. We test forgoodwill impairment at the reporting unit level, which is at or one level below the operating segment level, unless components are determined to be economically similar, in which casecomponents would be aggregated into goodwill reporting units that are at the same level as an operating segment. The determination of reporting units considers the quantitative andqualitative characteristics of aggregation of each of the components within the operating segments. The significant qualitative and economic characteristics used in determining ourcomponents to support their aggregation include types of businesses and the manner in which the components operate, consideration of key impacts to net sales, cost of sales,competitive risks and the extent to which components share assets and other resources. Goodwill has been assigned as of the acquisition date of the respective components. Goodwill hasonly been allocated upon a business’s disposal or upon achievement of criterion to classify an existing component as a new reporting unit.

A qualitative review may be conducted to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative review isbypassed or it is determined that it is more likely than not that the carrying value is greater than the fair value of the reporting unit, a quantitative impairment test must be performed.The quantitative impairment test determines the fair value of each reporting unit, which is then compared against the carrying amount of the reporting unit, including goodwill, todetermine if an impairment exists. In fiscal 2019, we performed two qualitative reviews, and as a result of one of the qualitative reviews a quantitative review of goodwill was conductedin the second quarter of fiscal 2019. During fiscal 2019, we recorded a total impairment charge of $292.8 million related to the acquired Supervalu distribution business. In fiscal 2020,we performed two qualitative reviews, and the results of one quantitative review in the first quarter of fiscal 2020 resulted a goodwill impairment charge of $421.5 million.

For the fiscal 2019 and 2020 quantitative assessments, we estimated the fair value for our reporting units, utilizing the income and market approaches, which were weighted on a 50:50basis to determine each reporting unit’s fair value. Estimates that were sensitive to the fair value determination under income and market approach, include forecasted revenues,operating expenses, income tax expenses, depreciation and amortization expenses and discount rates. In addition, the market approach quantifications included comparable companymarket multiples relative to each reporting unit. Refer to Note 7—Goodwill and Intangible Assets in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

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Intangible Assets

We review indefinite lived intangible assets and other long lived assets with finite lives at least annually, and on an interim basis if events occur or circumstances indicate that thecarrying value of the respective asset may not be recoverable. If the evaluation indicates that the carrying amount of the asset may not be recoverable, the potential impairment ismeasured based on a projected discounted cash flow model. Impairment is measured as the difference between the fair value of the asset and its carrying value. Cash flows expected tobe generated by the related assets are estimated over the asset’s useful life based on projected cash flows.

Indefinite-lived intangible assets are reviewed for impairment at least annually as of the first day of the fourth fiscal quarter and if events occur or circumstances change that wouldindicate that the value of the asset may be impaired. We perform qualitative assessments of goodwill and indefinite lived intangibles assets for impairment, unless we believe it is morelikely than not that an intangible asset’s fair value is less than the carrying value, in which case a quantitative assessment would be performed.

Our fiscal 2020 annual indefinite lived impairment assessment indicated that no impairment existed. Refer to Note 7—Goodwill and Intangible Assets in Part II, Item 8 of this AnnualReport on Form 10-K for the carrying values reviewed and additional information.

We review long-lived assets, including definite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value of theassets 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. If the evaluationindicates that the carrying amount of an asset may not be recoverable, the potential impairment is measured based using the income approach. We group long-lived assets with otherassets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.

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 taxconsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets andliabilities 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 effecton deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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 andmeasurement 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 wemay 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 taxsettlements 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 areduction 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 Companyconsiders the statutory recovery periods for the assets, along with available sources of future taxable income, including reversals of existing taxable temporary differences, tax planningstrategies, history of taxable income, and projections of future income. The Company gives more significance to objectively verifiable evidence, such as the existence of deferred taxliabilities 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.

Lease accounting

In fiscal 2020, we adopted the new lease accounting guidance and elected the allowable option under the guidance to not restate comparative periods in the year of adoption (fiscal years2019 and prior). Under the new guidance, we determine if an arrangement is a lease at inception or modification of a contract and classify each lease as either an operating or financelease at commencement, resulting in the recognition of lease assets and liabilities for the majority of our leases. Finance and operating lease assets represent our right to use anunderlying asset as lessee for the lease term, and lease obligations represent our obligation to make lease payments arising from the lease. These assets and obligations are recognized atthe lease commencement date based on the present value of lease payments, net of incentives, over the lease term.

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Significant judgment is required to determine our incremental borrowing rate, which impacts the determination of lease classification and the present value of lease payments. Generally,our lease contracts do not provide a readily determinable implicit rate and, therefore, we use an estimated incremental borrowing rate as of the lease commencement date in determiningthe present value of lease payments. The estimated incremental borrowing rate reflects considerations such as market rates for our outstanding collateralized debt, interpolations of ratesfor leases with terms that differ from our outstanding debt, and market rates for debt of companies with similar credit ratings. Given the significant operating lease assets and liabilitiesrecorded, changes in the estimates made by management or the underlying assumptions could have a material impact on our Consolidated Financial Statements.

COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ARRANGEMENTS

Off-Balance Sheet Arrangements

Guarantees and Contingent Liabilities

We have outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of August 1, 2020. We are contingently liable forleases that have been assigned to various parties in connection with facility closings and dispositions. We are also a party to a variety of contractual agreements under which we may beobligated 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. Refer to Note 18—Commitments, Contingencies and Off-Balance Sheet Arrangements in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding our outstanding guaranteesand contingent liabilities.

Multiemployer Benefit Plans

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We contribute to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These multiemployer plans generally provideretirement 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 responsiblefor 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 employersand unions that are parties to the collective bargaining agreement. Based on the assessment of the most recent information available from the multiemployer plans, we believe that mostof 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 tous.

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 planscould 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 bargainingefforts, 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, theMultiemployer Pension Reform Act and Section 412(e) of the Internal Revenue Code. Furthermore, if we were to significantly reduce contributions, exit certain markets or otherwisecease 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 withdrawalliability 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, andrecognized continuing and discontinued operations expense, of $52.3 million, $41.3 million and $0.5 million in fiscal 2020, 2019 and 2018, respectively. In fiscal 2021, we expect tocontribute approximately $45.2 million related to continuing operations contributions to the multiemployer pension plans, subject to the outcome of collective bargaining and capitalmarket conditions. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. Any triggeredwithdrawal 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 bargainingagreements contain reserve requirements that may trigger unanticipated contributions resulting in increased healthcare expenses. If these healthcare provisions cannot be renegotiated ina manner that reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future.

Refer to Note 14—Benefit Plans in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding the plans in which we participate.

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Contractual Obligations

The following schedule summarizes our significant contractual obligations as of August 1, 2020:

Payments Due Per Period

(in millions) Total Fiscal 2021 Fiscal 2022-2023 Fiscal 2024-2025 Thereafter

Contractual obligations(1)(2): Long-term debt(3) $ 2,579 $ 85 $ 28 $ 783 $ 1,683

Interest on long-term debt(4) 578 137 237 186 18

Operating leases(5) 1,554 178 324 228 824

Finance leases(6) 175 21 129 20 5

Purchase obligations(7) 181 136 39 4 2

Self-insurance liabilities(8) 114 37 41 19 17

Multiemployer plan withdrawal liabilities 84 2 5 7 70

Total contractual obligations $ 5,265 $ 596 $ 803 $ 1,247 $ 2,619

(1) Because the timing of certain future payments beyond fiscal 2020 cannot be reasonably determined, contractual obligations payments due per fiscal period presented here exclude our discretionary funding of ourpension plans and required funding of our postretirement benefit obligations. Pension and postretirement benefit obligations were $294 million as of fiscal year ended August 1, 2020. The Company expects tocontribute approximately $0 million to $5.3 million to its defined benefit pension plans and postretirement benefit plans in fiscal 2021.

(2) Unrecognized tax benefits, which totaled $32 million as of fiscal year ended August 1, 2020, were excluded from the contractual obligations table because an estimate of the timing of future tax settlementscannot be reasonably determined.

(3) Long-term debt amounts exclude original issue discounts and deferred financing costs. Long-term debt payments due per period exclude any cash prepayments that may be required under the provisions of theTerm Loan Facility except for the $72 million prepayment from Excess Cash Flow in fiscal 2020 that is required in fiscal 2021 because the amount of any future additional prepayment amounts, if any, are notreasonably estimable as of August 1, 2020.

(4) Amounts include contractual interest payments (net of our interest rate swap payments) using the face value and applicable interest rate as of August 1, 2020. The face value of variable debt instruments with avariable rate equal to one-month LIBOR plus an applicable margin is $2,471 million. The face value of variable interest debt instruments with a variable rate equal to the prime rate plus an applicable margin is$59 million.

(5) Represents the minimum rents payable under operating leases, excluding common area maintenance, insurance or tax payments, for which we are also obligated, offset by minimum subtenant rentals of $214million total, $48 million, $78 million, $44 million and $44 million, respectively.

(6) Represents the minimum payments under capital leases, excluding common area maintenance, insurance or tax payments, for which we are also obligated, offset by minimum subtenant rentals of $12 milliontotal, $3 million, $5 million, $3 million and $1 million, respectively.

(7) Our purchase obligations include various obligations that have annual purchase commitments of $1 million or greater. As of fiscal year ended August 1, 2020, future purchase obligations existed that primarilyrelated to fixed asset, information technology and inventory purchase commitments. In addition, in the ordinary course of business, we enter into supply contracts to purchase product for resale to wholesalecustomers and to consumers, which are typically of a short-term nature with limited or no purchase commitments. The majority of our supply contracts are short-term in nature and relate to fixed assets,information technology and contracts to purchase product for resale. These supply contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standardcontractual considerations. The supply contracts that are cancelable have not been included above.

(8) Our insurance liabilities include the undiscounted obligations related to workers’ compensation, general and automobile liabilities at the estimated ultimate cost of reported claims and claims incurred but not yetreported and related expenses. Future payments reflected here represent our reasonably determined estimate.

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 onForm 10-K for further detail.

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 ourmaster 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 usefinancial instruments or derivatives for any trading or other speculative purposes. We currently utilize derivative financial instruments to reduce the market risks related to changes ininterest rates, fuel prices and foreign exchange rates.

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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 fullydescribed in Note 10—Long-Term Debt to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report. Interest raterisk is managed through the strategic use of fixed and variable rate debt and derivative instruments. As more fully described in Note 9—Derivatives to the Consolidated FinancialStatements included in Item 8. Financial Statements and Supplementary Data of this Annual Report, we have used interest rate swap agreements with the objective to protect us againstadverse changes in interest rates by effectively converting certain of our variable rate obligations to fixed rate obligations. These interest rate swaps are derivative instruments designatedas cash flow hedges on the forecasted interest payments related to a certain portion of our debt obligations. Our variable rate borrowings consist primarily of LIBOR based loans, whichis 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 toLIBOR. 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 $5.4million, 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 futureresults 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 ofoperations or cash flows may be impacted.

At August 1, 2020, a 100 basis point increase in interest rates would decrease the unrealized fair market value of our debt currently bearing fixed rates by approximately $1.6 million,while a 100 basis point decrease in interest rates would increase the unrealized fair market value of those same debt instruments by approximately $1.7 million. At August 1, 2020, a 100basis point increase in forward LIBOR interest rates would increase the fair value of our outstanding interest rate swaps by approximately $60.4 million, while a 100 basis point decreasewould decrease the fair value of those swaps by approximately $57.1 million.

Customer loans have been extended to certain wholesale customers in the normal course of business through notes receivable. The notes generally bear fixed interest rates negotiatedwith each wholesale customer. In fiscal 2020, notes receivable were accepted in conjunction with the sale of a distribution center and a business. The market value of the fixed rate notesis subject to change due to fluctuations in market interest rates.

The table below provides information about our financial instruments that are sensitive to changes in interest rates, including debt obligations, interest rate swaps and notes receivable.For debt obligations, the table presents principal amounts due and related weighted average interest rates by expected maturity dates using interest rates as of August 1, 2020, excludingany original issue and purchase accounting discounts, and deferred financing costs. For interest rate swaps, the table presents the notional amounts and related weighted average interestrates by maturity. For notes receivable, the table presents the expected collection of principal cash flows and weighted average interest rates by expected year of maturity.

August 1, 2020 Expected Fiscal Year of Maturity

Fair Value Total 2021 2022 2023 2024 2025 Thereafter (in millions, except interest rates)Long-term Debt:

Variable rate—principal payments $ 2,485 $ 2,530 $ 72 $ — $ — $ 757 $ 18 $ 1,683

Weighted average interest rate(1) 3.6% 4.4% —% —% 1.6% 4.4% 4.4%

Fixed rate—principal payments $ 51 $ 49 $ 13 $ 13 $ 14 $ 8 $ 1 $ —

Weighted average interest rate 5.2% 5.3% 5.3% 5.3% 4.8% 4.4% —

Interest Rate Swaps(2): Notional amounts hedged under pay fixed, receive

variable swaps $ (139) $ 2,443 $ 360 $ 360 $ 823 $ 450 $ 250 $ 200

Weighted average pay rate 2.5% 2.3% 2.4% 1.7% 2.2% 2.6% 2.9%

Weighted average receive rate 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.2%

Notes receivable: Principal receivable $ 79 $ 78 $ 50 $ 6 $ 6 $ 3 $ 2 $ 11

Weighted average receivable rate 5.8% 6.1% 5.8% 5.6% 6.3% 6.7% 4.6%

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

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(2) Includes forward starting swap contracts with notional amounts of $450.0 million which are not yet effective. Refer to Note 9—Derivatives n Part II, Item 8 of this Annual Report on Form 10-K for furtherinformation on interest rate swap contracts.

Fuel Price 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 requirementsat fixed prices. The fair values of fuel derivative agreements are measured using Level 2 inputs. As of August 1, 2020, our outstanding fuel supply agreements and derivative agreementshad fair values with a net liability of $0.1 million. As of August 3, 2019, we had no outstanding fuel supply agreements and derivative agreements.

Foreign Exchange Risk

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 fairvalues of foreign exchange derivative are measured using Level 2 inputs. As of August 1, 2020, our outstanding foreign exchange derivatives had fair values with a net liability of $0.2million. As of August 3, 2019, our outstanding foreign currency forward contracts were immaterial.

Investment Risk

We assumed the defined benefit pension plan obligations and assets of the SUPERVALU Retirement Plan from the Supervalu acquisition. This plan holds investments in public andprivate equity, fixed income and real estate securities, which is described further in Note 14—Benefit Plans in Part II, Item 8 of this Annual Report. Changes in SUPERVALURetirement Plan assets can affect the amount of our anticipated future contributions. In addition, increases or decreases in SUPERVALU Retirement Plan assets can result in a relatedincrease or decrease to our equity through Accumulated other comprehensive loss. As of August 1, 2020, a 10 percent unfavorable change in the total value of investments held by theSUPERVALU 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 forfiscal 2021, but would have resulted in an unfavorable change in net periodic pension income for fiscal 2021 of $2 million and would have reduced stockholders’ equity by $176 millionon a pre-tax basis as of August 1, 2020.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements PageReport of Independent Registered Public Accounting Firm 61Consolidated Balance Sheets 64Consolidated Statements of Operations 65Consolidated Statements of Comprehensive Income 66Consolidated Statements of Stockholders' Equity 67Consolidated Statements of Cash Flows 68Notes to Consolidated Financial Statements 70

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

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Report of Independent Registered Public Accounting Firm

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

Opinions on the Consolidated Financial Statements and Internal Control Over Financial ReportingWe have audited the accompanying consolidated balance sheets of United Natural Foods, Inc. and subsidiaries (the Company) as of August 1, 2020 and August 3, 2019, the relatedconsolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended August 1, 2020, and the relatednotes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of August 1, 2020, based on criteriaestablished 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 August 1, 2020 and August 3,2019, and the results of its operations and its cash flows for each of the years in the three-year period ended August 1, 2020, in conformity with U.S. generally accepted accountingprinciples. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 1, 2020, based on criteria established inInternal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of August 4, 2019 due to the adoption of AccountingStandards Codification (ASC) Topic 842, Leases.

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 theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility isto 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 apublic accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company inaccordance 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 theconsolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in allmaterial 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 toerror 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 theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financialreporting, 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 auditsalso 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 ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies andprocedures 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) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assuranceregarding 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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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to futureperiods 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 MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate 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 critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and weare not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the Company’s goodwill impairment

As discussed in Note 7 to the consolidated financial statements, during the first quarter of fiscal 2020, the Company changed its management structure and internal financialreporting to combine the Supervalu Wholesale reporting unit and the legacy Company Wholesale reporting unit into one U.S. Wholesale reporting unit. In addition, as a resultof a further sustained decline in market capitalization and enterprise value, the Company determined that it was more likely than not that the fair value of its U.S. Wholesalereporting unit was below its carrying amount. Accordingly, the Company performed a quantitative impairment test of goodwill for its U.S. Wholesale reporting unit utilizingthe income and market approaches. Based on the results of this test, the Company determined that the carrying value of its U.S. Wholesale reporting unit exceeded its fair valueby an amount that was greater than its assigned goodwill. As a result, the Company recorded a goodwill impairment charge of $421.5 million, which represented all of the U.S.Wholesale reporting unit’s goodwill.

We identified the assessment of the Company’s goodwill impairment as a critical audit matter because of the auditor judgment required to evaluate the assumptions used in theincome approach to estimate the fair value of the Company’s U.S. Wholesale reporting unit. Specifically, assessing certain internally-developed assumptions, including cashflow forecasts, long-term revenue growth rates, and the discount rate required a high degree of auditor judgment as there was limited observable market information, and thedetermined reporting unit fair value was sensitive to changes to such assumptions. Additionally, the audit effort associated with the evaluation of the discount rate requiredspecialized 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 internalcontrols over the goodwill impairment process, including controls related to the development of the assumptions listed above. We compared the Company’s previous forecaststo historical actual results to assess the Company’s ability to accurately forecast cash flows. In addition, we involved valuation professionals with specialized skills andknowledge, who assisted in:

– Evaluating the Company’s estimated long-term revenue growth rates by comparing those revenue growth rates to historical revenue growth rates of the Company’speers and industry reports;

– Performing a sensitivity analysis to assess the impact of possible changes to the discount rate;– Evaluating the discount rate used by the Company by comparing it to discount rate ranges that were developed using publicly available market data; and– Developing an estimated range of indicated values for the U.S. Wholesale reporting unit, using the Company’s cash flow forecasts and the range of discount rates

developed using publicly available market data, and comparing the results to the Company’s fair value estimate.

Evaluation of the Incremental Borrowing Rates Used to Calculate Operating Lease Assets and Liabilities upon the Adoption of ASC Topic 842, Leases

As discussed in Note 2 to the consolidated financial statements, the Company recognized $1.1 billion of operating lease assets and $1.1 billion of operating lease liabilitiesupon adoption of ASC Topic 842, Leases on August 4, 2019. To calculate the present value of the lease payments used to record the operating lease assets and liabilities upontransition, the Company estimated incremental borrowing rates based on the remaining lease terms as of the adoption date. The Company’s estimated incremental borrowingrates reflect considerations such as the Company’s credit rating, market rates for the Company’s outstanding collateralized debt, interpolations of rates for leases with termsthat differ from the Company’s outstanding debt, and market rates for debt of companies with similar credit ratings.

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We identified the evaluation of the incremental borrowing rates used to calculate operating lease assets and liabilities recorded upon the adoption of ASC Topic 842 as a criticalaudit matter. There was a high degree of auditor judgment in evaluating the Company’s estimated incremental borrowing rates due to the sensitivity of the present value of thelease payments to possible changes in the estimated incremental borrowing rates. Additionally, the audit effort associated with the evaluation of the incremental borrowingrates 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 internalcontrols over the Company’s ASC Topic 842 adoption process, including a control related to the Company’s determination of the incremental borrowing rates utilized in thecalculation of operating lease assets and liabilities. In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

– Evaluating the Company’s methodology used to estimate the incremental borrowing rates;– Assessing the Company’s use of its credit rating and market rates for its outstanding collateralized debt as of the adoption date as inputs to estimate the incremental

borrowing rates; and– Developing estimates of the incremental borrowing rates using a combination of a benchmark yield curve and market rates for the Company’s outstanding

collateralized debt and compared these estimates to the Company’s estimated incremental borrowing rates.

Assessment of the value of the defined benefit pension obligation

As discussed in Note 14 to the consolidated financial statements, the Company sponsors defined benefit pension plans, covering primarily former Supervalu employees whomeet certain eligibility requirements. The fair value of the defined benefit pension obligation at year-end was $2.4 billion, partially offset by plan assets totaling $2.0 billion.The determination of the Company’s defined benefit pension obligation with respect to these plans is dependent, in part, on the selection of certain actuarial assumptions,including the discount rates 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 rates 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 theevaluation of the discount rates 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 internalcontrols related to the Company’s defined benefit pension obligation process, including a control related to the development of the discount rates used. We compared themethodology used in the current year to develop the discount rates to the methodology used in prior periods. In addition, we involved an actuarial professional with specializedskills and knowledge, who assisted in the evaluation of the Company’s discount rates, by evaluating the methodology utilized by the Company and assessing the selecteddiscount rates against publicly available discount rate benchmark information.

/s/ KPMG LLP

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

Providence, Rhode IslandSeptember 29, 2020

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except for per share data)

August 1, 

2020 August 3, 

2019

ASSETS

Cash and cash equivalents $ 46,993 $ 44,468

Accounts receivable, net 1,120,199 1,067,012

Inventories 2,280,767 2,190,681

Prepaid expenses and other current assets 251,891 235,774

Current assets of discontinued operations 5,067 20,994

Total current assets 3,704,917 3,558,929

Property and equipment, net 1,701,216 1,896,164

Operating lease assets 982,808 —

Goodwill 19,607 442,256

Intangible assets, net 969,600 1,089,846

Deferred income taxes 107,624 34,262

Other assets 97,285 107,921

Long-term assets of discontinued operations 3,915 44,957

Total assets $ 7,586,972 $ 7,174,335

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable $ 1,633,448 $ 1,532,310

Accrued expenses and other current liabilities 281,956 260,531

Accrued compensation and benefits 228,832 188,484

Current portion of operating lease liabilities 131,022 —

Current portion of long-term debt and finance lease liabilities 83,378 112,103

Current liabilities of discontinued operations 11,438 15,517

Total current liabilities 2,370,074 2,108,945

Long-term debt 2,426,994 2,819,050

Long-term operating lease liabilities 873,990 —

Long-term finance lease liabilities 143,303 108,208

Pension and other postretirement benefit obligations 292,128 237,266

Deferred income taxes — 1,042

Other long-term liabilities 336,487 394,749

Long-term liabilities of discontinued operations 1,738 770

Total liabilities 6,444,714 5,670,030

Commitments and contingencies

Stockholders equity:

Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding — —Common stock, $0.01 par value, authorized 100,000 shares; 55,306 shares issued and 54,691 shares outstanding at August 1, 2020; 53,501 shares issued and

52,886 shares outstanding at August 3, 2019 553 535

Additional paid-in capital 568,736 530,801

Treasury stock at cost (24,231) (24,231)

Accumulated other comprehensive loss (237,946) (108,953)

Retained earnings 837,633 1,108,890

Total United Natural Foods, Inc. stockholders’ equity 1,144,745 1,507,042

Noncontrolling interests (2,487) (2,737)

Total stockholders' equity 1,142,258 1,504,305

Total liabilities and stockholders’ equity $ 7,586,972 $ 7,174,335

See accompanying Notes to Consolidated Financial Statements.

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

  Fiscal Year Ended

 August 1, 2020 (52 weeks)

August 3, 2019 (53 weeks)

July 28, 2018 (52 weeks)

Net sales $ 26,514,267 $ 22,307,456 $ 10,226,683

Cost of sales 22,639,475 19,098,850 8,706,669

Gross profit 3,874,792 3,208,606 1,520,014

Operating expenses 3,541,487 2,967,912 1,274,562

Goodwill and asset impairment charges 425,405 292,770 11,242

Restructuring, acquisition and integration related expenses 86,383 148,195 9,738

Loss (gain) on sale of assets 17,132 (499) —

Operating (loss) income (195,615) (199,772) 224,472

Other expense (income):

Net periodic benefit income, excluding service cost (39,177) (35,041) —

Interest expense, net 191,607 180,789 16,025

Other, net (3,591) (1,063) (1,545)

Total other expense, net 148,839 144,685 14,480

(Loss) income from continuing operations before income taxes (344,454) (344,457) 209,992

(Benefit) provision for income taxes (90,445) (58,936) 47,215

Net (loss) income from continuing operations (254,009) (285,521) 162,777

(Loss) income from discontinued operations, net of tax (15,202) 898 —

Net (loss) income including noncontrolling interests (269,211) (284,623) 162,777

Less net income attributable to noncontrolling interests (4,929) (107) —

Net (loss) income attributable to United Natural Foods, Inc. $ (274,140) $ (284,730) $ 162,777

Basic (loss) earnings per share: Continuing operations $ (4.81) $ (5.57) $ 3.22

Discontinued operations $ (0.28) $ 0.02 $ —

Basic (loss) earnings per share $ (5.10) $ (5.56) $ 3.22

Diluted (loss) earnings per share:

Continuing operations $ (4.81) $ (5.57) $ 3.20

Discontinued operations $ (0.28) $ 0.02 $ —

Diluted (loss) earnings per share $ (5.10) $ (5.56) $ 3.20

Weighted average shares outstanding: Basic 53,778 51,245 50,530

Diluted 53,778 51,245 50,837

See accompanying Notes to Consolidated Financial Statements.

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Fiscal Year Ended

August 1, 2020 (52 weeks)

August 3, 2019 (53 weeks)

July 28, 2018 (52 weeks)

Net (loss) income including noncontrolling interests $ (269,211) $ (284,623) $ 162,777

Other comprehensive (loss) income: Recognition of pension and other postretirement benefit obligations, net of tax(1) (82,838) (32,458) —

Recognition of interest rate swap cash flow hedges, net of tax(2) (44,751) (61,287) 3,575

Foreign currency translation adjustments (1,337) (1,029) (3,791)

Recognition of other cash flow derivatives, net of tax (67) — —

Total other comprehensive (loss) income (128,993) (94,774) (216)

Less comprehensive income attributable to noncontrolling interests (4,929) (107) —

Total comprehensive (loss) income attributable to United Natural Foods, Inc. $ (403,133) $ (379,504) $ 162,561

(1) Amounts are net of tax (benefit) expense of $(29.3) million, $(11.3) million and $0.0 million for the fiscal years ended August 1, 2020, August 3, 2019 and July 28, 2018, respectively.(2) Amounts are net of tax (benefit) expense of $(16.4) million, $(22.5) million and 1.5 million for the fiscal years ended August 1, 2020, August 3, 2019 and July 28, 2018, respectively.

See accompanying Notes to Consolidated Financial Statements.

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(In thousands)

AdditionalPaid-inCapital

Accumulated

OtherComprehensive

Loss

RetainedEarnings

Total UnitedNatural Foods,

Inc.Stockholders’

Equity

NoncontrollingInterests

TotalStockholders’

Equity

  Common Stock Treasury Stock

Shares Amount Shares Amount

Balances at July 29, 2017 50,622 $ 506 — $ — $ 460,011 $ (13,963) $ 1,231,371 $ 1,677,925 $ — $ 1,677,925Cumulative effect of change in accounting

principle — — — — 1,314 — (805) 509 — 509Restricted stock vestings and stock option

exercises, net 403 4 (3,592) — — (3,588) — (3,588)

Share-based compensation — — — — 25,890 — — 25,890 — 25,890

Repurchase of common stock — — 615 (24,231) — — — (24,231) — (24,231)

Other comprehensive loss — — — — — (216) — (216) — (216)

Net income — — — — — — 162,777 162,777 — 162,777

Balances at July 28, 2018 51,025 $ 510 615 $ (24,231) $ 483,623 $ (14,179) $ 1,393,343 $ 1,839,066 $ — $ 1,839,066Cumulative effect of change in accounting

principle — — — — — — 277 277 — 277Restricted stock vestings and stock option

exercises, net 471 5 (2,613) — — (2,608) — (2,608)

Share-based compensation — — — — 25,954 — — 25,954 — 25,954

Other comprehensive loss — — — — — (94,774) — (94,774) — (94,774)

Acquisition of noncontrolling interests — — — — — — — — (1,633) (1,633)

Distributions to noncontrolling interests — — — — — — — — (1,211) (1,211)Proceeds from issuance of common stock,

net 2,005 20 23,837 — — 23,857 — 23,857

Net (loss) income — — — — — — (284,730) (284,730) 107 (284,623)

Balances at August 3, 2019 53,501 $ 535 615 $ (24,231) $ 530,801 $ (108,953) $ 1,108,890 $ 1,507,042 $ (2,737) $ 1,504,305Cumulative effect of change in accounting

principle — — — — — — 2,883 2,883 — 2,883Restricted stock vestings and stock option

exercises, net 473 5 — — (1,028) — — (1,023) — (1,023)

Share-based compensation — — — — 24,643 — — 24,643 — 24,643

Other comprehensive loss — — — — — (128,993) — (128,993) — (128,993)

Distributions to noncontrolling interests — — — — — — — — (4,679) (4,679)Proceeds from the issuance of common

stock, net 1,332 13 — — 14,320 — — 14,333 — 14,333

Net (loss) income — — — — — — (274,140) (274,140) 4,929 (269,211)

Balances at August 1, 2020 55,306 $ 553 615 $ (24,231) $ 568,736 $ (237,946) $ 837,633 $ 1,144,745 $ (2,487) $ 1,142,258

See accompanying Notes to Consolidated Financial Statements.

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UNITED NATURAL FOODS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Year Ended

(In thousands)August 1, 2020 (52 weeks)

August 3, 2019 (53 weeks)

July 28, 2018 (52 weeks)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income including noncontrolling interests $ (269,211) $ (284,623) $ 162,777

(Loss) income from discontinued operations, net of tax (15,202) 898 —

Net (loss) income from continuing operations (254,009) (285,521) 162,777

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 281,535 247,746 87,631

Share-based compensation 24,643 25,551 25,783

Loss (gain) on disposal of assets 17,132 (499) —

Closed property and other restructuring charges 45,501 30,204 2,820

Goodwill and asset impairments 425,405 292,770 11,242

Net pension and other postretirement benefit income (39,177) (34,868) —

Deferred income tax benefit (70,933) (61,208) (14,679)

LIFO charge 17,900 25,372 —

Change in accounting estimate — — (20,909)

Provision for doubtful accounts, net 46,032 9,749 12,006

Non-cash interest expense and other adjustments 14,706 15,654 (424)

Changes in operating assets and liabilities, net of acquired businesses

Accounts and notes receivable (123,970) 53,351 (67,283)

Inventories (111,267) 183,105 (106,042)

Prepaid expenses and other assets 112,771 (47,708) 4,473

Accounts payable 107,050 (24,833) 3,961

Accrued expenses, other liabilities and other (40,954) (139,879) 7,682

Net cash provided by operating activities of continuing operations 452,365 288,986 109,038

Net cash provided by (used in) operating activities of discontinued operations 4,171 (4,456) —

Net cash provided by operating activities 456,536 284,530 109,038

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (172,568) (228,477) (44,608)

Purchases of acquired businesses, net of cash acquired — (2,292,435) (39)

Proceeds from dispositions of assets 147,382 180,362 1,039

Other (2,498) (280) (3,397)

Net cash used in investing activities of continuing operations (27,684) (2,340,830) (47,005)

Net cash provided by investing activities of discontinued operations 26,218 82,043 —

Net cash used in investing activities (1,466) (2,258,787) (47,005)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings of long-term debt 2,050 1,926,642 —

Proceeds from borrowings under revolving credit line 4,278,202 3,971,504 556,061

Proceeds from issuance of other loans 6,266 22,358 —

Repayments of borrowings under revolving credit line (4,601,490) (3,101,679) (569,671)

Repayments of long-term debt and finance leases (122,302) (779,909) (12,128)

Repayments of other loans (24,408) — —

Repurchase of common stock — — (24,231)

Proceeds from the issuance of common stock and exercise of stock options 14,276 23,975 975

Payment of employee restricted stock tax withholdings (1,023) (2,727) (4,563)

Payments for debt issuance costs — (62,600) —

Distributions to noncontrolling interests (4,642) (1,212) —

Net cash (used in) provided by financing activities (453,071) 1,996,352 (53,557)

EFFECT OF EXCHANGE RATE ON CASH (154) (143) (575)

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,845 21,952 7,901

Cash and cash equivalents, at beginning of period 45,267 23,315 15,414

Cash and cash equivalents, at end of period 47,112 45,267 23,315

Less: cash and cash equivalents of discontinued operations (119) (799) —

Cash and cash equivalents $ 46,993 $ 44,468 $ 23,315

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Fiscal Year Ended

(In thousands)August 1, 2020 (52 weeks)

August 3, 2019 (53 weeks)

July 28, 2018 (52 weeks)

Supplemental disclosures of cash flow information:

Cash paid for interest $ 181,815 $ 183,042 $ 16,471

Cash (refunds) payments for federal and state income taxes, net $ (21,886) $ 77,676 $ 64,042

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”, or “our”) is a leading distributor of natural, organic, specialty, produce, and conventional grocery and non-food products, and provider of support services. 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 2020, fiscal 2019 and fiscal 2018, or 2020, 2019 and 2018, aspresented in tabular disclosure, relate to the 52-week, 53-week and 52-week fiscal periods ended August 1, 2020, August 3, 2019 and July 28, 2018, 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 withaccounting principles generally accepted in the United States (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation, with theexception of sales transactions from continuing to discontinued operations for wholesale supply to a retail disposal group that was sold with a supply agreement in fiscal 2019 discussedfurther in Note 3—Revenue Recognition. Unless otherwise indicated, references to the Consolidated Statements of Operations and the Consolidated Balance Sheets in the Notes to theConsolidated Financial Statements exclude all amounts related to discontinued operations. Refer to Note 19—Discontinued Operations for additional information, including accountingpolicies, about the Company’s discontinued operations.

Discontinued Operations

In the fourth quarter of fiscal 2020, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for the Cub Foods businessand the majority of the remaining Shoppers locations (collectively “Retail”). As a result, the Company revised its Consolidated Financial Statements to reclassify Retail fromdiscontinued operations to continuing operations. This change in financial statement presentation resulted in the inclusion of Retail’s results of operations, financial position, cash flowsand related disclosures within continuing operations. Prior periods presented in the Consolidated Financial Statements have been conformed to the current period presentation, resultingin Retail being presented in continuing operations for all periods. Retail was acquired as part of SUPERVALU INC. (“Supervalu”) acquisition in the first quarter of fiscal 2019.

The Company may incur additional costs and charges in the future related to the Retail business if these locations are subsequently sold, if indicators exist that the business may beimpaired while classified as held and used, or if the Company incurs additional wind-down or employee-related costs or charges.

Inventory Costing Correction

As discussed in further detail in Note 20—Immaterial Correction to Prior Period Financial Statements, the Company has revised its prior period financial statements to correctimmaterial misstatements related to the carrying value of inventory to include income received under certain vendor funds programs.

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Net Sales

Net sales consist primarily of sales of conventional, natural, organic, specialty, and produce grocery and non-food products, and provision of support services to retailers, adjusted forcustomer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by the Company tocustomers 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 theincentive 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 theincentive is not subject to an agency relationship with the vendor, whether expressed or implied. Refer to Note 3—Revenue Recognition for additional information regarding theCompany’s revenue recognition policies.

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’sdistribution facilities and retail stores, offset by consideration received from suppliers in connection with the purchase, transportation, or promotion of the suppliers’ products. Cost ofsales also includes production and labor costs for the Company’s Woodstock Farms manufacturing business.

Retail store advertising expenses and Wholesale advertising services provided to Wholesale customers 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, cashdiscounts, 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. TheCompany 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 discreteidentifiable 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 therequired 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. Whenpayments 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 milestone is notprobable, the payment or rebate is recognized only when and if the milestone is achieved. Any upfront payments received for multi-period contracts are generally deferred and amortizedover the life of the contracts. The majority of the vendor fund 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, whereasshipping 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 $1,505.1 million, $1,298.9 million and $582.9 million for fiscal 2020, 2019 and 2018,respectively.

Operating Expenses and Other Expenses

Operating expenses include salaries and wages, employee benefits, warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation, depreciation,and amortization expense. Other expense (income), net includes interest on outstanding indebtedness, including direct financing and capital lease obligations, net periodic benefit planincome, excluding service costs, interest income and miscellaneous income and expenses.

Restructuring, Acquisition and Integration Expenses

Restructuring, acquisition and integration expenses reflect expenses resulting from restructuring activities, including severance costs, change-in-control related charges, facility closureasset impairment charges and costs, stock-based compensation acceleration charges and acquisition and integration expenses. Integration expenses include incremental expenses relatedto combining facilities required to optimize our distribution network as a result of acquisitions.

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Loss (Gain) on Sale of Assets

Loss (gain) on sale of assets includes loss (gain) on sale of assets and non-cash charges related to changes in plans of sales of discontinued operations. In fiscal 2020, the Companyrecorded a non-cash charge of $50.0 million to reduce the carrying amount of Retail’s property and equipment, and intangible assets for any depreciation and amortization expense thatwould have been recognized had the assets been held and used as part of continuing operations since their acquisition date through the end of fiscal 2020, which was comprised of $38.8million related to property and equipment, and $11.2 million related to intangible assets.

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 andliabilities 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. Actualresults could differ from those estimates.

Change in Accounting Estimate

As a result of growth in net sales and inventory in fiscal 2018, and the changes in processing and the resulting increase in the Company’s estimate of its accrual for inventory purchases,the Company initiated a review of its vendor invoicing processes and undertook a review of its estimate of its accrual for inventory purchases. In the third quarter of fiscal 2018, theCompany finalized its analysis and review of its accrual for inventory purchases, including a historical data analysis of unmatched and partially matched amounts that were aged greaterthan twelve months and the ultimate resolution of such aged accruals. Based on its analysis, the Company determined that it could reasonably estimate the outcome of its partiallymatched vendor invoices upon receipt of such invoice rather than when the amount was aged greater than twelve months and a liability was no longer considered probable. As a result ofthis change in estimate, Accounts payable was reduced by $20.9 million, resulting in an increase to net income of $13.9 million, or $0.27 per diluted share, for fiscal 2018.

Change in Inventory Accounting Policy

Inventories are valued at the lower of cost or market. Prior to fiscal 2019, inventory cost was determined using the first-in, first-out (“FIFO”) method. For a substantial portion of legacySupervalu inventory, cost was determined using the last-in, first-out (“LIFO”) method, with the rest primarily determined using FIFO. Inventories acquired as part of the Supervaluacquisition were recorded at their fair market values as of the acquisition date. During the second quarter of fiscal 2019, the Company completed its evaluation of its combined inventoryaccounting policies and changed its method of inventory costing for certain historical United Natural Foods, Inc. inventory from the FIFO accounting method to the LIFO accountingmethod. The Company concluded that the LIFO method of inventory costing is preferable because it allows for better matching of costs and revenues, as historical inflationary inventoryacquisition prices are expected to continue in the future and the LIFO method uses the current acquisition cost to value cost of goods sold as inventory is sold. Additionally, LIFO allowsfor better comparability of the results of the Company’s operations with those of similar companies in its peer group. As a result of the change to the LIFO method, the value of certainCompany inventories, excluding Supervalu inventories, were reduced by $15.0 million for fiscal 2019, which resulted in increases to Cost of sales and Loss from continuing operationsbefore income taxes of the same amount in the Consolidated Statements of Operations for fiscal 2019. This resulted in an increase to Net loss from continuing operations of $11.0million, or $0.21 per diluted share, for fiscal 2019. The Company has not retrospectively adjusted amounts prior to fiscal 2019 in its Consolidated Balance Sheets or ConsolidatedStatements of Operations, as applying the change in accounting policy prior to fiscal 2019 is not practicable due to data limitations of inventory costs in prior periods.

Reclassifications

Within the Consolidated Statements of Cash Flows certain immaterial amounts have been reclassified to conform with current year presentation: prior year amounts for Loss on debtextinguishment, Gain associated with disposal of investments and Non-cash interest expense have been combined into a line item titled Non-cash interest expense and other adjustments;a portion of prior year amounts for Loss (gain) on disposal of assets have been reclassified to Closed property and other restructuring charges; prior year amounts for Proceeds fromdisposal of investments have been combined into a line titled Proceeds from dispositions of assets; and prior year amounts for Payments for long-term investment and Payment ofcompany owned life insurance premiums have been combined into a line titled Other. These reclassifications had no impact on reported net income, cash flows, or total assets andliabilities.

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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 whenpresented 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 balancescreate 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 CashFlows. As of August 1, 2020 and August 3, 2019, the Company had net book overdrafts of $267.8 million and $236.9 million, respectively.

Accounts Receivable, Net

Accounts receivable primarily consist of trade receivables from customers and net receivable balances from suppliers. In determining the adequacy of the allowances, managementanalyzes customer creditworthiness, aging of receivables, payment terms, the value of the collateral, customer financial statements, historical collection experience, aging of receivablesand 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, orders are released; a failure to pay results in held or canceled orders.

Inventories

Inventories consist primarily of finished goods and are valued at the lower of cost or market. Allowances for vendor funds received from suppliers are recorded as a reduction toInventories and subsequently within Cost of sales upon the sale of the related products. Substantially all of the Company’s inventories consist of finished goods and a substantial portionof its inventories have a LIFO reserve applied. We use the weighted average cost method, standard costs, the retail inventory method (“RIM”) or replacement cost method to valuediscrete inventory items at lower of cost or market under the FIFO method before application of any LIFO reserve. Inventories are evaluated for shortages throughout each fiscal yearbased on actual physical counts in our distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimatedshortages as of the end of each fiscal year. As of August 1, 2020 and August 3, 2019, approximately $1.8 billion and $1.6 billion, respectively, of inventory was valued under the LIFOmethod and primarily included grocery, frozen food and general merchandise products, with the remaining inventory valued under the FIFO method and primarily included meat, dairyand deli products.

Property and Equipment, Net

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’ estimateduseful lives if certain criteria are met. Refer to Note 6—Property and Equipment 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 carryingvalue 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. TheCompany 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 evaluationindicates 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 marketapproach method.

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 taxconsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets andliabilities 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 effecton deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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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 forrequired 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 greaterthan 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 taxexpense 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 isallocated 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 acquisitiondate 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 tothe 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 theoperating segment level unless they are determined to be economically similar, and are evaluated for events or changes in circumstances indicating a goodwill reporting unit haschanged. Relative fair value allocations are performed when components of an aggregated goodwill reporting unit become separate reporting units or move from one reporting unit toanother.

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 theasset 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 reportingunit’s fair value is less than the carrying value, or the Company bypasses the qualitative assessment, a quantitative assessment would be performed. The Company estimates the fairvalues of its reporting units in a quantitative assessment by using the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and/or theincome 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 7—Goodwill and Intangible Assets for additional information regarding the Company’s fiscal 2020 and 2019 impairment reviews, changes to its reporting units and otherinformation. Refer to Note 4—Acquisitions for further detail on the valuation of goodwill and intangible assets related to the Supervalu acquisition.

Indefinite-lived intangible assets include a branded product line and a Tony’s Fine Foods (“Tony’s”) tradename. Indefinite-lived intangible assets are reviewed for impairment at leastannually 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 asset may be impaired. The Companyperformed qualitative reviews of its indefinite lived intangible assets in fiscal 2020 and 2019, which indicated a quantitative assessment was not required. During fiscal 2018, theCompany performed its annual qualitative assessment of its indefinite lived intangible assets and determined that a quantitative analysis was required for the Tony’s tradename. Basedon the results of its quantitative test performed, the Company determined that the fair value was in excess of its carrying value and no impairment existed.

In determining the estimated fair value for intangible assets, we typically utilize the income approach, which discounts the projected future net cash flow using an appropriate discountrate that reflects the risks associated with such projected future cash flow. Refer to Note 7—Goodwill and Intangible Assets and Note 4—Acquisitions for additional information on theCompany’s intangible assets.

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

Customer relationships 7-20 yearsNon-competition agreements 2-10 yearsTrademarks and tradenames 2-10 yearsLeases in place 1-8 yearsFavorable operating leases 1-8 yearsUnfavorable operating leases 2-11 yearsPharmacy prescription files 7 years

Business Dispositions

The Company reviews the presentation of planned business dispositions in the Consolidated Financial Statements based on the available information and events that have occurred. Thereview 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 ofthe 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 dispositionrepresents 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 forsale. 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 thebusiness 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 discontinuedoperations requirements are presented within Income from discontinued operations, net of tax in the Consolidated Statements of Operations, and assets and liabilities of the businesscomponent planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets. See Note 19—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 businessclassified 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 livedintangible 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 tosell, 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 therecognition of a gain or loss that differs from that anticipated prior to closing.

Investments

Investments in companies over which the Company has the ability to exercise significant influence are stated at cost plus our share of undistributed earnings or losses. Investments incompanies the Company does not exercise a significant influence in are stated at fair value, unless a fair value is not determinable and then are carried at cost, plus or minus changesresulting from observable changes in the price of the same or similar investments. The carrying values of these investments were not material for fiscal 2020 or 2019, either individuallyor in the aggregate, and are included within Other assets in the Consolidated Balance Sheets. Income attributable to investments accounted for using the equity method is not material forfiscal 2020, 2019 or 2018, and is recorded in Other, net, within the Consolidated Statements of Operations.

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 valueon 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 marketparticipants 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 considersthe 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 inherentrisk, 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 useof unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value:

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• 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 otherpricing 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 observablemarket 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 valuationtechniques, 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 assetsand liabilities approximate fair value due to the short-term nature of these instruments.

Share-Based Compensation

Share-based compensation consists of restricted stock units, performance units, stock options and Supervalu replacement awards. Share-based compensation expense is measured by thefair 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 valueof restricted stock units. Supervalu Replacement Awards are liability classified awards as they may ultimately be settled in cash or shares at the discretion of the employee. TheCompany’s Chief Executive Officer and Chairman and other executive officers and members of senior management have been granted performance units which vest, when and ifearned, in accordance with the terms of the related performance unit award agreements. The Company recognizes share-based compensation expense based on the target number ofshares 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 plannedtargets. Stock options are granted at exercise prices equal to the fair market value of the Company’s stock at the dates of grant. The fair value of stock option grants is estimated at thedate of grant using the Black-Scholes option pricing model. Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield and expected life.Expected volatilities utilized in the model are based on the historical volatility of the Company’s stock price. The risk-free interest rate is derived from the U.S. Treasury yield curve ineffect at the time of grant. The model incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data. The expected term is derived from historicalinformation and other factors. Share-based compensation expense is recognized within Operating expenses for ongoing employees and is recorded within Restructuring, acquisition andintegration related expenses when an employee is notified of termination and their awards become accelerated. Refer to Note 13—Share-Based Awards for additional information.

Benefit Plans

The Company recognizes the funded status of its company-sponsored defined benefit plans, which it assumed in the first quarter of fiscal 2019 through the acquisition of Supervalu, inthe 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 theConsolidated Balance Sheets. The Company measures its defined benefit pension and other postretirement plan obligations as of the nearest calendar month end. The Company recordsnet 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 theConsolidated Statements of Operations within Total other expense, net. 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 obligationand related income or expense for Company-sponsored pension and other postretirement benefits is dependent, in part, on management’s selection of certain actuarial assumptions incalculating 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 healthcarecosts. These assumptions are disclosed in Note 14—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 isrecognized as contributions are funded. See Note 14—Benefit Plans for additional information on participation in multiemployer plans.

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Earnings Per Share

Basic earnings per share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted earnings per share iscalculated 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 dilutedearnings per share calculation, outstanding stock options, restricted stock units and performance-based awards, if applicable, are considered common stock equivalents, using thetreasury 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 reductionto stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares.

On October 6, 2017, the Company announced that its Board of Directors authorized a share repurchase program for up to $200.0 million of the Company’s outstanding common stock.The repurchase program is scheduled to expire upon the Company’s repurchase of shares of the Company’s common stock having an aggregate purchase price of $200.0 million. TheCompany repurchased 614,660 shares of its common stock at an aggregate cost of $24.2 million in fiscal 2018. The Company did not repurchase any shares of its common stock infiscal 2020 or fiscal 2019.

Comprehensive (Loss) Income

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

Derivative Financial Instruments

The Company is exposed to market risks arising from changes in interest rates, fuel costs, and with the operation of UNFI Canada, foreign currency exchange rates. The Company usesderivatives principally in the management of interest rate and fuel price exposure. From time to time the Company may use contracts to hedge transactions in foreign currency. TheCompany does not utilize derivatives that contain leverage features. For derivative transactions accounted for as hedges, on the date the Company enters into the derivative transaction,the exposure is identified. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy forundertaking the hedge transaction. In this documentation, the Company specifically identifies the asset, liability, firm commitment, forecasted transaction, or net investment that hasbeen designated as the hedged item and states how the hedging instrument is expected to reduce the risks related to the hedged item. The Company measures effectiveness of its hedgingrelationships both at hedge inception and on an ongoing basis as needed.

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 thathave been incurred but not yet reported, discounted at a risk-free interest rate. The present value of such claims was calculated using discount rates ranging from 0.4 percent to 2.0percent.

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

(in thousands) 2020 2019 2018Beginning balance $ 88,838 $ 24,703 $ 22,776

Assumed liabilities from the Supervalu acquisition — 55,213 —

Expense 44,125 42,764 14,274

Claim payments (36,395) (33,087) (12,347)

Reclassifications 4,177 (755) —

Ending balance $ 100,745 $ 88,838 $ 24,703

The current portion of the self-insurance liability was $34.3 million and $32.7 million as of August 1, 2020 and August 3, 2019, respectively, and is included in Accrued expenses andother current liabilities in the Consolidated Balance Sheets. The long-term portion was $66.5 million and $56.1 million as of August 1, 2020 and August 3, 2019, respectively, and isincluded in Other long-term liabilities in the Consolidated Balance Sheets. The insurance liabilities as of the end of the fiscal year are net of discounts of $6.5 million and $6.6 million asof August 1, 2020 and August 3, 2019, respectively. Amounts due from insurance companies were $12.1 million and $11.1 million as of August 1, 2020 and August 3, 2019 recorded inPrepaid expenses and other current assets and Other assets.

Leases, After ASC 842 Adoption

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 tocommencement, lease classification is only reassessed upon a change to the expected lease term or contract modification. Finance and operating lease assets represent the Company’sright 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 andobligations 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 areestimated 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 readilydeterminable 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 profileand 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 option extensionperiods 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 sheetsand the related lease expense is recognized on a straight-line basis over the lease term. For all classes of underlying assets, the Company has elected to not separate fixed leasecomponents 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 bythe 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 leaseassets 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 itscustomers within Net sales. Finance lease expense is recognized as amortization expense within Operating expenses, and interest expense within Interest expense, net. For operatingleases 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 astraight-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 forproperty tax, insurance and maintenance expenses related to leased properties, which often represent variable lease expenses. For contractual obligations on properties where theCompany 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 rentcontracts, 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 ofretail stores, distribution centers and other properties that are no longer being utilized in current operations, and other factors. The Company calculates operating and finance leaseimpairments using a discount rate to calculate the present value of estimated subtenant rentals that could be reasonably obtained for the property. Lease impairment charges are recordedas a component of Restructuring, acquisition and integration related expenses in the Consolidated Statements of Operations.

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The calculation of lease impairment charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on theCompany’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 12—Leases for additional information.

Leases, Prior to Adoption of ASC 842

The Company records lease expense and income using the straight-line method within Operating expenses. For leases with step rent provisions whereby the rental payments increaseover the life of the lease, and for leases where the Company receives rent-free periods, the Company recognizes expense and income based on a straight-line basis based on the totalminimum lease payments to be made over the expected lease term. Deferred rent obligations are included in Other current liabilities and Other long-term liabilities in the ConsolidatedBalance Sheets.

For contractual obligations on properties where we remain the primary obligor upon assignment of the lease and do not obtain a release from landlords or retain the equity interests inthe legal entities with the related rent contracts, the Company continues to recognize rent expense and rent income. In addition, the Company continues to recognize contractualobligations 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 carrying value of capital lease assets and obligations, and property and equipment where theCompany determined it was the accounting owner pursuant to a lease agreement.

The Company maintains reserves for costs associated with closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations. Wecalculate closed property operating lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments after the closing date, reduced byestimated subtenant rentals that could be reasonably obtained for the property. Lease reserve impairment charges are recorded as a component of Restructuring, acquisition andintegration related expenses in the Consolidated Statements of Operations.

The closed property lease liabilities are usually paid over the remaining lease terms, which generally range from one to 12 years. Adjustments to closed property reserves primarilyrelate to changes in subtenant income or actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the changes becomeknown.

The calculation of the closed property charges requires significant judgments and estimates, including estimated subtenant rentals, discount rates and future cash flows based on ourexperience and knowledge of the market in which the closed property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions. Reservesfor closed properties are included in Other current liabilities and Other long-term liabilities in the Consolidated Balance Sheets.

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NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”), which providesnew comprehensive lease accounting guidance that supersedes previous lease guidance. The objective of this ASU is to establish the principles that lessees and lessors shall apply toreport useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Criteria for distinguishing between finance andoperating leases are substantially similar to criteria for distinguishing between capital and operating leases in previous lease guidance. Lease agreements that are 12 months or less arepermitted to be excluded from the balance sheet. In addition, this ASU expands the disclosure requirements of lease arrangements. The Company adopted this standard in the firstquarter of fiscal 2020 on August 4, 2019, the effective and initial application date, using the additional transition method under ASU 2018-11, which allows for a cumulative effectadjustment within retained earnings in the period of adoption. In addition, the Company elected the “package of three” practical expedients which allows companies to not reassesswhether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The impact of the adoption to the Company’s Consolidated Balance Sheetsincludes the recognition of operating lease liabilities with corresponding right-of-use assets of approximately the same amount based on the present value of the remaining leasepayments for existing operating leases. The difference between the amount of right-of-use assets and lease liabilities recognized is primarily related to adjustments to prepaid rent,deferred rent, lease intangible assets/liabilities, and closed property reserves. In addition, the adoption of the standard resulted in the derecognition of existing property and equipmentfor certain properties that did not previously qualify for sale accounting because the Company was determined to be the accounting owner during the construction phase and did notqualify for sale-leaseback accounting upon completion of the construction. At the transition date, the Company was constructing one facility, which was completed in the fourth quarterof fiscal 2020. The Company exercised a purchase option for the facility in the third quarter of fiscal 2020, which resulted in the Company continuing to account for the facility as itsaccounting owner. For properties where the Company was deemed the accounting owner during construction for which construction has been completed, the difference between theassets and liabilities derecognized, net of the deferred tax impact, was recorded as an adjustment to retained earnings. Lessor accounting guidance remained largely unchanged fromprevious guidance. Adoption of this standard did not have a material impact to the Company’s Consolidated Statements of Operations, Consolidated Statements of Stockholders’ Equityor Consolidated Statements of Cash Flows. The Company has revised its accounting policies, processes and controls, and systems as applicable to comply with the provisions anddisclosure requirements of the standard.

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The effects of the changes, including those discussed above, made to the Company’s Consolidated Balance Sheets as of August 3, 2019 for the adoption of the new lease guidance wereas follows (in thousands):

Balance at August 3, 2019 Adjustments due to adoption of

the new lease guidance Adjusted Balance at August 4,

2019Assets

Prepaid expenses and other current assets $ 235,774 $ (14,733) $ 221,041Property and equipment, net 1,896,164 (142,541) 1,753,623Operating lease assets — 1,059,473 1,059,473Intangible assets, net 1,089,846 (17,671) 1,072,175Deferred income taxes $ 34,262 (839) $ 33,423

Total increase to assets $ 883,689

Liabilities and Stockholders’ Equity Accrued expense and other current liabilities $ 260,531 $ (7,260) $ 253,271Current portion of operating lease liabilities — 137,741 137,741Current portion of long-term debt and finance lease liabilities 112,103 (6,936) 105,167Long-term operating lease liabilities — 936,728 936,728Long-term finance lease obligations 108,208 (37,565) 70,643Other long-term liabilities 394,749 (141,901) 252,848Total stockholders’ equity $ 1,504,305 2,882 $ 1,507,187

Total increase to liabilities and stockholders’ equity $ 883,689

In October 2018, the FASB issued authoritative guidance under ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR)Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU adds the Overnight Index Swap (OIS) rate based on Secured OvernightFinancing Rate (SOFR) as a benchmark interest rate for hedge accounting purposes. This ASU is effective for public companies with interim and fiscal years beginning after December15, 2018, which for the Company was the first quarter of fiscal year 2020. The Company adopted this standard in the first quarter of fiscal 2020 with no impact to the Company’sconsolidated financial statements as LIBOR is still being used as a benchmark interest rate.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification fromaccumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. This ASU is effective for all entities for annualand interim periods in fiscal years beginning after December 15, 2018. The Company adopted this ASU in the first quarter of fiscal 2020. The adoption of this ASU had no impact toAccumulated other comprehensive loss or Retained earnings.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326 Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825.This ASU clarifies the accounting treatment for the measurement of credit losses under ASC 236 and provides further clarification on previously issued updates including ASU 2017-12,Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognitionand Measurement of Financial Assets and Financial Liabilities. Since the Company adopted ASU 2017-12 in the fourth quarter of fiscal 2018, the amendments in ASU 2019-04 relatedto clarifications on Accounting for Hedging Activities have been adopted by the Company in the first quarter of fiscal 2020. The Company adopted the relevant portions of this standardin the first quarter of fiscal 2020 with no impact to Accumulated other comprehensive loss or Retained earnings for fiscal 2020, as the Company did not have separately measuredineffectiveness related to its cash flow hedges. The remaining amendments within ASU 2019-04 pertaining to ASC 326 are effective for fiscal years beginning after December 15, 2019,which for the Company is the first quarter of fiscal 2021 (see Topic 326 below).

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In March 2020, the FASB issued ASU 2020-04, Reference rate reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU providesoptional expedients and exceptions for a limited period of time to ease the potential burden in accounting for contracts, hedging relationships, and other transactions affected byreference rate reform. The Company adopted this ASU in the third quarter of fiscal 2020, which is effective on a prospective basis. The adoption of this ASU did not have a materialimpact on the consolidated financial statements. Optional expedients elected from Topic 848 are effective until superseded by subsequent documentation or December 31, 2022,whichever occurs first.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a CloudComputing Arrangement that is a Service Contract. ASU 2018-05 requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) tobe capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus anyoption renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company is required to adopt thisnew guidance in the first quarter of fiscal 2021. The Company has outstanding cloud computing arrangements and continues to incur costs that it believes would be required to becapitalized under ASU 2018-05. The Company has reviewed the provisions of the new standard. Adopting the standard will not have a material effect on the Company’s consolidatedfinancial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the DisclosureRequirements for Defined Benefit Plans. ASU 2018-14 eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and otherpostretirement plans. The Company is required to adopt this guidance in fiscal 2021. The Company is currently reviewing the provisions of the new standard and evaluating its impacton the Company’s annual consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendmentsto the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05, and ASU 2019-11 (collectively, “Topic 326”). Topic 326 changes the impairment model for most financial assetsand certain other instruments. For trade and other receivables, guarantees and other instruments, entities will be required to use a new forward-looking “expected loss” model that willreplace the current “incurred loss” model and generally will result in the earlier recognition of credit losses. The Company is required to adopt this new guidance in the first quarter offiscal 2021 on 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 statements offinancial position and stockholders’ equity as of the effective date. The Company has reviewed the provisions of the new standard; established revised processes and controls to estimateexpected losses for trade and other receivables, guarantees and other instruments. Adopting the standard will not have a material effect on the Company’s consolidated financialstatements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions to Topic 740’sgeneral principles. The amendments also improve consistent application and simplifies its application. The Company is required to adopt this guidance in the first quarter of fiscal 2022.The Company is currently reviewing the provisions of the new standard and evaluating its impact on the Company’s consolidated financial statements.

NOTE 3—REVENUE RECOGNITION

Revenue Recognition Accounting Policy

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 bytransferring control of those promised goods or services to its customers. ASC 606 defines a five-step process to recognize revenue that requires judgment and estimates, includingidentifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performanceobligations in the contract and recognizing revenue when or as the performance obligation is satisfied. This footnote addresses the Company’s revenue recognition policies.

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 thecustomer. Typically, shipping and customer receipt of wholesale products occur on the same business day. Discounts and allowances provided to customers are recognized as areduction 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 productis transferred, which is typically upon delivery.

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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 Retailadvertising program are recognized as Net sales. We recognize 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.

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 specifylevels of required minimum purchases in order to earn certain rebates or incentives. Certain contracts include rebates and other forms of variable consideration, including considerationpayable 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 inconjunction 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 notallocated 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 thetransaction. 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 hasthe 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 primarilyreflect 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 relatedgoods 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 ASC606, 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.

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 tendersthe incentive, whether the incentive reflects a direct reimbursement from a vendor, whether the incentive is influenced by or negotiated in conjunction with any other incentivearrangements and whether the incentive is subject to an agency relationship with the vendor, whether expressed or implied. Typically, when vendor incentives are offered directly byvendors 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 conjunctionwith 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’sdetermination of the transaction price. In circumstances where the vendors provide the Company consideration to promote the sale of their goods and the Company determines thespecific performance requirements for its customers to earn these incentives, Net sales are reduced for these customer incentives as part of the determination of the transaction price.

Sales from the Company’s Wholesale segment to its retail discontinued operations are presented within Net Sales when the Company holds the business for sale with a supply agreementthat it anticipates the sale of the retail banner to include upon its disposal. The Company recorded $0.0 million and $12.4 million within Net sales from continuing operations attributableto discontinued operations inter-company product purchases in fiscal 2020 and 2019, respectively, related to retail disposal groups, which were sold with a supply agreement and wereclassified within discontinued operations prior to their disposal. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of theacquired Supervalu business. No net sales were recorded within continuing operations for retail banners that the Company disposed of and expects to dispose of without a supplyagreement, as they have been eliminated upon consolidation within continuing operations and amounted to $125.0 million and $221.4 million in fiscal 2020 and 2019, respectively.

Certain customer agreements provide for the right to license one or more of the Company’s tradenames, such as FESTIVAL FOODS®, SENTRY®, COUNTY MARKET®,NEWMARKET®, FOODLAND®, JUBILEE® and SUPERVALU®. In addition, the Company enters into franchise agreements to separately charge its customers, who the Companyalso sells wholesale products to, for the right to use its CUB FOODS® tradename. The Company typically does not separately charge for the right to license its tradenames. TheCompany 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 notseparately recognize revenue related to tradenames utilized by its customers.

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The Company enters into distribution agreements with manufacturers to provide wholesale supplies to the Defense Commissary Agency (“DeCA”) and other government agencylocations. DeCA contracts with manufacturers to obtain grocery products for the commissary system. The Company contracts with manufacturers to distribute products to thecommissaries after being authorized by the manufacturers to be a military distributor to DeCA. The Company must adhere to DeCA’s delivery system procedures governing matterssuch 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 coveredunder 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 themanufacturer 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 goodsbefore 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 DeCAdesignated 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 byachieving specified purchasing thresholds, and upon the passage of time. The Company typically records customer advances within Other assets and Other current assets and typicallyrecognizes 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 forproduct sales includes variable consideration, such as certain of these customer incentives, the Company estimates the amount of variable consideration that should be included in thetransaction 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 ofcumulative 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 willbe 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 product describe above, many of the Company’s agreements with customers also include distinct professionalservices 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, e-commerce, network and data hosting solutions, training and certifications classes, and administrative back-office solutions. These professional services may contain asingle performance obligation for each respective service, in which case such services revenues are recognized when delivered. Relative to total Net sales, revenue from professionalservices is insignificant.

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, which are described below:• Chains, which consists of customer accounts that typically have more than 10 operating stores and exclude stores included within the Supernatural and Other channels defined below;• Independent retailers, which include smaller size accounts and include single store and multiple store locations, but are not classified within Chains above or Other discussed below;• Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market;• Retail, which includes our Retail segment, including the Cub Foods business and the majority of the remaining Shoppers locations, excluding five Shoppers locations that are held for sale;

and• Other, which includes international customers outside of Canada, foodservice, e-commerce, 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 itswholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly.

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(in millions) Net Sales for Fiscal 2020 (52 weeks)

Customer Channel Wholesale Retail Other Eliminations ConsolidatedChains $ 11,982 $ — $ — $ (1,319) $ 10,663

Independent retailers 6,699 — — — 6,699

Supernatural 4,720 — — — 4,720

Retail — 2,331 — — 2,331

Other 2,095 — 228 (222) 2,101

Total $ 25,496 $ 2,331 $ 228 $ (1,541) $ 26,514

(in millions) Net Sales for Fiscal 2019(1) (53 weeks)

Customer Channel Wholesale Retail Other Eliminations ConsolidatedChains $ 9,749 $ — $ — $ (937) $ 8,812

Independent retailers 5,536 — — — 5,536

Supernatural 4,394 — — — 4,394

Retail — 1,653 — — 1,653

Other 1,851 — 235 (174) 1,912

Total $ 21,530 $ 1,653 $ 235 $ (1,111) $ 22,307

(in millions) Net Sales for Fiscal 2018(1) (52 weeks)

Customer Channel Wholesale Other Eliminations ConsolidatedChains $ 3,299 $ — $ — $ 3,299

Supernatural 3,758 — — 3,758

Independent retailers 2,100 — — 2,100

Other 1,014 228 (172) 1,070

Total $ 10,171 $ 228 $ (172) $ 10,227

(1) Certain prior period amounts in the above tables have been reclassified to conform with the Company’s current sales channel presentation.

Whole Foods Market, Inc. was the Company’s largest customer in each fiscal year presented. Whole Foods Market, Inc. accounted for approximately 18%, 20% and 37% of theCompany’s net sales for fiscal 2020, 2019 and 2018, respectively. There were no other customers that individually generated 10% or more of the Company’s net sales during thoseperiods.

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 U.S. andCanada and international distribution occurs through freight-forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery tothe domestic port.

Contract Balances

The Company does not typically incur costs that are required to be capitalized in connection with obtaining a contract with a customer. The Company typically does not have anyperformance 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 undercontracts with its customers. These performance obligations are generally satisfied within a very short period of time. Therefore, the Company has utilized the practical expedient thatprovides 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 originalexpected 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 areless 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 forthose 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 theyare not generated through the transfer of goods or services to the customers. No material contract asset or liability exist for any period reported within these Consolidated FinancialStatements.

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Accounts and notes receivable are as follows:

(in thousands) August 1, 2020 August 3, 2019

Customer accounts receivable $ 1,156,694 $ 1,064,502Allowance for uncollectible receivables (55,928) (20,725)Other receivables, net 19,433 23,235Accounts receivable, net $ 1,120,199 $ 1,067,012

Notes receivable, net, included within Prepaid expenses and other current assets $ 49,268 $ 11,912Long-term notes receivable, net, included within Other assets $ 25,800 $ 34,408

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

(in thousands) 2020 2019 2018

Balance at beginning of year $ 20,725 $ 15,996 $ 14,509Additions charged to operating expenses 37,849 9,749 12,006Reductions of net sales 12,470 7,061 —Deductions (15,116) (12,081) (10,519)

Balance at end of year $ 55,928 $ 20,725 $ 15,996

NOTE 4—ACQUISITIONS

Supervalu Acquisition

On July 25, 2018, the Company entered into an agreement and plan of merger to acquire all of the outstanding equity securities of Supervalu, which was then the largest publicly tradedconventional grocery distributor in the United States. The acquisition of Supervalu diversifies the Company’s customer base, further enables cross-selling opportunities, expands marketreach and scale, enhances technology, capacity and systems, and is expected to deliver significant synergies and accelerate potential growth. The merger was completed on October 22,2018 (the “Closing Date”). At the effective time of the acquisition, each share of Supervalu common stock, par value $0.01 per share, issued and outstanding, was canceled andconverted into the right to receive a cash payment equal to $32.50 per share, without interest. Total consideration related to this acquisition was $2.3 billion, $1.3 billion of which waspaid in cash to Supervalu shareholders and $1.0 billion of which was used to satisfy Supervalu’s outstanding debt obligations. Included in the liabilities assumed in the Supervaluacquisition were the Supervalu Senior Notes with a fair value of $546.6 million. These Senior Notes were redeemed in the second quarter of fiscal 2019 following the required 30-daynotice period, resulting in their satisfaction and discharge.

The assets and liabilities of Supervalu were recorded in the Company’s Consolidated Financial Statements at their estimated fair values as of the acquisition date. In conjunction with theSupervalu acquisition, the Company announced its plan to sell the remaining acquired retail operations of Supervalu. In the fourth quarter of the current fiscal year, the Companyannounced its plan to retain certain retail operations and as a result the acquired retail assets and assumed liabilities of Supervalu were recast to reflect the revised discontinuedoperations of the Company. Refer to Note 19—Discontinued Operations for more information on discontinued operations.

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The following table summarizes the final consideration, fair value of assets acquired and liabilities assumed, and the resulting goodwill.

(in thousands) Final Acquisition DateFair Values As Recast

Consideration: Outstanding shares $ 1,258,450

Outstanding debt, excluding acquired senior notes 1,046,170

Equity-based awards 18,411

Total consideration $ 2,323,031

Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 27,142

Accounts receivable 554,311

Inventories 1,274,624

Prepaid expenses and other current assets 118,283

Current assets of discontinued operations 69,201

Property, plant and equipment 1,457,951

Goodwill 376,181

Intangible assets 967,003

Other assets 77,093

Long-term assets of discontinued operations 134,019

Accounts payable (1,020,328)

Current portion of long-term debt and finance lease obligations (579,565)

Other current liabilities (380,239)

Current liabilities of discontinued operations (54,142)

Long-term debt (34,355)

Long-term finance lease obligations (103,289)

Pension and other postretirement benefit obligations (234,324)

Deferred income taxes (18,254)

Other long-term liabilities (309,144)

Long-term liabilities of discontinued operations (770)

Noncontrolling interests 1,633

Total consideration 2,323,031

Less: Cash and cash equivalents(1) (30,596)

Total consideration, net of cash and cash equivalents acquired $ 2,292,435

(1) Includes cash and cash equivalents acquired attributable to continuing operations and discontinued operations.

Goodwill represents the future economic benefits arising largely from the synergies expected from combining the operations of the Company and Supervalu that could not beindividually identified and separately recognized. A substantial portion of goodwill is deductible for income tax purposes. Goodwill from the acquisition was attributed to theCompany’s Supervalu Wholesale reporting unit and the legacy Company Wholesale reporting unit, which in the first quarter of fiscal 2020 was reorganized into a single U.S. Wholesalereporting unit, as discussed further in Note 7—Goodwill and Intangible Assets. No goodwill was attributed to the Company’s Retail reporting unit or any other reporting units.

During the first quarter of fiscal 2020, the Company finalized its fair value estimates of the acquired net assets, which primarily related to immaterial changes to income taxes andproperty and equipment. The fair value of assets acquired and liabilities assumed has been revised to present Retail within continuing operations.

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The following table summarizes the identifiable intangible assets and liabilities recorded based on final valuations, as recast. The identifiable intangible assets are expected to beamortized on a straight-line basis over the estimated useful lives indicated. The fair value of identifiable intangible assets acquired was determined using income approaches. Significantassumptions utilized in the income approach were based on Company-specific information and projections, which are not observable in the market and are thus considered Level 3measurements as defined by authoritative guidance.

Final Acquisition Date Fair Values As Recast

(in thousands) Estimated Useful Life Continuing Operations Discontinued OperationsCustomer relationship assets 10-17 years $ 810,000 $ —

Favorable operating leases 1-19 years 21,629 —

Leases in place 1-8 years 10,474 —

Tradenames 2-9 years 82,000 1,000

Pharmacy prescription files 5-7 years 32,900 13,000

Non-compete agreement 2 years 10,000 —

Unfavorable operating leases 1-12 years (21,754) —

Total $ 945,249 $ 14,000

The Company incurred acquisition-related costs in conjunction with the Supervalu acquisition, which are quantified in Note 5—Restructuring, Acquisition and Integration RelatedExpenses.

The accompanying Consolidated Statements of Operations for fiscal 2019 include the results of operations of Supervalu since the October 22, 2018 acquisition date through August 3,2019, which consisted of net sales from continuing operations of $11.40 billion. Supervalu’s net sales from discontinued operations for this time period are reported in Note 19—Discontinued Operations

The following table presents unaudited supplemental pro forma consolidated Net sales and Net (loss) income from continuing operations, as recast, based on the Company’s historicalreporting periods as if the acquisition of Supervalu had occurred as of July 30, 2017:

(unaudited, in thousands, except per share data)

August 3, 2019As Recast (1)(53 weeks)

July 28, 2018As Recast (2)(52 weeks)

Net sales $ 25,639,516 $ 25,189,850

Net (loss) income from continuing operations $ (225,544) $ 48,394

Basic net (loss) income from continuing operations per share $ (4.40) $ 0.96

Diluted net (loss) income from continuing operations per share $ (4.40) $ 0.95

(1) Includes 12 weeks of pro forma Supervalu results for the period ended September 8, 2018.(2) Includes 52 weeks of pro forma Supervalu results for the period ended July 28, 2018, including 19 weeks of pro forma Associated Grocers of Florida, Inc. results, which was acquired by Supervalu on

December 8, 2017.

These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined companieswould have been had the acquisitions occurred at the beginning of the periods being presented, nor are they indicative of future results of operations.

NOTE 5—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES

Restructuring, acquisition and integration related expenses were as follows:

(in thousands) 2020 2019 20182019 SUPERVALU INC. restructuring expenses $ 4,898 $ 74,414 $ —

Integration and acquisition costs 41,610 51,245 4,967

Closed property charges and costs 39,875 22,536 —

2018 Earth Origins Market restructuring expenses and loss on sale — — 4,771

Total $ 86,383 $ 148,195 $ 9,738

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2019 SUPERVALU INC.

As part of its acquisition of Supervalu and in order to achieve synergies from this combination, the Company has taken certain actions, which began during the first quarter of fiscal2019 to: (i) review its organizational structure and the strategic needs of the business going forward to identify and place talent with the appropriate skills, experience and qualificationsto meet these needs; and (ii) dispose of and exit certain Supervalu legacy retail operations, as efficiently and economically as possible in order to focus on the Company’s core wholesaledistribution business. Expenses related to this program primarily related to actions associated the Company’s core cost-structure, which resulted in headcount reductions and other costsand charges. Incremental and identifiable expenses associated with integrating the legacy companies operations and information technology systems are reflected within integrationcosts, and asset impairments related to retail are included in Closed property charges and costs.

Integration and Acquisition Costs

Integration and acquisition costs for fiscal 2020 primarily relate to expenses associated with integrating and consolidating distribution centers and certain professional fees fordistribution center network and administrative integration activities. Fiscal 2019 acquisition and integration costs primarily reflect transaction expenses and professional fees related tothe Supervalu acquisition.

Closed Property Charges and Costs

Prior to the adoption of ASC 842, reserves for closed property were included in the Consolidated Balance Sheets within Accrued expenses and other current liabilities and Other long-term liabilities. Closed property charges recorded in fiscal 2019 primarily relate to retail stores and non-operating properties for which leases were terminated. In fiscal 2020, subsequentto the adoption of ASC 842, closed property charges relate to lease and property and equipment asset impairments related to retail stores, lease terminations of non-operating stores anddistribution center consolidation and are included within Restructuring, acquisition and integration related expenses.

Restructuring Programs

The following is a summary of the restructuring reserves by reserve type included in the Consolidated Balance Sheets, primarily within Accrued compensation and benefits forseverance and other employee separation costs and tax payments.

(in thousands) 2019 SUPERVALU INC. 2018 Earth Origins

Market 2017 Cost Saving andEfficiency Initiatives Total

Balances at July 28, 2018 $ — $ 383 $ 701 $ 1,084

Restructuring program charge(1) 74,414 — — 74,414

Acquired restructuring liability 12,573 — — 12,573

Cash payments (75,130) — (75,130)

Balances at August 3, 2019 11,857 383 701 12,941

Restructuring program charge 4,898 — — 4,898

Cash payments (13,217) (383) (701) (14,301)

Balances at August 1, 2020 $ 3,538 $ — $ — $ 3,538

Cumulative program charges incurred from inception to date $ 79,312 $ 2,219 $ 6,864 $ 88,395

(1) Includes $43.0 million of charges related to change-in-control expense to satisfy outstanding equity awards and severance related costs.

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NOTE 6—PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following:

(in thousands)

OriginalEstimatedUseful Lives 2020 2019

Land $ 142,737 $ 177,970

Buildings and improvements 20-40 years 970,528 1,081,887

Leasehold improvements 5-20 years 205,537 151,311

Equipment 3-30 years 878,483 768,800

Motor vehicles 3-7 years 74,395 76,186

Finance lease assets 1-11 years 161,395 114,107

Construction in progress 79,145 169,999

Property and equipment 2,512,220 2,540,260

Less accumulated depreciation and amortization 811,004 644,096

Property and equipment, net $ 1,701,216 $ 1,896,164

The Company capitalized $5.3 million and $3.3 million of interest during fiscal 2020 and 2019, respectively. The Company did not capitalize interest during fiscal 2018.

Depreciation and amortization expense on property and equipment was $197.7 million, $179.6 million and $71.5 million for fiscal 2020, 2019 and 2018, respectively.

NOTE 7—GOODWILL AND INTANGIBLE ASSETS

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 andCanada Wholesale); one separate Retail operating and reportable segment and two of which are separate operating segments (Woodstock Farms and Blue Marble Brands) that do notmeet the criteria for being disclosed as separate reportable segments. The Canada Wholesale operating segment, which is aggregated with U.S. Wholesale, would not meet thequantitative thresholds for separate reporting if it did not meet the aggregation criteria.

Supervalu Acquisition Goodwill

In conjunction with the acquisition of Supervalu, goodwill resulting from the acquisition was assigned to the previous Supervalu Wholesale reporting unit and the previous legacyCompany Wholesale reporting unit, as both of these reporting units were expected to benefit from the synergies of the business combination. The assignment was based on the relativesynergistic value estimated as of the acquisition date. This systematic approach utilized the relative cash flow contributions and value created from the acquisition to each reporting uniton a stand-alone basis. As of the acquisition date, approximately $80.9 million was assigned to the legacy Company Wholesale reporting unit.

As discussed below, the Company impaired all goodwill attributed to the Supervalu Wholesale reporting unit prior to finalization of its purchase accounting. In the first quarter of fiscal2020, as discussed further in Note 4—Acquisitions, the Company finalized purchase accounting and the opening balance sheet related to Supervalu acquisition. Adjustments to theopening balance sheet goodwill in the first quarter of fiscal 2020, resulted in an additional goodwill impairment charge of $2.5 million.

Fiscal 2020 Goodwill Impairment Reviews

During the first quarter of fiscal 2020, the Company changed its management structure and internal financial reporting, which resulted in the requirement to combine the SupervaluWholesale reporting unit and the legacy Company Wholesale reporting unit into one U.S. Wholesale reporting unit, and experienced a further sustained decline in market capitalizationand enterprise value. As a result of the change in reporting units and the sustained decline in market capitalization and enterprise value, the Company performed an interim quantitativeimpairment review of goodwill for the Wholesale reporting unit, which included a determination of the fair value of all reporting units.

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The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on observable multiples for guideline publicly tradedcompanies, and the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reportingunit. The calculation of the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cashflows and fair values of assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital of 8.5%, whichconsidered observable data about guideline publicly traded companies, an estimated market participant’s expectations about capital structure and risk premiums, including thosereflected in the Company’s market capitalization. The Company corroborated the reasonableness of the estimated reporting unit fair values by reconciling to its enterprise value andmarket capitalization. Based on this analysis, the Company determined that the carrying value of its U.S. Wholesale reporting unit exceeded its fair value by an amount that exceeded itsassigned goodwill. As a result, the Company recorded a goodwill impairment charge of $421.5 million in the first quarter of fiscal 2020. The goodwill impairment charge is reflected inGoodwill and asset impairment charges in the Consolidated Statements of Operations. The goodwill impairment charge reflects the impairment of all of the U.S. Wholesale reportingunit’s goodwill.

In the fourth quarter of fiscal 2020, the Company performed its annual goodwill qualitative impairment test and determined that a quantitative impairment test was not required for anyof its reporting units.

Fiscal 2019 Goodwill Impairment Reviews

During the first quarter of fiscal 2019, the Company experienced a decline in its stock price and market capitalization. During the second quarter of fiscal 2019, the stock price continuedto decline, and the decline in the stock price and market capitalization became significant and sustained. Due to this sustained decline in stock price, the Company determined that it wasmore likely than not that the carrying value of the Supervalu Wholesale reporting unit exceeded its fair value and performed an interim quantitative impairment test of goodwill.

The Company estimated the fair values of all reporting units using both the market approach, applying a multiple of earnings based on guidelines for publicly traded companies, and theincome approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The calculationof the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair valuesof assets and liabilities. The rates used to discount projected future cash flows under the income approach reflect a weighted average cost of capital of 10%, which considered guidelinesfor publicly traded companies, capital structure and risk premiums, including those reflected in the Company’s then-current market capitalization. The Company corroborated thereasonableness of the estimated reporting unit fair values by reconciling those fair values to its enterprise value and market capitalization. Based on this analysis, the Companydetermined that the carrying value of its Supervalu Wholesale reporting unit exceeded its fair value by an amount that exceeded the assigned goodwill as of the acquisition date. As aresult, the Company recorded a goodwill impairment charge of $292.8 million in fiscal 2019, which reflects the preliminary goodwill impairment charge recorded in the second quarterof fiscal 2019 and adjustments to the charge recorded in the third and fourth quarters of fiscal 2019. The goodwill impairment charge adjustments recorded in the third and fourthquarters of fiscal 2019 were attributable to changes in the preliminary fair value of net assets, most notably changes in tax assets and liabilities, intangible assets and property andequipment, which affected the initial goodwill resulting from the Supervalu acquisition. The goodwill impairment charge is reflected in Goodwill and asset impairment charges in theConsolidated Statements of Operations. The goodwill impairment charge reflects all of Supervalu Wholesale’s reporting unit goodwill, based on preliminary acquisition date assignedfair values. The quantitative goodwill impairment review indicated that the estimated fair value of the legacy Company Wholesale and Canada Wholesale reporting units were in excessof their carrying values by over 20%. Other continuing operations reporting units were substantially in excess of their carrying value.

The goodwill impairment charge recorded in fiscal 2019 was subject to change based upon the final purchase price allocation during the measurement period for estimated fair values ofassets acquired and liabilities assumed from the Supervalu acquisition. There were no material increases or decreases to the recorded goodwill impairment charge based upon the finalpurchase price allocations. Refer to Note 4—Acquisitions for further information about the preliminary purchase price allocation and provisional goodwill estimated as of the acquisitiondate.

In fiscal 2019, the Company performed quarterly reviews of the composition of its reporting units. Any future changes in the Company’s goodwill reporting units would require arelative fair value allocation of goodwill, and may require a quantitative impairment assessment of goodwill, which may result in material goodwill impairment charges.

In the fourth quarter of fiscal 2019, the Company performed its annual goodwill qualitative impairment test and determined that a quantitative impairment test was not required for anyof its reporting units.

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2018 Earth Origins Market Impairment

During the second quarter of fiscal 2018, the Company made the decision to close three non-core, under-performing stores of its total twelve stores. Based on this decision, coupled withthe decline in results in the first half of fiscal 2018 and the future outlook as a result of competitive pressure, the Company determined that both a test for recoverability of long-livedassets and a goodwill impairment analysis should be performed. The determination of the need for a goodwill analysis was based on the assertion that it was more likely than not that thefair value of the reporting unit was below its carrying amount. As a result of both these analyses, the Company recorded a total impairment charge of $3.4 million on long-lived assetsand $7.9 million to goodwill, respectively, during the second quarter of fiscal 2018. During the fourth quarter of fiscal 2018 the Company disposed of its Earth Origins retail business.

Goodwill and Intangible Assets Changes

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

(in thousands) Wholesale Other TotalGoodwill as of July 28, 2018(1)(2) $ 352,342 $ 10,153 $ 362,495

Goodwill from current fiscal year business combinations 374,757 — 374,757

Impairment charge (292,757) — (292,757)

Other adjustments (1,951) — (1,951)

Change in foreign exchange rates (288) — (288)

Goodwill as of August 3, 2019(1)(2) 432,103 10,153 442,256

Goodwill adjustment from prior fiscal year business combinations 1,424 — 1,424

Impairment charge (423,712) (293) (424,005)

Change in foreign exchange rates (68) — (68)

Goodwill as of August 1, 2020(1)(2) $ 9,747 $ 9,860 $ 19,607

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $0.0 million, $292.8 million and $716.5 million for fiscal 2018, 2019 and 2020, respectively.(2) Other amounts are net of accumulated goodwill impairment charges of $9.3 million, $9.3 million and $9.6 million for fiscal 2018, 2019 and 2020, respectively.

Intangible assets, net consisted of the following:

2020 2019

(in thousands)Gross Carrying

Amount AccumulatedAmortization Net

Gross CarryingAmount

AccumulatedAmortization Net

Amortizing intangible assets: Customer relationships $ 1,007,118 $ 172,832 $ 834,286 $ 1,007,089 $ 111,940 $ 895,149

Pharmacy prescription files 32,900 7,964 24,936 32,900 — 32,900

Non-compete agreements 12,900 11,500 1,400 12,900 6,237 6,663

Operating lease intangibles 8,193 4,020 4,173 32,103 2,321 29,782

Trademarks and tradenames 83,700 34,708 48,992 83,700 14,161 69,539

Total amortizing intangible assets 1,144,811 231,024 913,787 1,168,692 134,659 1,034,033

Indefinite lived intangible assets: Trademarks and tradenames 55,813 — 55,813 55,813 — 55,813

Intangibles assets, net $ 1,200,624 $ 231,024 $ 969,600 $ 1,224,505 $ 134,659 $ 1,089,846

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Amortization expense was $90.8 million, $70.3 million and $15.0 million for fiscal 2020, 2019 and 2018, respectively. The estimated future amortization expense for each of the nextfive fiscal years and thereafter on definite lived intangible assets existing as of August 1, 2020 is shown below:

Fiscal Year: (In thousands)2021 $ 78,1852022 72,1702023 71,9502024 72,4172025 70,305Thereafter 548,760

$ 913,787

NOTE 8—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Recurring Fair Value Measurements

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

Fair Value at August 1, 2020

(In thousands) Consolidated Balance Sheets Location Level 1 Level 2 Level 3

Assets: Foreign currency derivatives not designated as hedging

instruments Prepaid expenses and other current assets $ — $ 26 $ —

Fuel derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 36 $ —Foreign currency derivatives designated as hedging

instruments Prepaid expenses and other current assets $ — $ 94 $ —

Fuel derivatives designated as hedging instruments Other assets $ — $ 23 $ —

Mutual funds Other assets $ 1,678 $ — $ —

Liabilities: Fuel derivatives designated as hedging instruments Accrued expenses and other current liabilities $ — $ 197 $ —Foreign currency derivatives designated as hedging

instruments Accrued expenses and other current liabilities $ — $ 357 $ —

Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities $ — $ 46,743 $ —

Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 91,994 $ —

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Fair Value at August 3, 2019

(In thousands) Consolidated Balance Sheets Location Level 1 Level 2 Level 3

Assets: Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 389 $ —

Mutual Funds Prepaid expenses and other current assets $ 7 $ — $ —

Interest rate swaps designated as hedging instruments Other assets $ — $ 145 $ —

Mutual Funds Other assets $ 1,799 $ — $ —

Liabilities: Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities $ — $ 16,360 $ —

Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 60,737 $ —

Interest Rate Swap Contracts

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 valuationmodel incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of August 1, 2020, a 100 basis point increase in forwardLIBOR interest rates would increase the fair value of the interest rate swaps by approximately $60.4 million; a 100 basis point decrease in forward LIBOR interest rates would decreasethe fair value of the interest rate swaps by approximately $57.1 million. Refer to Note 9—Derivatives for further information on interest rate swap contracts.

Mutual Funds

Mutual fund assets consist of balances held in investments to fund certain deferred compensation plans. The fair values of mutual fund assets are based on quoted market prices of themutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy.

Fuel Supply Agreements and Derivatives

To reduce diesel price risk, the Company has entered into derivative financial instruments and/or forward purchase commitments for a portion of our projected monthly diesel fuelrequirements at fixed prices. The fair values of fuel derivative agreements are measured using Level 2 inputs. As of August 1, 2020, the Company’s outstanding fuel supply agreementsand derivative agreements had fair values with a net liability of $0.1 million. As of August 3, 2019, the Company had no outstanding fuel supply agreements and derivative agreements.

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. Thefair values of foreign exchange derivatives are measured using Level 2 inputs. As of August 1, 2020, the Company’s outstanding foreign exchange derivatives had fair values with a netliability of $0.2 million. As of August 3, 2019, the Company’s outstanding foreign currency forward contracts were immaterial.

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 currentassets 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 approachcalculated 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 forsimilar 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 toNote 1—Significant Accounting Policies for additional information regarding the fair value hierarchy.

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  August 1, 2020 August 3, 2019

(in thousands) Carrying Value Fair Value Carrying Value Fair ValueNotes receivable, including current portion $ 77,598 $ 78,877 $ 46,320 $ 46,320

Long-term debt, including current portion $ 2,497,626 $ 2,535,851 $ 2,906,483 $ 2,730,271

NOTE 9—DERIVATIVES

Management of Interest Rate Risk

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 debtportfolio 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 consistentwith 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 atAugust 1, 2020. Interest rate swap contracts are reflected at their fair values in the Consolidated Balance Sheets. Refer to Note 8—Fair Value Measurements of Financial Instruments forfurther information on the fair value of interest rate swap contracts.

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Details of outstanding swap contracts as of August 1, 2020, which are all pay fixed and receive floating, are as follows:

Effective Date Swap Maturity Outstanding NotionalValue (in millions) Pay Fixed Rate Receive Floating Rate(7)

Floating Rate ResetTerms

October 26, 2018 October 31, 2020 $ 100.0 2.8240% One-Month LIBOR MonthlyJune 9, 2016 April 29, 2021 25.0 1.0650% One-Month LIBOR Monthly

June 24, 2016 April 29, 2021 25.0 0.9260% One-Month LIBOR Monthly

January 23, 2019 April 29, 2021 50.0 2.5500% One-Month LIBOR Monthly

April 2, 2019 June 30, 2021 100.0 2.2520% One-Month LIBOR Monthly

June 10, 2019 June 30, 2021 50.0 2.2290% One-Month LIBOR Monthly

November 30, 2018 October 29, 2021 100.0 2.8084% One-Month LIBOR Monthly

March 21, 2019 April 15, 2022 100.0 2.3645% One-Month LIBOR Monthly

April 2, 2019 June 30, 2022 100.0 2.2170% One-Month LIBOR Monthly

June 28, 2019 June 30, 2022 50.0 2.1840% One-Month LIBOR Monthly

August 3, 2015(1) August 15, 2022 55.5 1.7950% One-Month LIBOR Monthly

August 3, 2015(2) August 15, 2022 37.0 1.7950% One-Month LIBOR Monthly

October 26, 2018 October 31, 2022 100.0 2.8915% One-Month LIBOR Monthly

January 11, 2019 October 31, 2022 50.0 2.4678% One-Month LIBOR Monthly

January 23, 2019 October 31, 2022 50.0 2.5255% One-Month LIBOR Monthly

October 30, 2020(3) October 31, 2022 — 0.4540% One-Month LIBOR Monthly

November 16, 2018 March 31, 2023 150.0 2.8950% One-Month LIBOR Monthly

January 23, 2019 March 31, 2023 50.0 2.5292% One-Month LIBOR Monthly

April 29, 2021(4) April 28, 2023 — 0.5680% One-Month LIBOR Monthly

June 30, 2021(5) June 30, 2023 — 0.6070% One-Month LIBOR Monthly

November 30, 2018 September 30, 2023 50.0 2.8315% One-Month LIBOR Monthly

October 29, 2021(6) October 20, 2023 — 0.6810% One-Month LIBOR Monthly

October 26, 2018 October 31, 2023 100.0 2.9210% One-Month LIBOR Monthly

January 11, 2019 March 28, 2024 100.0 2.4770% One-Month LIBOR Monthly

January 23, 2019 March 28, 2024 100.0 2.5420% One-Month LIBOR Monthly

November 30, 2018 October 31, 2024 100.0 2.8480% One-Month LIBOR Monthly

January 11, 2019 October 31, 2024 100.0 2.5010% One-Month LIBOR Monthly

January 24, 2019 October 31, 2024 50.0 2.5210% One-Month LIBOR Monthly

October 26, 2018 October 22, 2025 50.0 2.9550% One-Month LIBOR Monthly

November 16, 2018 October 22, 2025 50.0 2.9580% One-Month LIBOR Monthly

November 16, 2018 October 22, 2025 50.0 2.9590% One-Month LIBOR Monthly

January 24, 2019 October 22, 2025 50.0 2.5558% One-Month LIBOR Monthly

$ 1,992.5

(1) On March 31, 2015, the Company amended the original contract to reduce the beginning notional principal amount from $140 million to $84 million. The swap contract has an amortizing notional principalamount which is reduced by $1.5 million on a quarterly basis.

(2) The swap contract has an amortizing notional principal amount which is reduced by $1.0 million on a quarterly basis.(3) This forward starting swap contract has a notional principal amount of $100.0 million.(4) This forward starting swap contract has a notional principal amount of $100.0 million.(5) This forward starting swap contract has a notional principal amount of $150.0 million.(6) This forward starting swap contract has a notional principal amount of $100.0 million.(7) For these swap contracts that are indexed to LIBOR, the Company is monitoring and evaluating risks related to the expected future cessation of LIBOR.

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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 changesin cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments ofhedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entirechange in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Consolidated Statements of Comprehensive Income andsubsequently 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 pretax basis,are as follows:

Interest Expense, net

(In thousands) 2020 2019 2018Total amounts of expense line items presented in the Consolidated Statements of Operations in which the effects of

cash flow hedges are recorded $ 191,607 $ 180,789 $ 16,025(Loss) or gain on cash flow hedging relationships:

(Loss) or gain reclassified from comprehensive income into income $ (24,505) $ 13 $ 827Gain or (loss) on interest rate swap contracts not designated as hedging instruments:

Gain or (loss) recognized as interest expense $ — $ 51 $ —

NOTE 10—LONG-TERM DEBT

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

(in thousands)Average Interest Rate at 

August 1, 2020 Fiscal Maturity Year August 1, 2020 August 3, 2019Term Loan Facility 4.41% 2026 $ 1,773,000 $ 1,864,900

ABL Credit Facility 1.58% 2024 756,712 1,080,000

Other secured loans 5.19% 2024-2025 49,268 57,649

Debt issuance costs, net (45,846) (54,891)

Original issue discount on debt (35,508) (41,175)

Long-term debt, including current portion 2,497,626 2,906,483

Less: current portion of long-term debt (70,632) (87,433)

Long-term debt $ 2,426,994 $ 2,819,050

Future maturities of long-term debt, excluding debt issuance costs and original issue and purchase accounting discounts on debt, as of August 1, 2020, consist of the following:

Fiscal Year (In thousands)2021 $ 84,773

2022 13,465

2023 14,196

2024 764,669

2025 18,877

2026 and thereafter 1,683,000

$ 2,578,980

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ABL Credit Facility

On August 30, 2018, the Company entered into a loan agreement (as amended by that certain First Amendment to Loan Agreement, dated as of October 19, 2018, as further amended bythat certain Second Amendment to Loan Agreement, dated January 24, 2019, and as further amended by that certain Third Amendment to Loan Agreement, dated as of August 14, 2020,the “ABL Loan Agreement”), by and among the Company and United Natural Foods West, Inc. (together with the Company, the “U.S. Borrowers”) and UNFI Canada, Inc. (the“Canadian Borrower” and, together with the U.S. Borrowers, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Bank ofAmerica, N.A. as administrative agent for the ABL Lenders (the “ABL Administrative Agent”), Bank of America, N.A. (acting through its Canada branch), as Canadian agent for theABL Lenders, and the other parties thereto.

On August 14, 2020, the Company entered into the Third Amendment to Loan Agreement, which provides for, among other things, (i) the addition of certain perishable inventory to thecalculation of the Borrowing Base (as defined in the ABL Loan Agreement), (ii) the addition of income attributable to the business associated with the Cub Foods banner and theShoppers banner accounted for within discontinued operations to the definition of Consolidated Net Income (as defined in the ABL Loan Agreement), (iii) an increase of the sublimit ofavailability for letters of credit to $300 million which includes an increased further sublimit for the Canadian Borrower of $25 million, and (iv) other administrative changes.

The ABL Loan Agreement provides for a secured asset-based revolving credit facility (the “ABL Credit Facility” and the loans thereunder, the “ABL Loans”), of which up to (i)$2,050.0 million is available to the U.S. Borrowers and (ii) $50.0 million is available to the Canadian Borrower. The ABL Loan Agreement also provides for (i) a $300.0 millionsublimit of availability for letters of credit of which there is a further $25.0 million sublimit for the Canadian Borrower, and (ii) a $100.0 million sublimit for short-term borrowings on aswingline basis of which there is a further $3.5 million sublimit for the Canadian Borrower. The ABL Credit Facility replaced the Company’s $900.0 million prior asset-based revolvingcredit facility. In addition, $1,475.0 million of proceeds from the ABL Credit Facility were drawn to finance the Supervalu acquisition and related transaction costs on the Supervaluacquisition date (the “Closing Date”).

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 $600.0 million without the consentof 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 noassurance that additional funding would be available.

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

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 creditcard receivables, plus 90% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain pharmacy scripts availability of theBorrowers, after adjusting for customary reserves. The aggregate amount of the ABL Loans made and letters of credit issued under the ABL Credit Facility shall at no time exceed thelesser of the aggregate commitments under the ABL Credit Facility (currently $2,100.0 million or, if increased at the Borrowers’ option as described above, up to $2,700.0 million) orthe Borrowing Base. To the extent that the Borrowers’ Borrowing Base declines, the availability under the ABL Credit Facility may decrease below $2,100.0 million.

As of August 1, 2020, the U.S. Borrowers’ Borrowing Base, net of $254.7 million of reserves, was $2,047.8 million, which is below the $2,050.0 million limit of availability to the U.S.Borrowers under the ABL Credit Facility. As of August 1, 2020, the Canadian Borrower’s Borrowing Base, net of $3.9 million of reserves, was $39.6 million, which is below the $50.0million limit of availability to the Canadian Borrower under the ABL Credit facility, resulting in total availability of $2,087.4 million for ABL Loans and letters of credit under the ABLCredit Facility. As of August 1, 2020, the U.S. Borrowers had $756.7 million of ABL Loans outstanding, which are presented net of debt issuance costs of $9.9 million and are includedin Long-term debt in the Consolidated Balance Sheets, and the Canadian Borrower had no ABL Loans outstanding under the ABL Credit Facility. As of August 1, 2020, the U.S.Borrowers had $95.9 million in letters of credit and the Canadian Borrower had no letters of credit outstanding under the ABL Credit Facility. The Company’s resulting remainingavailability under the ABL Credit Facility was $1,234.8 million as of August 1, 2020.

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The ABL Loans of the U.S. Borrowers under the ABL Credit Facility bear interest at rates that, at the U.S. Borrowers’ option, can be either: (i) a base rate and an applicable margin, or(ii) a LIBOR rate and an applicable margin. As of August 1, 2020, the applicable margin for base rate loans was 0.25%, and the applicable margin for LIBOR loans was 1.25%. TheABL Loan Agreement contains provisions for the establishment of an alternative rate of interest in the event that LIBOR is no longer available. The ABL Loans of the CanadianBorrower under the ABL Credit Facility bear interest at rates that, at the Canadian Borrower’s option, can be either: (i) prime rate and an applicable margin, or (ii) a Canadian dollarbankers’ acceptance equivalent rate and an applicable margin. As of August 1, 2020, the applicable margin for prime rate loans was 0.25%, and the applicable margin for Canadiandollar bankers’ acceptance equivalent rate loans was 1.25%. Commencing on the first day of the calendar month following the ABL Administrative Agent’s receipt of the Company’saggregate availability calculation for the prior fiscal quarter, the applicable margins for borrowings by the U.S. Borrowers and Canadian Borrower will be subject to adjustment basedupon the aggregate availability under the ABL Credit Facility. Unutilized commitments under the ABL Credit Facility are subject to a per annum fee of (i) 0.375% if the average dailytotal outstandings were less than 25% of the aggregate commitments during the preceding fiscal quarter, or (ii) 0.25% if such average daily total outstandings were 25% or more of theaggregate commitments during the preceding fiscal quarter. As of August 1, 2020, the unutilized commitment fee was 0.25% per annum. The Borrowers are also required to pay a letterof credit fronting fee to each letter of credit issuer equal to 0.125% per annum of the amount available to be drawn under each such letter of credit, as well as a fee to all lenders equal tothe applicable margin for LIBOR or Canadian dollar bankers’ acceptance equivalent rate loans, as applicable, times the average daily amount available to be drawn under all outstandingletters of credit.

The ABL Loan Agreement subjects the Company to a fixed charge coverage ratio (as defined in the ABL Loan Agreement) of at least 1.0 to 1.0 calculated at the end of each fiscalquarter on a rolling four quarter basis when the adjusted aggregate availability (as defined in the ABL Loan Agreement) is less than the greater of (i) $235.0 million and (ii) 10% of theaggregate borrowing base. The Company has not been subject to the fixed charge coverage ratio covenant under the ABL Loan Agreement, including through the filing date of thisAnnual Report.

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 underthe ABL Credit Facility, were as follows:

Assets securing the ABL Credit Facility (in thousands)(1): August 1, 2020Certain inventory assets included in Inventories and Current assets of discontinued operations $ 2,270,892Certain receivables included in Accounts receivable, net and Current assets of discontinued operations $ 1,077,682

(1) The ABL Credit Facility is also secured by all of the Company’s pharmacy scripts, which are included in Intangible assets, net in the Consolidated Balance Sheets as of August 1, 2020.

Unused available credit and fees under the ABL Credit Facility (in thousands, except percentages): August 1, 2020Outstanding letters of credit $ 95,906

Letter of credit fees 1.375%Unused available credit $ 1,234,758

Unused facility fees 0.25%

The ABL Loan Agreement contains other customary affirmative and negative covenants and customary representations and warranties that must be accurate in order for the Borrowersto borrow under the ABL Credit Facility. The ABL Loan Agreement also contains customary events of default, including, but not limited to, payment defaults, breaches ofrepresentations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Facility to be in fullforce and effect, and a change of control. If an event of default occurs and is continuing, the Borrowers may be required immediately to repay all amounts outstanding under the ABLLoan Agreement.

Term Loan Facility

On the Closing Date, the Company entered into a new term loan agreement (the “Term Loan Agreement”), by and among the Company and Supervalu (collectively, the “TermBorrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ Term Lenders”), Goldman Sachs Bank USA, as administrative agent for the Lenders, and theother parties thereto. The Term Loan Agreement provides for senior secured first lien term loans in an aggregate principal amount of $1,950.0 million, consisting of a $1,800.0 millionseven-year tranche (the “Term B Tranche”) and a $150.0 million 364-day tranche (the “364-day Tranche” and, together with the Term B Tranche, collectively, the “Term LoanFacility”). The entire amount of the net proceeds from the Term Loan Facility was used to finance the Supervalu acquisition and related transaction costs.

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The loans under the Term B Tranche will be payable in full on October 22, 2025; provided that if on or prior to December 31, 2024 that certain Agreement for Distribution of Products,dated as of October 30, 2015, by and between Whole Foods Market Distribution, Inc., a Delaware corporation, and the Company has not been extended until at least October 23, 2025on terms not materially less favorable, taken as a whole, to the Company and its subsidiaries than those in effect on the Closing Date, then the loans under the Term B Tranche will bepayable in full on December 31, 2024.

In fiscal 2020, the Company made mandatory prepayments and voluntary prepayments of $15.3 million and $5.8 million, respectively, on the 364-day Tranche with asset sale proceeds.In connection with the prepayments, the Company incurred a loss on debt extinguishment related to unamortized debt issuance costs of $0.1 million, which was recorded within Interestexpense, net in the Consolidated Statements of Operations for the first quarter of fiscal 2020.

The loans under the 364-day Tranche were then paid in full on October 21, 2019. The Company funded the scheduled maturity of the $52.8 million outstanding borrowings under the364-day Tranche with incremental borrowings under the ABL Credit Facility on October 21, 2019.

Under the Term Loan Agreement, the Term Borrowers may, at their option, increase the amount of the Term B Tranche, add one or more additional tranches of term loans or add one ormore 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$656.3 million plus additional amounts based on satisfaction of certain leverage ratio tests, subject to certain customary conditions and applicable lenders committing to provide theadditional funding. There can be no assurance that additional funding would be available.

The Term Borrowers’ obligations under the Term Loan Facility are guaranteed by most of the Company’s wholly-owned domestic subsidiaries who are not also Term Borrowers(collectively, the “Term Guarantors”), subject to customary exceptions and limitations, including an exception for immaterial subsidiaries designated by the Company from time to time.The Term Borrowers’ obligations under the Term Loan Facility and the Term Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantiallyall of the Term Borrowers’ and the Term Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the TermGuarantors’ 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 $10.0 million.As of August 1, 2020, there was $599.9 million of owned real property pledged as collateral that was included in Property and equipment, net in the Consolidated Balance Sheets.

The loans under the Term Loan Facility may be voluntarily prepaid, subject to certain minimum payment thresholds and the payment of breakage or other similar costs. Under the TermLoan Facility, the Company is required, subject to certain exceptions and customary reinvestment rights, to apply 100 percent of Net Cash Proceeds (as defined in the Term LoanAgreement) from certain types of asset sales to prepay the loans outstanding under the Term Loan Facility. Commencing with the fiscal year ending August 1, 2020, the Company mustalso 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 (whichpercentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Term Loan Agreement) as of the last day of such fiscal year) ofExcess Cash Flow (as defined in the Term Loan Agreement) in excess of $10 million for the fiscal year then ended, minus any voluntary prepayments of the loans under the Term LoanFacility, the ABL Credit Facility (to the extent they permanently reduce commitments under the ABL Facility) and certain other indebtedness made during such fiscal year. The amountof prepayment from Excess Cash Flow generated in fiscal 2020 that is required in fiscal 2021 is $72.0 million.

The borrowings under the Term B Tranche of the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either: (i) a base rate and a margin of 3.25% or (ii)a LIBOR rate and a margin of 4.25%; provided that the LIBOR rate shall never be less than 0.0%. The Term Loan Agreement contains provisions for the establishment of an alternativerate of interest in the event that LIBOR is no longer available.

The Term Loan Agreement does not include any financial maintenance covenants but contains other customary affirmative and negative covenants and customary representations andwarranties. The Term Loan Agreement also contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenantdefaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Term Loan Facility to be in full force and effect, and a change of control. Ifan event of default occurs and is continuing, the Term Borrowers may be required immediately to repay all amounts outstanding under the Term Loan Agreement.

As of August 1, 2020, the Company had borrowings of $1,773.0 million and no amounts outstanding under the Term B Tranche and 364-day Tranche, respectively, which are presentednet of debt issuance costs of $36.0 million and an original issue discount on debt of $35.2 million. As of August 1, 2020, $72.0 million of the Term B Tranche was classified as current,excluding debt issuance costs and original issue discount on debt.

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NOTE 11—COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in Accumulated other comprehensive (loss) income by component net of tax for fiscal 2020, fiscal 2019 and fiscal 2018 are as follows:

(in thousands)Other Cash Flow

Derivatives Benefit Plans ForeignCurrency

SwapAgreements Total

Accumulated other comprehensive (loss) income at July 29, 2017 $ — $ — $ (15,262) $ 1,299 $ (13,963)

Other comprehensive (loss) income before reclassifications — — (3,791) 4,219 428

Amortization of cash flow hedge — — — (644) (644)

Net current period Other comprehensive (loss) income — — (3,791) 3,575 (216)

Accumulated other comprehensive (loss) income at July 28, 2018 $ — $ — $ (19,053) $ 4,874 $ (14,179)

Other comprehensive loss before reclassifications — (32,458) (1,029) (61,277) (94,764)

Amortization of cash flow hedge — — — (10) (10)

Net current period Other comprehensive loss — (32,458) (1,029) (61,287) (94,774)

Accumulated other comprehensive loss at August 3, 2019 $ — $ (32,458) $ (20,082) $ (56,413) $ (108,953)

Other comprehensive loss before reclassifications (88) (89,152) (1,337) (62,679) (153,256)

Amortization of amounts included in net periodic benefit income — (2,296) — — (2,296)

Amortization of cash flow hedges 21 — — 17,928 17,949

Pension settlement charge — 8,610 — — 8,610

Net current period Other comprehensive loss (67) (82,838) (1,337) (44,751) (128,993)

Accumulated other comprehensive loss at August 1, 2020 $ (67) $ (115,296) $ (21,419) $ (101,164) $ (237,946)

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

(in thousands) 2020 2019 2018 Affected Line Item on the Consolidated Statements of

Operations

Pension and postretirement benefit plan obligations: Amortization of amounts included in net periodic benefit income(1) $ (3,107) $ — $ — Net periodic benefit income, excluding service cost

Pension settlement charges 11,303 — — Net periodic benefit income, excluding service cost

Total reclassifications 8,196 — — Income tax benefit 1,882 — — (Benefit) provision for income taxes

Total reclassifications, net of tax $ 6,314 $ — $ —

Swap agreements: Reclassification of cash flow hedge $ 24,505 $ (13) $ (827) Interest expense, net

Income tax benefit (expense) 6,577 (3) (183) (Benefit) provision for income taxes

Total reclassifications, net of tax $ 17,928 $ (10) $ (644)

Other cash flow hedges: Reclassification of cash flow hedge $ 29 $ — $ — Cost of sales

Income tax benefit 8 — — (Benefit) provision for income taxes

Total reclassifications, net of tax $ 21 $ — $ —

(1) Amortization of amounts included in net periodic benefit income include amortization of prior service benefit and amortization of net actuarial loss as reflected in Note 14—Benefit Plans.

As of August 1, 2020, the Company expects to reclassify $46.4 million out of Accumulated other comprehensive loss into Interest expense, net during the following twelve-monthperiod.

NOTE 12—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 leasesinclude renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities are as follows (in thousands):

Lease Type Consolidated Balance Sheets Location August 1, 2020Operating lease assets Operating lease assets $ 982,808Finance lease assets Property and equipment, net 129,517

Total lease assets $ 1,112,325

Operating liabilities Current portion of operating lease liabilities $ 131,022Finance liabilities Current portion of long-term debt and finance lease liabilities 12,746Operating liabilities Long-term operating lease liabilities 873,990Finance liabilities Long-term finance lease liabilities 143,303

Total lease liabilities $ 1,161,061

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 theseleases.

The Company’s lease cost under ASC 842 is as follows:

(in thousands) Consolidated Statements of Operations Location August 1, 2020Operating lease cost Operating expenses $ 223,016Short-term lease cost Operating expenses 30,992Variable lease cost Operating expenses 151,065Sublease income Operating expenses (3,504)Sublease income Net sales (22,543)Other sublease income, net Restructuring, acquisition and integration related expenses(2) (5,075)

Net operating lease cost(1) 373,951Amortization of leased assets Operating expenses 16,052Interest on lease liabilities Interest expense, net 11,617

Finance lease cost 27,669

Total net lease cost $ 401,620

(1) Rent expense as presented here includes $6.8 million in fiscal 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expenseto 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 ofvariable lease expense of discontinued operations.

(2) Includes $35.5 million of lease expense and $(40.6) million of lease income that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related topreviously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations.

On October 23, 2018, the Company received $101.0 million in aggregate proceeds, excluding taxes and closing costs, for the sale and leaseback of its final distribution center of eightdistribution center sale-leaseback transactions entered into by Supervalu in April 2018. On October 26, 2018, the Company received $48.5 million in aggregate proceeds, excludingtaxes and closing costs, for the sale and leaseback of a separate distribution center under an agreement entered into by Supervalu in March 2018, as amended. Both distribution centersale-leasebacks qualified for sale accounting, with the lease-backs being classified as operating leases. No gain or loss was recognized or deferred on the sale of these facilities, as thefair value of these facilities as of the Supervalu acquisition date was determined to be equal to their contractual sale–leaseback amounts.

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In fiscal 2019, the Company entered into a lease for a new distribution facility in California for approximately 1.2 million square feet. The Company had identified two buildings on thesame distribution center campus: one in which it was deemed the accounting owner of related to construction activity and another for which it was a lessee. Upon the adoption of ASC842, the Company continued to account for the building as if it was the accounting owner of due to ongoing construction activity. On February 24, 2020, the Company executed apurchase option to acquire the entire distribution center campus. Upon execution of the purchase option, the previously constructed facility accounted for as an operating lease has beenre-classified as a finance lease. Upon completion of the construction in fiscal 2020, the Company did not qualify for sale accounting on the other building due to the outstandingpurchase option.

The Company leases certain of its distribution centers and leases most of its retail stores, and leases certain office facilities and equipment from third parties. Many of these leasesinclude renewal options and, in certain instances, also include options to purchase. Rent expense, other operating lease expense and subtenant rentals all under operating leases includedwithin Operating expenses, and subtenant rentals under operating leases with customers included within Net sales, consisted of the following. Rent expense as presented below underASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.

(in thousands) 2019 2018Rent expense(1) $ 211,807 $ 88,697

Less subtenant rentals recorded in Net sales (17,475) —

Less subtenant rentals recorded in Operating expenses (13,683) (1,649)

Total net rent expense $ 180,649 $ 87,048

(1) Rent expense as presented here includes $9.5 million and $0.0 million in fiscal 2019 and 2018, 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 we expect to remain primarily obligated under these leases.

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 hasfuture 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 ofassigned 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 August 1, 2020, these Lease Liabilities and Lease Receipts consistedof the following (in thousands):

Lease Liabilities Lease Receipts Net Lease Obligations

Fiscal Year Operating Leases(1) Finance Leases(2) Operating Leases Finance Leases Operating Leases Finance Leases

2021 $ 226,081 $ 23,801 $ (51,750) $ — $ 174,331 $ 23,8012022 217,353 118,812 (46,642) — 170,711 118,8122023 184,360 14,717 (36,361) — 147,999 14,7172024 157,528 13,602 (28,347) — 129,181 13,6022025 114,577 9,316 (18,155) — 96,422 9,316Thereafter 868,870 6,239 (45,093) — 823,777 6,239

Total undiscounted lease liabilities and receipts $ 1,768,769 $ 186,487 $ (226,348) $ — $ 1,542,421 $ 186,487

Less interest(3) (763,757) (30,438) Present value of lease liabilities 1,005,012 156,049 Less current lease liabilities (131,022) (12,746)

Long-term lease liabilities $ 873,990 $ 143,303

(1) Operating lease payments include $11.4 million related to extension options that are reasonably certain of being exercised and exclude $23.0 million of legally binding minimum leasepayments for leases signed but not yet commenced.

(2) Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.4 million of legally binding minimum lease paymentsfor leases signed but not yet commenced. This table excludes a $59.5 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residualobligation, and is subject to an underlying lease.

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

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As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and financeleases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands):

Lease Obligations Lease Receipts Net Lease Obligations

Fiscal Year Operating Leases Capital Leases Operating Leases Capital Leases Operating Leases Capital Leases

2020 $ 223,612 $ 41,550 $ (55,922) $ (319) $ 167,690 $ 41,2312021 190,845 32,804 (41,425) — 149,420 32,8042022 179,326 29,869 (35,998) — 143,328 29,8692023 154,812 26,699 (25,591) — 129,221 26,6992024 135,795 23,095 (18,183) — 117,612 23,095Thereafter 1,063,674 46,999 (59,186) — 1,004,488 46,999

Total future minimum obligations (receipts) $ 1,948,064 $ 201,016 $ (236,305) $ (319) $ 1,711,759 $ 200,697

Less interest (68,138) Present value of capital lease obligations 132,878 Less current capital lease obligations (24,670)

Long-term capital lease obligations $ 108,208

The following tables provide other information required by ASC 842:

Lease Term and Discount Rate August 1, 2020

Weighted-average remaining lease term (years) Operating leases 10.4 yearsFinance leases 3.1 years

Weighted-average discount rate Operating leases 10.6%Finance leases 8.8%

Other Information (in thousands) 2020

Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 231,272Operating cash flows from finance leases 9,334Financing cash flows from finance leases 19,972

Leased assets obtained in exchange for new finance lease liabilities 93,060Leased assets obtained in exchange for new operating lease liabilities 195,087

NOTE 13—SHARE-BASED AWARDS

As of August 1, 2020, the Company has restricted stock awards and performance share units and stock options under four equity incentive plans: the 2002 Stock Incentive Plan; the 2004Equity Incentive Plan, as amended; the 2012 Equity Incentive Plan, as amended and restated; and the 2020 Equity Incentive Plan. The terms of each stock-based award will bedetermined by the Board of Directors or the Compensation Committee. As of August 1, 2020, the Company has 2,865,125 shares authorized and available for grant under the 2020Equity Incentive Plan and the 2012 Equity Incentive Plan. The authorization for new grants under the 2002 Plan and 2004 Plan has expired.

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Share-Based Compensation Expense

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

(in thousands) 2020 2019 2018

Restricted stock awards $ 23,260 $ 22,979 $ 19,872

Supervalu replacement awards(1) 9,046 14,304 —

Performance-based share awards 1,494 3,013 5,569

Stock option awards (111) 199 342

Share-based compensation expense recorded in Operating expenses 33,689 40,495 25,783

Income tax benefit (9,043) (10,458) (6,538)

Share-based compensation expense, net of tax $ 24,646 $ 30,037 $ 19,245

Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses(2) $ 1,023 $ 33,021 $ 107

Income tax benefit (275) (8,870) (29)Share-based compensation expense recorded in Restructuring, acquisition and integration related expenses, net of

tax $ 748 $ 24,151 $ 78

(1) Amounts are derived entirely from liability classified awards.(2) Includes liability classified awards of $1.0 million and equity classified awards of $0.0 million for fiscal 2020, and liability classified awards $31.7 million and equity classified awards of $1.4 million for

fiscal 2019. Amounts recorded in fiscal 2018 are derived entirely from equity classified awards.

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 foremployees typically vest in three or four equal installments. The Board has adopted a policy in connection with the 2020 Equity Incentive Plan that sets forward grant, vesting andsettlement dates for equity awards, a one-year vesting period for awards issued to non-employee directors has been established, and a three-year equal installment vesting period fordesignated employee restricted stock awards. Performance awards are now set at a three-year cliff vest, subject to achievement of the performance objective. As of August 1, 2020, therewas $47.2 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, restricted stock units, Supervalureplacement awards and performance-based restricted stock units) of which $6.3 million relates to Supervalu Replacement Awards. Unrecognized compensation cost related toReplacement Options is de minimis. This cost is expected to be recognized over a weighted-average period of 1.9 years.

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 thegrant date. The following summary presents information regarding restricted stock units, Supervalu replacement awards and performance units:

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Numberof Shares

Weighted AverageGrant-DateFair Value

Outstanding at July 29, 2017 1,270,111 $ 44.56

Granted 716,952 40.06

Vested (434,730) 47.24

Forfeited (207,731) 41.38

Outstanding at July 28 2018 1,344,602 41.78

Supervalu replacement awards 4,301,233 32.50

Granted 1,665,233 23.30

Vested (2,038,290) 34.81

Forfeited (852,045) 30.83

Outstanding at August 3, 2019 4,420,733 31.11

Granted 6,058,519 7.67

Vested (1,043,628) 20.59

Forfeited (2,018,975) 12.39

Outstanding at August 1, 2020 7,416,649 $ 18.54

(in thousands) 2020 2019 2018Intrinsic value of restricted stock units vested $ 21,007 $ 36,071 $ 12,420

Performance-Based Share Awards

During fiscal 2020, the Company granted 977,860 performance share units to its executives (subject to the issuance of up to 977,860 additional shares if the Company’s performanceexceeds specified targeted levels) with a weighted average grant-date fair value of $8.07. These performance units are tied to fiscal 2020, 2021 and 2022 performance metrics, includingadjusted EPS Growth, adjusted return on invested capital (“ROIC”) and adjusted EBITDA leverage. There were no performance share units forfeited during fiscal 2020, and as ofAugust 1, 2020, there are 977,860 performance share units outstanding.

During fiscal 2019, the Company granted 339,282 performance share units to its executives (subject to the issuance of up to 339,282 additional shares if the Company’s performanceexceeds specified targeted levels) with a weighted average grant-date fair value of $22.56. These performance units were tied to fiscal 2020 performance metrics, including adjustedEBITDA and ROIC. During fiscal 2020 and fiscal 2019, there were 261,483 and 6,620, respectively, of performance share units forfeited, and as of August 1, 2020, 71,539 performanceshare units have been earned and will be issued in fiscal 2021.

During fiscal 2018, the Company granted 109,100 performance share units to its executives (subject to the issuance of 109,100 additional shares if the Company’s performance exceedsspecified targeted levels) with a weighted average grant-date fair value of $39.74. These performance units were tied to fiscal 2019 performance metrics, the majority of which did notvest. Stock Options

The Company did not grant stock options in fiscal 2020, 2019 or 2018.

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The following summary presents information regarding outstanding stock options as of August 1, 2020 and changes during the fiscal year then ended:

Numberof Options

WeightedAverageExercisePrice

WeightedAverageRemainingContractual

Term

AggregateIntrinsicValue

Outstanding at beginning of year 1,769,237 $ 43.06 Exercised (3,519) 14.77

Forfeited (429,225) 51.52

Canceled (206,420) 46.75

Outstanding at end of year 1,130,073 46.46 4.4 years $ —

Exercisable at end of year 1,130,073 $ 46.46 4.4 years $ —

The aggregate intrinsic value of options exercised during fiscal 2020, 2019 and 2018 was less than $0.1 million, $0.1 million and $0.7 million, respectively.

Supervalu Replacement Awards

Pursuant to the Merger Agreement, dated as of July 25, 2018, as amended, each outstanding Supervalu stock option, whether vested or unvested, that was unexercised immediately priorto 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 theCompany (“Replacement Option”) in accordance with the adjustment provisions of the Supervalu stock plan pursuant to which such SVU Option was granted and the MergerAgreement, with such Replacement Option generally having the same terms and conditions as the underlying SVU Option. In addition, pursuant to the Merger Agreement, eachoutstanding Supervalu restricted share award, restricted stock unit award, deferred share unit award and performance share unit award (“SVU Equity Award”) was converted, effectiveas of the effective time of the Merger, into time-vesting awards (“Replacement Award”) with a settlement value equal to the merger consideration ($32.50 per share) multiplied by thenumber of shares of Supervalu common stock subject to such SVU Equity Award, and generally upon the same terms of the SVU Equity Award including the applicable change incontrol termination protections. The Merger Agreement originally provided that the Replacement Awards were payable in cash, however, the Merger Agreement was amended onOctober 10, 2018, to provide that the Replacement Awards could be settled in cash and/or an equal value in shares of common stock of the Company.

On October 22, 2018, the Company authorized for issuance and registered on a Registration Statement on Form S-8 filed with the SEC 5,000,000 shares of common stock for issuancein order to satisfy the Replacement Options and Replacement Awards. During fiscal 2019, the Company issued 2,004,730 shares of common stock at an average price of $12.00 pershare for $23.9 million of cash, of which $0.4 million was received subsequent to the end of fiscal 2019. During fiscal 2020, the Company issued 1,349,655 shares of common stock atan average price of $10.66 per share for $14.3 million of cash.

The Replacement Awards are liability classified awards as they may ultimately be settled in cash or shares at the discretion of the employee. The Replacement Awards liabilities areexpensed over the service period based on the fixed value of $32.50 per share.

Retirement Provision

During the second quarter of fiscal 2019, after reviewing retirement provisions and practices for the treatment of equity awards at comparable companies, the Compensation Committeeof the Company’s Board of Directors determined to change the terms of its long-term compensation awards to executives who might consider retiring and to better assure that theirawards provided an incentive to work for the long term best interests of the Company up to their termination date, and regardless of their retirement plans. Accordingly, theCompensation Committee determined that time-based vesting restricted stock units, with the exception of Replacement Awards, will continue to vest during retirement after terminationof employment on the same terms as they would if the executive had not retired, but without the requirement that they remain employed. Performance share-units will be treatedsimilarly on retirement, but subject to actual performance at the time achievement of performance objectives is measured. In addition, an executive’s equity awards granted in the year ofretirement will be prorated to reflect the service period prior to the date of retirement. Retirement vesting will only be available to employees age 59 or older who voluntarily terminateemployment after at least 10 years of service to the Company. As a result of these retirement provisions, the Company recorded a share-based compensation charge of approximately$6.6 million during the second quarter of fiscal 2019 related to the amendment of outstanding awards. Future grants made to employees who are retirement eligible will result in anaccelerated pattern of expense recognition compared to non-retirement eligible employees.

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NOTE 14—BENEFIT PLANS

The Company’s employees who participate are covered by various contributory and non-contributory pension, profit sharing or 401(k) plans. The Company’s primary defined benefitpension plans are the SUPERVALU INC. Retirement Plan, Unified Grocers pension plan and certain supplemental executive retirement plans. These plans were closed to newparticipants 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 60% of the union employees participate in multiemployer retirement plans under collective bargaining agreements. The remaining either participate in planssponsored 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, theCompany provides healthcare and life insurance benefits for eligible retired employees under postretirement benefit plans. The Company also provides certain health and welfarebenefits, including short-term and long-term disability benefits, to inactive disabled employees prior to retirement. The terms of the postretirement benefit plans vary based onemployment 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.

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 ofour defined benefit pension plans and other postretirement benefit plans consisted of the following:

2020 2019

(in thousands) Pension Benefits Other Postretirement

Benefits Pension Benefits Other Postretirement

Benefits

Changes in Benefit Obligation Benefit Obligation at beginning of year $ 2,709,274 $ 37,682 $ — $ —

Benefit obligation at acquisition date of October 22, 2018 — — 2,499,954 52,276

Plan amendment — — — (4,199)

Service cost — 54 — 173

Interest cost 57,495 943 75,706 1,447

Actuarial loss (gain) 276,635 719 249,899 (9,836)

Settlements paid (689,989) — — —

Benefits paid (93,928) (2,285) (116,285) (2,179)

Benefit obligation at end of year 2,259,487 37,113 2,709,274 37,682

Changes in Plan Assets Fair value of plan assets at beginning of year 2,496,547 11,243 — —

Fair value of plan assets at acquisition date of October 22, 2018 — — 2,305,020 11,586

Actual return on plan assets 261,839 845 303,696 260

Employer contributions 16,099 2,601 4,116 1,636

Settlements paid (689,989) — — —

Benefits paid (93,928) (2,285) (116,285) (2,239)

Fair value of plan assets at end of year 1,990,568 12,404 2,496,547 11,243

Unfunded status at end of year $ (268,919) $ (24,709) $ (212,727) $ (26,439)

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

2020 2019

(in thousands) Pension Benefits Other Postretirement

Benefits Pension Benefits Other Postretirement

Benefits

Net Periodic Benefit (Income) Cost Service cost $ — $ 54 $ — $ 173

Interest cost 57,495 943 75,706 1,447

Expected return on plan assets (105,596) (215) (111,695) (184)

Amortization of net actuarial gain — (3,107) — —

Pension settlement charge 11,303 — — —

Net periodic benefit (income) cost (36,798) (2,325) (35,989) 1,436Other Changes in Plan Assets and Benefits Obligations Recognized in OtherComprehensive (Loss) Income Prior service benefit — — — (4,199)

Amortization of prior service benefit — 1,400 — —

Net actuarial loss (gain) 108,990 89 57,902 (9,912)

Amortization of net actuarial loss — 1,707 — —

Total expense (benefit) recognized in Other comprehensive (loss) income 108,990 3,196 57,902 (14,111)Total expense (benefit) recognized in net periodic benefit cost (income) and Other

comprehensive (loss) income $ 72,192 $ 871 $ 21,913 $ (12,675)

On August 1, 2019, the Company amended the SUPERVALU Retirement Plan to provide for a lump sum settlement window. On August 2, 2019, the Company sent plan participantslump sum settlement election offerings that committed the plan to pay certain deferred vested pension plan participants and retirees, who make such an election, a lump sum payment inexchange for their rights to receive ongoing payments from the plan. The lump sum payment amounts are equal to the present value of the participant’s pension benefits, and were madeto certain former (i) retired associates and beneficiaries who are receiving their monthly pension benefit payment and (ii) terminated associates who are deferred vested in the plan, hadnot yet begun receiving monthly pension benefit payments and who are not eligible for any prior lump sum offerings under the plan. Benefit obligations associated with the lump sumoffering have been incorporated into the funded status utilizing the actuarially determined lump sum payments based on offer acceptances. As disclosed in the preceding two tables, infiscal 2020, the plan made aggregate lump sum settlement payments, which resulted in a non-cash pension settlement charges from the acceleration of a portion of the accumulatedunrecognized actuarial loss, which was based on the fair value of SUPERVALU Retirement Plan assets and remeasured liabilities. As a result of the settlement payments reported in thesecond quarter of fiscal 2020, the SUPERVALU Retirement Plan obligations were remeasured using a discount rate of 3.1 percent and the MP-2019 mortality improvement scale. Thisremeasurement resulted in a $1.5 million decrease to Accumulated other comprehensive loss.

Estimated net actuarial loss expected to be amortized from Accumulated other comprehensive loss into net periodic benefit cost for the defined benefit pension plans during fiscal 2021is $0.8 million. The estimated net amount of prior service benefit and net actuarial gain for the postretirement benefit plans that will be amortized from Accumulated othercomprehensive loss into net periodic benefit cost during fiscal 2021 is $2.7 million.

Amounts recognized in the Consolidated Balance Sheets as of August 1, 2020 and August 3, 2019 consist of the following:

August 1, 2020 August 3, 2019

(in thousands) Pension Benefits Other Postretirement

Benefits Pension Benefits Other Postretirement

BenefitsAccrued compensation and benefits $ 1,500 $ — $ 1,900 $ —

Pension and other postretirement benefit obligations 267,419 24,709 210,827 26,439

Total $ 268,919 $ 24,709 $ 212,727 $ 26,439

Assumptions

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

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2020 2019

Benefit obligation assumptions: Discount rate 1.74% - 2.37% 2.99% - 3.49%

Net periodic benefit cost assumptions: Discount rate 2.99% - 3.49% 4.30% - 4.42%

Rate of compensation increase — —%

Expected return on plan assets(1) 2.00% - 5.75% 2.25% - 6.50%

(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. Theseassumptions are weighted by the actual or target allocation to each underlying asset class represented in the pension plan asset portfolio. We also assess the expected long-term return on planassets assumption by comparison to long-term historical performance on an asset class to ensure the assumption is reasonable. Long-term trends are also evaluated relative to market factorssuch 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 our pension and other postretirement benefit obligations annually. In determining thediscount 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 yieldcurve 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 valuesof 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 cashflows. 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 benefitobligation before age 65 was 7.80 percent as of August 1, 2020. The assumed healthcare cost trend rate for retirees before age 65 will decrease each year through fiscal 2029, until itreaches the ultimate trend rate of 4.50 percent. For those retirees whose health plans provide for variable employer contributions, the assumed healthcare cost trend rate used inmeasuring the accumulated postretirement benefit obligation after age 65 was 8.00 percent as of August 1, 2020. The assumed healthcare cost trend rate for retirees after age 65 willdecrease through fiscal 2029, until it reaches the ultimate trend rate of 4.50 percent. For those retirees whose health plans provide for a fixed employer contribution rate, a healthcarecost trend is not applicable. The healthcare cost trend rate assumption would have had the following impact on the amounts reported: a 100 basis point increase in the trend rate wouldincrease the accumulated postretirement benefit obligation by approximately $0.8 million as of the end of fiscal 2020 and would increase service and interest cost by less than $0.1million. Conversely, a 100 basis point decrease in the healthcare cost trend rate would decrease the Company’s accumulated postretirement benefit obligation as of the end of fiscal 2020by approximately $0.7 million and would decrease service and interest cost by less than $0.1 million.

Pension Plan Assets

Pension plan assets are held in a master trust and invested in separately managed accounts and other commingled investment vehicles holding domestic and international equitysecurities, domestic fixed income securities and other investment classes. The Company employs a total return approach whereby a diversified mix of asset class investments is used tomaximize the long-term return of plan assets for an acceptable level of risk. Alternative investments are also used to enhance risk-adjusted long-term returns while improving portfoliodiversification. Risk is managed through diversification across asset classes, multiple investment manager portfolios and both general and portfolio-specific investment guidelines. Risktolerance is established through careful consideration of the plan liabilities, plan funded status and our financial condition. This asset allocation policy mix is reviewed annually andactual 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 multipleinvestment 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 stylebiases (equities) and interest rate exposures (fixed income) versus benchmark indices. Monitoring activities to evaluate performance against targets and measure investment risk takeplace 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 Target 2020 2019Domestic equity 22.4% 22.6% 22.1%

International equity 6.8% 6.0% 6.2%

Private equity 5.3% 4.7% 4.2%

Fixed income 59.7% 60.4% 62.3%

Real estate 5.8% 6.3% 5.2%

Total 100.0% 100.0% 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 andis 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 valueand 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 theseinvestments, 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 orsimilar 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 arevalued 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 foridentical or similar securities, the fair value is based upon an industry valuation model, which maximizes observable inputs.

Mutual funds - Mutual funds are valued at the closing price reported in the active market in which the individual securities are traded.

Private equity and real estate partnerships - Valued based on NAV provided by the investment manager, updated for any subsequent partnership interests’ cash flows or expectedchanges 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 theCompany believes our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value ofcertain financial instruments could result in a different fair value measurement.

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The fair value of assets of our defined benefit pension plans held in master trusts as of August 1, 2020, by asset category, consisted of the following (in thousands):

Level 1 Level 2 Level 3 Measured at NAV as aPractical Expedient Total

Common stock $ 334,194 $ — $ — $ — $ 334,194

Common collective trusts — 901,258 — 59,454 960,712

Corporate bonds — 310,694 — — 310,694

Government securities — 131,424 — — 131,424

Mutual funds 456 42,867 — — 43,323

Mortgage-backed securities — 3,979 — — 3,979

Other 10,314 23,137 — — 33,451

Private equity and real estate partnerships — — — 172,791 172,791

Total plan assets at fair value $ 344,964 $ 1,413,359 $ — $ 232,245 $ 1,990,568

The fair value of assets of our defined benefit pension plans held in master trusts as of August 3, 2019, by asset category, consisted of the following (in thousands):

Level 1 Level 2 Level 3 Measured at NAV as aPractical Expedient Total

Common stock $ 397,800 $ — $ — $ — $ 397,800

Common collective trusts — 1,046,590 — 83,504 1,130,094

Corporate bonds — 362,251 — — 362,251

Government securities — 248,872 — — 248,872

Mutual funds 469 62,254 — — 62,723

Mortgage-backed securities — 10,920 — — 10,920

Other 5,603 73,745 — — 79,348

Private equity and real estate partnerships — — — 204,539 204,539

Total plan assets at fair value $ 403,872 $ 1,804,632 $ — $ 288,043 $ 2,496,547

Contributions

No minimum pension contributions are required to be made under either the SUPERVALU Retirement Plan or the Unified Grocers, Inc. Cash Balance Plan under the EmployeeRetirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2021. The Company expects to contribute approximately $0.0 million to $5.3 million to its other definedbenefit pension plans and postretirement benefit plans in fiscal 2021.

The Company funds its defined benefit pension plans based on the minimum contribution required under the 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 ofthe 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 assessesthe 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 GuarantyCorporation 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 (inthousands):

Fiscal Year Pension Benefits Other  Postretirement

Benefits2021 $ 117,700 $ 3,800

2022 112,900 3,600

2023 114,500 3,400

2024 118,000 3,200

2025 123,200 3,000

Years 2026-2030 592,300 12,000

Defined Contribution Plans

The Company sponsors defined contribution and profit sharing plans pursuant to Section 401(k) of the Internal Revenue Code. Employees may contribute a portion of their eligiblecompensation to the plans on a pre-tax basis. We match a portion of certain employee contributions by contributing cash into the investment options selected by the employees. The totalamount contributed by us to the plans is determined by plan provisions or at our discretion. Total employer contribution expenses for these plans were $21.0 million, $21.0 million and$11.6 million for fiscal 2020, 2019 and 2018, 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 theprimary benefits paid to inactive employees prior to retirement.

Amounts recognized in the Consolidated Balance Sheets consisted of the following (in thousands):

Post-Employment Benefits

August 1, 2020 August 3, 2019Accrued compensation and benefits $ 2,356 $ 2,356

Other long-term liabilities 5,053 5,053

Total $ 7,409 $ 7,409

Multiemployer Pension Plans

The Company contributes to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These multiemployer plans generallyprovide 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 areresponsible 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 byemployers 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 Company acquired multiemployer plan obligations related tocontinuing and discontinued operations as part of the Supervalu acquisition. The risks of participating in these multiemployer plans are different from the risks associated with single-employer plans in the following respects:

a. 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.b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.c. If we choose to stop participating in some multiemployer plans, or make market exits or closures or otherwise have participation in the plan drop below certain levels, we 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 2019 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, red zone status plans are generally less than65 percent funded and are considered in critical status, plans in yellow zone status are less than 80 percent funded and are considered in endangered or seriously endangered status, andgreen zone plans are at least 80 percent funded. The Multiemployer Pension Reform Act of 2014 (“MPRA”) created a new zone status called “critical and declining” or “Deep Red”.Plans are generally considered Deep Red if they are projected to become insolvent within 15 years. The FIP/RP Status Pending/Implemented column indicates plans for which a fundingimprovement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented by the trustees of each plan.

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, Forms 5500 of the plans were generally not available for the plan years ending in 2019.

The following table contains information about the Company’s significant multiemployer plans (in millions):

Pension ProtectionAct Zone Status Contributions

Pension FundEIN-Pension Plan Number

Plan Month/Day End Date 2020

FIP/RP StatusPending/Implemented 2020 2019

SurchargesImposed(1)

AmortizationProvisions

Minneapolis Food DistributingIndustry Pension Plan 416047047-001 12/31 Green No $ 11 $ 8 No ☐

Minneapolis Retail Meat Cuttersand Food Handlers Pension Fund 410905139-001 2/28 Red Implemented 9 7 No ☒

Minneapolis Retail Meat Cuttersand Food Handlers VariableAnnuity Pension Fund 832598425-001 12/31 NA NA 3 1 NA ☐

Central States, Southeast andSouthwest Areas Pension Fund 366044243-001 12/31 Deep Red Implemented 6 5 No ☒

UFCW Unions and ParticipatingEmployer Pension Fund(2) 526117495-001 12/31 Red Implemented 7 4 No ☐

Western Conference of TeamstersPension Plan Trust 916145047-001 12/31 Green No 13 12 No ☐

UFCW Unions and EmployersPension Plan 396069053-001 10/31 Deep Red Implemented 1 1 No ☒

All Other Multiemployer PensionPlans(3) 2 3

Total $ 52 $ 41

(1) PPA surcharges are 5 percent or 10 percent of eligible contributions and may not apply to all collective bargaining agreements or total contributions to each plan.(2) These multiemployer pension plans are associated with continued and discontinued operations.(3) All Other Multiemployer Pension Plans include 7 plans, none of which is 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:

Most Significant Collective Bargaining

Agreement

Pension FundRange of Collective BargainingAgreement Expiration Dates

Total CollectiveBargaining Agreements Expiration Date

% of Associates underCollective Bargaining

Agreement (1) Over 5% Contributions

2020

Minneapolis Food Distributing Industry Pension Plan 5/31/2022 1 5/31/2022 100.0% ☒

Minneapolis Retail Meat Cutters and Food HandlersPension Fund 3/4/2023 1 3/4/2023 100.0% ☒

Minneapolis Retail Meat Cutters and Food HandlersVariable Annuity Pension Fund 3/4/2023 1 3/4/2023 100.0% ☒

Central States, Southeast and Southwest Areas PensionFund 9/14/2019 - 5/31/2025 4 8/3/2024 39.2% ☐

UFCW Unions and Participating Employer PensionFund(2) 11/8/2020 2 11/8/2020 66.2% ☒

Western Conference of Teamsters Pension Plan Trust 5/31/2020 - 4/22/2023 15 9/19/2020 20.7% ☐

UFCW Unions and Employers Pension Plan 4/9/2022 1 4/9/2022 100.0% ☒

(1) Company participating employees in the most significant collective bargaining agreement as a percent of all Company employees participating in the respective fund.(2) These multiemployer pension plans are associated with continued and discontinued operations.

In connection with the closure of the Shop ‘n Save locations and the acquisition of Supervalu, we acquired a $35.7 million multiemployer pension plan withdrawal liability, under whichpayments will be made over the next 20 years and is included in Other long-term liabilities. In addition, the Company had withdrawal liabilities related to five of its other multi-employer plans of approximately $9.7 million.

In connection with the Company’s consolidation of distribution centers in the Pacific Northwest, during the second quarter of fiscal 2020, the Company recorded a $10.6 millionmultiemployer pension plan withdrawal liability, under which payments will be made over a one-year period beginning in fiscal 2022. The withdrawal liability is included in Other long-term liabilities and the withdrawal charge was recorded within Restructuring, acquisition and integration related expenses.

Accrued multiemployer pension plan withdrawal liabilities included in other-long-term liabilities were $51.6 million and $43.2 million, in fiscal 2020 and 2019 respectively for sevenmultiemployer plans.

The Company contributed $52.3 million, $41.3 million and $0.5 million in fiscal 2020, 2019 and 2018, respectively, to multiemployer pension plans.

Multiemployer Postretirement 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 contributionsbenefit active employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts topostretirement benefit plans from contribution amounts paid to benefit active employees.

The company contributed $88.5 million and $72.5 million in fiscal 2020 and fiscal 2019, respectively, to multiemployer health and welfare plans. If healthcare provisions within theseplans cannot be renegotiated in a manner that reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future.

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Collective Bargaining Agreements

As of August 1, 2020, we had approximately 28,300 employees. Approximately 11,800 employees are covered by 51 collective bargaining agreements. During fiscal 2020, 2 collectivebargaining agreements covering approximately 200 employees were renegotiated and 7 collective bargaining agreements covering approximately 1,600 employees expired without theirterms being renegotiated. Negotiations are expected to continue with the bargaining units representing the employees subject to those agreements. During fiscal 2021, 19 collectivebargaining agreements covering approximately 1,400 employees are scheduled to expire.

NOTE 15—INCOME TAXES

Income Tax (Benefit) Expense

For the fiscal year ended August 1, 2020, (loss) income before income taxes, consists of $(340.8) million from U.S. continuing operations and $(3.6) million) from foreign continuingoperations. For the fiscal year ended August 3, 2019, (loss) income before income taxes consists of $(351.6) million from U.S. continuing operations and $7.0 million from foreigncontinuing operations. For the fiscal year ended July 28, 2018, income before income taxes consists of $202.6 million from U.S. operations and $7.4 million from foreign operations.

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

(in thousands) 2020 2019 2018Continuing operations $ (90,445) $ (58,936) $ 47,215

Discontinued operations (4,465) (3,723) —

Total $ (94,910) $ (62,659) $ 47,215

The income tax expense (benefit) in continuing operations for fiscal 2020, 2019 and 2018 was allocated as follows:

(in thousands) 2020 2019 2018Income tax expense $ (90,445) $ (58,936) $ 47,215

Other comprehensive income (45,700) (33,854) 1,561

Total $ (136,145) $ (92,790) $ 48,776

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

(in thousands) Current Deferred TotalFiscal 2020

U.S. Federal $ (22,681) $ (45,315) $ (67,996)

State and Local 654 (23,058) (22,404)

Foreign 2,515 (2,560) (45)

$ (19,512) $ (70,933) $ (90,445)

Fiscal 2019

U.S. Federal $ 11,402 $ (59,528) $ (48,126)

State and Local (11,049) (1,767) (12,816)

Foreign 1,919 87 2,006

$ 2,272 $ (61,208) $ (58,936)

Fiscal 2018

U.S. Federal $ 46,210 $ (16,508) $ 29,702

State and Local 13,310 1,878 15,188

Foreign 2,374 (49) 2,325

$ 61,894 $ (14,679) $ 47,215

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

(in thousands) 2020 2019 2018Computed “expected” tax expense $ (72,335) $ (70,740) $ 57,499

State and local income tax, net of Federal income tax benefit (19,344) (17,524) 10,501

Non-deductible expenses 3,033 5,670 955

Tax effect of share-based compensation 2,715 125 149

General business credits (1,855) (1,757) (552)

Unrecognized tax benefits (7,441) (8,130) 618

Nondeductible goodwill impairment 44,226 32,619 —

Impacts related to the TCJA — — (21,719)

Impacts related to the CARES Act (39,497) — —

Other, net 53 801 (236)

Total income tax expense $ (90,445) $ (58,936) $ 47,215

Uncertain Tax Positions

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

(in thousands) 2020 2019 2018Unrecognized tax benefits at beginning of period $ 40,142 $ 1,104 $ 478

Unrecognized tax benefits added during the period 5,950 — 626

Unrecognized tax benefits assumed in a business combination — 49,566 —

Decreases in unrecognized tax benefits due to statute expiration (1,595) (10,528) —

Decreases in unrecognized tax benefits due to settlements (12,375) — —

Unrecognized tax benefits at end of period $ 32,122 $ 40,142 $ 1,104

In addition, the Company has $8.4 million paid on deposit to various governmental agencies to cover the above liability. The Company recognizes interest and penalties related tounrecognized tax benefits in income tax expense. For fiscal 2020, 2019 and 2018, total accrued interest and penalties was $7.0 million, $15.6 million, and $0.1 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 taxingjurisdiction or an agreement is reached between the taxing jurisdiction and the Company. As of August 1, 2020, the Company is no longer subject to federal income tax examinations forfiscal years before 2014 and in most states is no longer subject to state income tax examinations for fiscal years before 2008 and 2015 for Supervalu and United Natural Foods, Inc.,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 upto 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, it is reasonably possible that the amount of unrecognized tax benefits willdecrease by up to $8.3 million 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 August 1, 2020 and August 3, 2019 are presentedbelow:

(in thousands)August 1, 

2020 August 3, 

2019Deferred tax assets:

Inventories, principally due to additional costs inventoried for tax purposes $ 78 $ 2

Compensation and benefits related 103,312 100,942

Accounts receivable, principally due to allowances for uncollectible accounts 12,217 3,355

Accrued expenses 32,844 15,022

Net operating loss carryforwards 13,464 44,396

Other tax carryforwards (interest, charitable contributions) 6,971 10,143

Foreign tax credits 445 445

Intangible assets 67,226 5,869

Interest rate swap agreements 36,949 20,518

Other deferred tax assets 5,258 2,946

Total gross deferred tax assets 278,764 203,638

Less valuation allowance (3,098) (445)

Net deferred tax assets $ 275,666 $ 203,193

Deferred tax liabilities:

Plant and equipment, principally due to differences in depreciation $ 125,463 $ 117,195

Inventories 42,579 51,392

Intangible assets — 1,016

Other — 370

Total deferred tax liabilities 168,042 169,973

Net deferred tax assets $ 107,624 $ 33,220

CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 and contains significant business tax provision changes to the U.S. tax code,including temporary expansion to the deductibility of interest expense and the ability to treat qualified improvement property as eligible for bonus depreciation as well as the ability tocarry back net operating losses. In addition, the CARES Act changed the required filing of the Company’s federal income tax return from May 2020 to July 2020, and allowsremittances of employer FICA payments previously due between March 2020 and December 2020 to be deferred until December 2021 and December 2022. Prior to the application ofthe CARES Act, the Company had a deferred tax asset related to $203 million of federal net operating losses that were available for unlimited carryforward (but no carryback) pursuantto provisions of the 2017 Tax Cuts and Jobs Act, which permitted taxpayers to carryforward net operating losses indefinitely. The CARES Act provides the Company the ability to carrythese losses back at a 35% federal tax rate during the carry back periods, as compared to the current 21% federal tax rate. This resulted in a tax benefit of approximately $39.5 million,an estimate of which the Company recorded in the third quarter of Fiscal 2020, and which was finalized during the fourth quarter of fiscal 2020. The entire tax benefit associated withthe net operating loss carry back has been recorded as a current tax receivable in the Consolidated Balance Sheet as of August 1, 2020.

Tax Credits and Valuation Allowances

At August 1, 2020, the Company had gross deferred tax assets of approximately $278.8 million. The Company regularly reviews its deferred tax assets for recoverability to evaluatewhether 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 sourcesof future taxable income, including reversals of existing taxable temporary differences, tax planning strategies, history of taxable income, and projections of future income. TheCompany gives more significance to objectively verifiable evidence, such as the existence of deferred tax liabilities that are forecast to generate taxable income within the relevantcarryover 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 thedeferred tax assets will not be realized during the applicable recovery period. The Company has reviewed these factors

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in evaluating the recoverability of its deferred tax assets. As of August 1, 2020, the Company anticipates sufficient future taxable income to realize all of its deferred tax assets withinthe applicable recovery periods with the exception of certain foreign tax credits and state net operating losses. Accordingly, the Company has established valuation allowances againstthat portion of its 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 August 1, 2020, the Company had net operating loss carryforwards of approximately $4.1 million for federal income tax purposes. Of this amount, approximately $2.3 million of thefederal carryforwards are subject to an annual limitation of approximately $0.3 million under Internal Revenue Code Section 382. These Section 382-limited carryforwards expire atvarious times between fiscal years 2021 and 2027. As of August 1, 2020, the Company anticipates sufficient future taxable income over the periods in which the net operating losses canbe 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 ultimaterealization of net operating losses for federal purposes appears more likely than not at August 1, 2020 and correspondingly no valuation allowance has been established.

At August 1, 2020, the Company had disallowed charitable contribution carryforwards of approximately $26.7 million that are available for carryforward over five years. As of August1, 2020, the Company anticipates sufficient future taxable income to fully utilize the charitable contribution carryovers within the applicable five-year carryforward period andcorrespondingly, no valuation allowance has been established.

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 TCJA, and existing foreign taxcredits were utilized to offset the resulting liability. We have established a deferred tax asset for the remaining U.S. foreign tax credits of $0.4 million. Such credits are offset by avaluation allowance.

Effective Tax Rate

Our effective income tax rate for continuing operations was a benefit rate of 26.3% and 17.1% on pre-tax losses for fiscal 2020 and 2019 respectively and an expense rate of 22.1% onpre-tax income for fiscal 2018. The increase in the benefit rate for fiscal 2020 was primarily driven by the NOL carryback provisions of the CARES Act.

Other

Under ASU 2016-09, the Company accounts for excess tax benefits or tax deficiencies related to share-based payments in its provision for income taxes as opposed to additional paid-incapital. The Company recognized income tax expense of $4.2 million related to tax deficiencies for share-based payments for fiscal 2020, $1.6 million of income tax expense related totax deficiencies for share-based payments for fiscal 2019 and $1.1 million of income tax expense related to tax deficiencies for share-based payments for fiscal 2018.

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NOTE 16—EARNINGS PER SHARE

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

(in thousands, except per share data) 2020 2019 2018Basic weighted average shares outstanding 53,778 51,245 50,530

Net effect of dilutive stock awards based upon the treasury stock method — — 307

Diluted weighted average shares outstanding 53,778 51,245 50,837

Basic (loss) earnings per share: Continuing operations $ (4.81) $ (5.57) $ 3.22

Discontinued operations $ (0.28) $ 0.02 $ —

Basic (loss) income per share $ (5.10) $ (5.56) $ 3.22

Diluted (loss) earnings per share: Continuing operations $ (4.81) $ (5.57) $ 3.20

Discontinued operations(1) $ (0.28) $ 0.02 $ —

Diluted (loss) income per share $ (5.10) $ (5.56) $ 3.20

Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share 3,649 3,434 93

(1) The computation of diluted earnings per share from discontinued operations is calculated using diluted weighted average shares outstanding, which includes the net effect of dilutive stock awards, ofapproximately 0 thousand and 292 thousand shares for fiscal 2020 and 2019, respectively.

NOTE 17—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 andmanagement structure. The Wholesale reportable segment is the aggregation of two operating segments: U.S. Wholesale and Canada Wholesale. The U.S. Wholesale and CanadaWholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics. Reportable segments are reviewed on anannual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

The Wholesale reportable segment is engaged in the national distribution of natural, organic, specialty, produce, and conventional grocery and non-food products, and providing retailservices 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. TheCompany has additional operating segments that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of Other. Other includesa manufacturing division, which engages in the importing, roasting, packaging, and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items andconfections, and the Company’s branded product lines. Other also includes certain corporate operating expenses that are not allocated to operating segments, which include, among otherexpenses, 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 of the acquired Supervalu business.

Segment earnings include revenues and costs attributable to each of the respective business segments and allocated corporate overhead, based on the segment’s estimated consumptionof corporately managed resources. The Company allocates certain corporate capital expenditures and identifiable assets to its business segments and retains certain depreciation expenserelated to those assets within Other. In fiscal 2020, the Company changed its measurement of segment profit, which resulted in additional corporate expenses that were previouslyincluded in Other now being attributed to the Wholesale segment, and updated its segment profit measure to Adjusted EBITDA. Prior period amounts have been recast to reflect thesechanges in segment profit. Non-operating expenses that are not allocated to the operating segments are under the caption of Unallocated (Income)/Expenses.

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The following table provides continuing operations net sales and Adjusted EBITDA by reportable segment and reconciles that information to (Loss) income from continuing operationsbefore income taxes:

(in thousands) 2020 2019 2018

Net sales: Wholesale(1) $ 25,496,597 $ 21,530,183 $ 10,169,840

Retail 2,330,694 1,653,596 —

Other 227,984 234,838 228,465

Eliminations (1,541,008) (1,111,161) (171,622)

Total Net sales $ 26,514,267 $ 22,307,456 $ 10,226,683

Continuing operations Adjusted EBITDA: Wholesale 591,028 462,996 343,104

Retail 86,401 34,149 —

Other (15,903) 41,918 12,337

Eliminations (2,464) (1,162) 3,425

Adjustments: Net income attributable to noncontrolling interests 4,929 107 —

Total other expense, net (148,839) (144,685) (14,480)

Depreciation and amortization (281,535) (247,746) (87,631)

Share-based compensation (33,689) (40,495) (25,783)

Restructuring, impairment, acquisition, and integration related expenses (86,383) (148,195) (9,738)

Goodwill and asset impairment (425,405) (292,770) (11,242)

(Loss) gain on sale of assets (17,132) 499 —

Note receivable and lost customer bankruptcy charge (12,516) — —

Inventory fair value adjustment — (10,463) —

Legal reserve charge (1,196) 1,390 —

Other retail expense (1,750) — —

(Loss) income from continuing operations before income taxes $ (344,454) $ (344,457) $ 209,992

Depreciation and amortization: Wholesale $ 267,236 $ 227,946 $ 84,971

Retail 3,493 6,430 —

Other 10,806 13,370 2,660

Total depreciation and amortization $ 281,535 $ 247,746 $ 87,631

Capital expenditures: Wholesale $ 159,758 $ 206,812 $ 43,402

Retail 12,344 20,660 —

Other 466 1,005 1,206

Total capital expenditures $ 172,568 $ 228,477 $ 44,608

(1) As presented in Note 3—Revenue Recognition, for fiscal 2020 and 2019, the Company recorded $1,319 million and $937 million, respectively, within Net sales in its Wholesale reportablesegment attributable to Wholesale sales to its Retail segment that have been eliminated upon consolidation. For fiscal 2020 and 2019, the Company recorded $0.0 million and $12.4 million,respectively, within Net sales in its Wholesale reportable segment attributable to discontinued operations inter-company product purchases for certain retail banners it sold with a supplyagreement.

Total assets of continuing operations by reportable segment were as follows:

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(in thousands) August 1, 

2020 August 3, 

2019

Assets: Wholesale $ 6,588,836 $ 6,246,306

Retail 542,470 545,050

Other 501,468 362,100

Eliminations (54,784) (45,072)

Total assets of continuing operations $ 7,577,990 $ 7,108,384

NOTE 18—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 August 1, 2020. These guarantees weregenerally 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 obligationswith remaining terms that range from less than one year to ten years, with a weighted average remaining term of approximately six years. For each guarantee issued, if the wholesalecustomer 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 indemnificationagreements or personal guarantees of the primary obligor/retailer.

The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance. As of August 1, 2020, the maximum amount ofundiscounted payments the Company would be required to make in the event of default of all guarantees was $32.3 million ($26.9 million on a discounted basis). Based on theindemnification agreements, personal guarantees and results of the reviews of performance risk, the Company believes the likelihood that it will be required to assume a material amountof these obligations is remote. Accordingly, no amount has been recorded in the Consolidated Balance Sheets for these contingent obligations under the Company’s guaranteearrangements as the fair value has been determined to be de minimis.

The Company is contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. The Company could be required tosatisfy the obligations under the leases if any of the assignees are unable to fulfill their lease obligations. Due to the wide distribution of the Company’s lease assignments among thirdparties, and various other remedies available, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote. For leases thathave been assigned, the Company has recorded the associated right of use operating lease assets and obligations within the Consolidated Balance Sheets. No associated lessorreceivables are reflected on the Consolidated Balance Sheets; however, within Note 12—Leases expected cash flows from lease receipts reflecting the assignees payments to thelandlord are reflected as Lease Receipts within the future maturity table, along with the Wholesale customers future Lease Receipts. For the Company’s lease guarantee arrangements,no amounts have been recorded within the Consolidated Balance Sheets as the fair value has been determined to be de minimis.

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, whichindemnities may be secured by operation of law or otherwise. These agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into forthe 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 toindemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligations could result in a material liability, theCompany 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 obligationsas 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 commitmentsand 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 theexpected settlement of the self-insurance claims that underlie the Company’s commitments, the Company believes that such contingent liabilities will continue to decline. Subsequent tothe 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 obligoron 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 thatthe likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly,

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no amount has been recorded in the Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis.

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 obligationsof 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 setforth 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 (“MoranFoods”), 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 Companyalso entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company is providing Save-A-Lot various technical, human resources,finance and other operational services for a term of five years, subject to termination provisions that can be exercised by each party. The initial annual base charge under the ServicesAgreement is $30 million, subject to adjustments. The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of theperformance 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, thepurchaser 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 thefair 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 August 1, 2020, theCompany had approximately $181 million of non-cancelable future purchase obligations.

Legal Proceedings

In December 2008, a class action complaint was filed in the United States District Court for the Western District of Wisconsin against Supervalu alleging that a 2003 transactionbetween Supervalu and C&S Wholesale Grocers, Inc. (“C&S”) was a conspiracy to restrain trade and allocate markets. As previously disclosed, the Company settled with the certainplaintiffs in November 2017. The remaining plaintiff (the “New England plaintiff”) was not a party to the settlement and pursued its individual claims and potential class action claimsagainst Supervalu. On February 15, 2018, Supervalu filed a summary judgment and Daubert motion and the New England plaintiff filed a motion for class certification and on July 27,2018, the District Court granted Supervalu’s motions. The New England plaintiff appealed to the 8th Circuit on August 15, 2018, and a hearing was held on October 15, 2019. In thesecond quarter of fiscal 2020, the 8th Circuit Court of Appeals denied the appeal, and this matter is now closed.

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 opioidepidemic. Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 38 suits pending in the United States District Court for the NorthernDistrict of Ohio where over 1,800 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. and the Company (the “Stock Purchase Agreement”), New Albertson’s Inc. is defending and indemnifying UNFI in a majority of the cases under areservation 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, alldefendants 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. UNFI is vigorouslydefending these matters, which it believes are without merit.

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., etal, 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 thegovernment, as a part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that defendants match competitorprices. 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 allegedFCA damages against Supervalu and New Albertsons in excess of $100 million, not including trebling and statutory penalties. For the majority of the relevant period Supervalu and NewAlbertson’s operated as a combined company. In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant the Stock Purchase Agreement. Based on the claimsthat are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value

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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 ofrelators’ summary judgment motions finding that defendants’ lower matched prices are the usual and customary prices and that Medicare Part D and Medicaid were entitled to thoseprices. On July 2, 2020, the Court granted defendants’ summary judgment motion and denied relators’ motion, dismissing the case. On July 9, 2020 the relators filed a notice of appealwith the 7th Circuit Court of Appeals.

In November 2018, a putative nationwide class action was filed in Rhode Island state court, which the Company removed to U.S. District Court for the District of Rhode Island. In NorthCountry Store v. United Natural Foods, Inc., plaintiff asserts that the Company made false representations about the nature of fuel surcharges charged to customers and asserts claims foralleged violations of Connecticut’s Unfair Trade Practices Act, breach of contract, unjust enrichment and breach of the covenant of good faith and fair dealing arising out of theCompany’s fuel surcharge practices. On March 5, 2019, the Company answered the complaint denying the allegations. At a court-ordered mediation on October 15, 2019, the Companyreached an agreement, which is immaterial in amount, to avoid costs and uncertainty of litigation. On August 10, 2020, the Court granted final approval of the settlement and this matteris now closed.

From time to time, the Company receives notice of claims or potential claims, becomes involved in litigation, alternative dispute resolution such as arbitration, or other legal andregulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law; pension plans; labor union disputes, includingunfair labor practices, such as claims for back-pay it the context of labor contract negotiations; supplier, customer and service provider contract terms and claims including matter relatedto supplier or customer insolvency or general inability to pay obligations as they become due; real estate and environmental matters, including claims in connection with our ownershipand 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 towhich 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 tovary materially from current expectations. We regularly monitor our exposure to the loss contingencies associated with these matters and may from time to time change our predictionswith respect to outcomes and estimates with respect to related costs and exposures. As of August 1, 2020, no material accrued obligations, individually or in the aggregate, have beenrecorded 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 ofprevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to currentpredictions 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 ourfinancial condition, results of operations or cash flows.

NOTE 19—DISCONTINUED OPERATIONS

In conjunction with the Supervalu acquisition, the Company announced its plan to sell the remaining acquired retail operations of Supervalu. Since the acquisition, the Company soldHornbacher’s, and sold and exited the retail operations of certain Shoppers locations, Shop ‘n Save St. Louis and Shop ‘n Save East. As discussed further in Note 1—SignificantAccounting Policies, in the fourth quarter of fiscal 2020, the Company determined Retail no longer qualified for held for sale presentation and the results of operations, financial positionand cash flows of Retail have been revised in order to present Retail within continuing operations. Subsequent to the presentation changes in the fourth quarter of fiscal 2020,discontinued operations contains the historical results of operations, financial position and cash flows of Hornbacher’s, certain Shoppers locations, Shop ‘n Save St. Louis and Shop ‘nSave East. As of August 1, 2020, only certain Shoppers locations are contained in remaining disposal groups that continue to be classified as operations held for sale as discontinuedoperations.

In the second quarter of fiscal 2020, the Company entered into agreements to sell 13 Shoppers stores and decided to close six locations. During fiscal 2020, within discontinuedoperations the Company incurred approximately $31.1 million in pre-tax aggregate costs and charges related to Shoppers stores that remain within discontinued operations, consisting of$24.6 million of operating losses, severance costs and transaction costs during the period of wind-down and $6.5 million of property and equipment impairment charges related toimpairment reviews. In the second, third and fourth quarters of fiscal 2020, the Company reviewed the recoverability of the remaining assets held for sale and assessed the remainingcomposition of the Shoppers disposal group based on updated fair values.

In fiscal 2019, the Company closed three of its eight Shop ‘n Save East stores and sold the remaining five Shop ‘n Save East stores to GIANT Food Store, LLC, and did not incur a gainor loss on the sale of this disposal group. The Company closed the remaining Shop ‘n Save St. Louis retail stores and the distribution center that were not sold prior to the Supervaluacquisition date.

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In fiscal 2019, the Company completed the sale of seven of its eight Hornbacher's locations, as well as a Hornbacher’s store that was previously being developed in West Fargo, NorthDakota, to Coborn's Inc. (“Coborn’s”). The Company did not incur a gain or loss on the sale of this disposal group. The Hornbacher’s store in Grand Forks, North Dakota was notincluded in the sale to Coborn’s and has closed pursuant to the terms of the definitive agreement. As part of the sale, Coborn's entered into a long-term agreement for the Company toserve as the primary supplier of the Hornbacher's locations and expand its existing supply arrangements for other Coborn’s locations.

In the fourth quarter of fiscal 2019, the Company completed the sale of the pharmacy prescription files and inventory of the Shoppers disposal group.

Operating results of discontinued operations are summarized below:

(in thousands) 2020 2019(1)

(41 weeks)Net sales $ 228,523 $ 440,450

Cost of sales 162,099 312,200

Gross profit 66,424 128,250

Operating expenses 52,625 105,981

Restructuring expenses and charges 33,470 24,944

Operating loss (19,671) (2,675)

Other (income) expense, net (4) 150

Loss from discontinued operations before income taxes (19,667) (2,825)

Benefit for income taxes (4,465) (3,723)

(Loss) income from discontinued operations, net of tax $ (15,202) $ 898

(1) These results reflect retail operations from the Supervalu acquisition date of October 22, 2018 to August 3, 2019.

The Company recorded $0.0 million and $12.4 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in fiscal2020 and 2019, respectively, related to retail disposal groups, which were sold with a supply agreement and were classified within discontinued operations prior to their disposal. Theseamounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No net sales were recorded within continuingoperations for retail banners that the Company disposed of and expects to dispose of without a supply agreement, as they have been eliminated upon consolidation within continuingoperations and amounted to $125.0 million and $221.4 million in fiscal 2020 and 2019, respectively.

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The carrying amounts (in thousands) of major classes of assets and liabilities that were classified as held-for-sale on the Consolidated Balance Sheets follows in the table below.

(in thousands) August 1, 2020 August 3, 2019

Current assets Cash and cash equivalents $ 119 $ 799

Receivables, net 350 158

Inventories 4,233 18,885

Other current assets 365 1,152

Total current assets of discontinued operations 5,067 20,994

Long-term assets Property and equipment 3,450 44,489

Other assets 465 468

Total long-term assets of discontinued operations 3,915 44,957

Total assets of discontinued operations $ 8,982 $ 65,951

Current liabilities Accounts payable $ 3,613 $ 6,181

Accrued compensation and benefits 4,501 3,637

Other current liabilities 3,324 5,699

Total current liabilities of discontinued operations 11,438 15,517

Long-term liabilities Other long-term liabilities 1,738 770

Total liabilities of discontinued operations 13,176 16,287

Net (liabilities) assets of discontinued operations $ (4,194) $ 49,664

NOTE 20—IMMATERIAL CORRECTION TO PRIOR PERIOD FINANCIAL STATEMENTS

For certain of the Company’s subsidiaries prior to fiscal 2020, the Company recognized vendor consideration for vendor rebate programs, product defect allowances, slotting fees andsimilar programs when received in connection with inventory procurement, instead of deferring the recognition of the vendor consideration as a reduction of inventory on itsConsolidated Balance Sheets and subsequently recognizing the vendor consideration within Cost of goods sold when the inventory was sold.

The Company considered both the quantitative and qualitative factors within the provisions of SEC Staff Accounting Bulletin No. 99, Materiality, and Staff Accounting Bulletin No.108, Considering the Effect of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. Based on evaluation of the misstatements on anindividual and aggregate basis, the Company concluded the prior period errors were immaterial to the previously issued consolidated financial statements. As such, the Company haselected to correct the identified error in the prior periods within the current Consolidated Financial Statements. Components of this assessment included that the identified misstatementsaccumulated over several years and the income statement effect of the correction in any period never materially impacted results of operations.

Previously reported balances were revised for these identified misstatements. The revisions reflect the accounting treatment that would have been in place had the vendor considerationbeen appropriately deferred against the procured inventory and recognized when the inventory was sold. In doing so, balances in the Consolidated Financial Statements to which thisnote relates have been adjusted to reflect the correction in the proper periods.

The correction of the error resulted in a decrease to Inventories of $9.0 million in fiscal 2019 and an increase to Deferred income taxes (asset) of $2.4 million in fiscal 2019. Thisresulted in a decrease to Retained earnings of $6.6 million, $6.9 million and $4.0 million for fiscal 2019, 2018 and 2017, respectively.

The correction of the error resulted in a Cost of sales decrease of $0.4 million and an increase of $2.8 million in fiscal 2019 and 2018, respectively, and an increase to (Benefit) provisionfor income taxes of $0.1 million and $0.1 million in fiscal 2019 and 2018, respectively.

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NOTE 21—QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly data provided below has been revised, as compared to the selected quarterly financial data presented in the Company’s Quarterly Reports on Form 10-Q, to presentRetail within continuing operations of the Company’s Consolidated Financial Statements and for the immaterial correction discussed within Note 20—Immaterial Correction to PriorPeriod Financial Statements. In the first quarter of fiscal 2019, the Company acquired Supervalu and recognized certain of its retail disposal groups as businesses held for sale asdiscontinued operations, which impacted Net (loss) income attributable to United Natural Foods, Inc. and basic and total basic and diluted earnings per share.

The following table sets forth certain interim financial information for fiscal 2020 (52 weeks) and 2019 (53 weeks):

2020

(In thousands except per share data)First

Quarter SecondQuarter

ThirdQuarter

FourthQuarter(1) Full Year(1)

Net sales $ 6,296,612 $ 6,431,382 $ 7,031,718 $ 6,754,555 $ 26,514,267

Gross profit 907,211 917,325 1,050,232 1,000,024 3,874,792

Net (loss) income from continuing operations (387,434) (13,984) 94,447 52,962 (254,009)

(Loss) income from discontinued operations, net of tax 4,026 (16,076) (4,078) 926 (15,202)

Net (loss) income including noncontrolling interests (383,408) (30,060) 90,369 53,888 (269,211)

Net (loss) income attributable to United Natural Foods, Inc. (383,927) (30,710) 88,131 52,366 (274,140)

Basic (loss) earnings per share:

Continuing operations $ (7.29) $ (0.27) $ 1.72 $ 0.94 $ (4.81)

Basic (loss) earnings per share $ (7.21) $ (0.57) $ 1.64 $ 0.96 $ (5.10)

Diluted (loss) earnings per share: Continuing operations $ (7.29) $ (0.27) $ 1.67 $ 0.88 $ (4.81)

Diluted (loss) earnings per share $ (7.21) $ (0.57) $ 1.60 $ 0.89 $ (5.10)

(1) Fiscal 2020 results reflect 52 weeks of operating results, as compared to fiscal 2019 53 weeks. The fourth quarter of fiscal 2020 includes 13 weeks and the fourth quarter of fiscal 2019 contains 14 weeks.

2019

(In thousands except per share data)First

Quarter SecondQuarter

ThirdQuarter

FourthQuarter Full Year

Net sales 2,879,158 6,449,542 6,247,462 6,731,294 $ 22,307,456

Gross profit 419,367 898,087 922,173 968,979 3,208,606

Net income from continuing operations (19,579) (344,241) 56,493 21,806 (285,521)

Income from discontinued operations, net of tax 288 2,345 651 (2,386) 898

Net income (loss) including noncontrolling interests (19,291) (341,896) 57,144 19,420 (284,623)

Net income (loss) attributable to United Natural Foods, Inc. (19,294) (341,725) 57,092 19,197 (284,730)

Basic earnings per share:

Continuing operations $ (0.39) $ (6.77) $ 1.11 $ 0.41 $ (5.57)

Basic income (loss) per share $ (0.38) $ (6.72) $ 1.12 $ 0.36 $ (5.56)

Diluted earnings per share: Continuing operations $ (0.39) $ (6.77) $ 1.11 $ 0.41 $ (5.57)

Diluted income (loss) per share $ (0.38) $ (6.72) $ 1.12 $ 0.36 $ (5.56)

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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 andoperation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) 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 procedureswere 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 Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by ourBoard of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles 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 aresubject 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 August 1, 2020. Inmaking 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 August 1, 2020, our internal control over financial reporting was effectivebased on those criteria at the reasonable assurance level.

Report of the Independent Registered Public Accounting Firm.

The effectiveness of our internal control over financial reporting as of August 1, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in itsattestation report which is included in Item 8. Financial Statements and Supplementary Data 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 Exchange Act Rule 13a-15(f)or 15d-15(f)) occurred during the fiscal quarter ended August 1,2020 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

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PART III.

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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 January 12,2021 (the “2020 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 our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and employees within our finance,operations, and sales departments. Our code of conduct and ethics is publicly available on our website at www.unfi.com and is available free of charge by writing to United NaturalFoods, 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 2020 Proxy Statement under the captions “Director Compensation,” “Executive Compensation,” “CompensationDiscussion and Analysis,” “Executive Compensation Tables,” “Potential Payments Upon Termination or Change-in-Control,” “CEO Pay Ratio,” “Compensation Risk,” “CompensationCommittee 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 2020 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 2020 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 2020 Proxy Statement under the captions “Fees Paid to KPMG LLP” and “Policy on Audit Committee Pre-Approval ofAudit and Permissible Non-Audit Services,” and is incorporated herein by this reference.

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PART IV.

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as a part of this Annual Report.

1. Financial Statements. The Financial Statements listed in the Index to Financial Statements in Item 8 hereof are filed as part of this Annual Report.

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

3. Exhibits. The Exhibits listed in the Exhibit Index are filed as part of this Annual Report.

ITEM 16.    FORM 10-K SUMMARY

None.

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EXHIBIT INDEX

Exhibit No. Description

2.1

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 (File No. 001-15723)).

2.2

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., SUPERVALUINC. and SUPERVALU Enterprises, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 10, 2018 (File No. 001-15723)).

3.1

Certificate of Incorporation of the Registrant, as amended (restated for SEC filing purposes only) (incorporated by reference to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended January 1, 2015 (File No. 001-15723)).

3.2

Fourth Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 19, 2018 (FileNo. 001-15723)).

4.1

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-Kfor the year ended August 1, 2009 (File No. 001-15723)).

4.2

Description of the Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934. (incorporated by reference to the Registrant’sAnnual Report on Form 10-K for the year ended August 3, 2019 (File No. 001-15723)).

10.1** 2002 Stock Incentive Plan (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 31, 2003 (File No. 001-15723)).10.2**

United Natural Foods, Inc. Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed onDecember 21, 2010 (File No. 001-15723)).

10.3**

Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to theRegistrant’s Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 001-15723)).

10.4**

Form of Non-Statutory Stock Option Award Agreement, pursuant to the 2002 Stock Incentive Plan (Employee) (incorporated by reference to the Registrant’sAnnual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).

10.5**

Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Director) (incorporated by reference tothe Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).

10.6**

Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Employee) (incorporated by referenceto the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).

10.7**

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 (FileNo. 001-15723)) (the “2012 Equity Plan”).

10.8**

Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Employee, pursuant to the 2012 Equity Plan (incorporated by reference to theRegistrant’s Quarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 001-15723)).

10.9**

Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Director, pursuant to the 2012 Equity Plan (incorporated by reference to the Registrant’sQuarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 001-15723)).

10.10**

United Natural Foods, Inc. Amended and Restated 2012 Equity Incentive Plan (incorporated by reference to the Registrant’s Definitive Proxy Statement onSchedule 14A for the Registrant’s Annual Meeting of Stockholders held on December 16, 2015 (File No. 001-15723)) (the “A&R 2012 Equity Plan”).

10.11**

Form of Terms and Conditions of Grant of (Pro-Rata Vesting) Restricted Share Units to Employee, pursuant to the A&R 2012 Equity Plan (incorporated byreference to the Registrant’s Annual Report on Form 10-K for the year ended July 30, 2016 (File No. 001-15723)).

10.12**

Form of Terms and Conditions of Grant of (Cliff Vesting) Restricted Share Units to Employee, pursuant to the A&R 2012 Equity Plan (incorporated by referenceto the Registrant’s Annual Report on Form 10-K for the year ended July 30, 2016 (File No. 001-15723)).

10.13**

Revised Form Indemnification Agreement for Directors and Officers (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year endedAugust 3, 2013 (File No. 001-15723)).

10.14+

Agreement for the Distribution of Products between the Registrant and Whole Foods Market Distribution, Inc., effective September 28, 2015 (incorporated byreference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2015 (File No. 001-15723)).

10.15**

Form of Restricted Share Unit Award Agreement pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on November 2, 2016 (File No. 001-15723)).

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Exhibit No. Description

10.16**

Form of Restricted Share Unit Award Agreement pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on November 2, 2016 (File No. 001-15723)).

10.17**

Form of Terms and Conditions of Grant of Restricted Share Units to Employee pursuant to the A&R 2012 Equity Plan. (incorporated by reference to theRegistrant’s Annual Report on Form 10-K for the year ended July 29, 2017 (File No. 001-15723)).

10.18 +

Loan Agreement dated August 30, 2018, by and among the Registrant, United Natural Foods West, Inc., UNFI Canada, Inc., the financial institutions that areparties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch) and the other parties thereto (incorporated byreference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2018 (File No. 001-15723)).

10.19

First Amendment to Loan Agreement, dated October 19, 2018, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., the financialinstitutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other parties thereto(incorporated by reference to the Registrant’s Current Report on Form 8-K filed on October 25, 2018 (File No. 001-15723)).

10.20

Second Amendment to Loan Agreement, dated January 24, 2019, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., thefinancial institutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other partiesthereto (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed on March 7, 2019 (File No. 001-15723)).

10.21*

Third Amendment to Loan Agreement, dated August 14, 2020, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., the financialinstitutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other parties thereto.

10.22

Term Loan Agreement, dated October 22, 2018, by and among United Natural Foods, Inc., SUPERVALU INC., Goldman Sachs Bank USA and the lenders partythereto (incorporated by reference to Registrant’s Current Report on Form 8-K filed on October 25, 2018 (File No. 001-15723)).

10.23**

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. andSteven L. Spinner (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).

10.24**

Amendment to Amended and Restated Employment Agreement, dated as of February 6, 2020, by and between the Registrant and Steven L. Spinner (incorporatedby reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).

10.25**

Employment Agreement, dated as of November 5, 2018 and effective as of October 22, 2018, by and among United Natural Foods, Inc. and Sean F. Griffin(incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).

10.26**

Amendment to Employment Agreement, dated as of February 6, 2020, by and between the Registrant and Sean F. Griffin (incorporated by reference to theRegistrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).

10.27**

Form of Amended and Restated Severance Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 29, 2019 (FileNo. 001-15723)).

10.28**

Form of Second Amended and Restated Change in Control Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed onNovember 8, 2018 (File No. 001-15723)).

10.29**

Terms and Conditions of Grant of Restricted Share Units pursuant to the Second Amended and Restated 2012 Equity Incentive Plan (incorporated by reference tothe Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).

10.30**

Form of Performance-Based Vesting Restricted Share Unit Award Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed onNovember 8, 2018 (File No. 001-15723)).

10.31**

Amended and Restated Indemnification Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No.001-15723)).

10.32**

Offer Letter, effective February 9, 2020, between John W. Howard, Chief Financial Officer, and the Registrant (incorporated by reference to the Registrant’sQuarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).

10.33**

Senior Management Annual Cash Incentive Plan, as amended (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter endedNovember 1, 2019 (File No. 001-15723)).

10.34**

United Natural Foods, Inc. 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Definitive Proxy Statement on Schedule 14A for theRegistrant’s Annual Meeting of Stockholders held on December 18, 2019 (File No. 001-15723)) (the “2020 Equity Incentive Plan”).

10.35**

Form of RSU Award Agreement (Director) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Reporton Form 8-K, filed on December 19, 2019 (File No. 001-15723)).

10.36**

Form of RSU Award Agreement (Employee I) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s CurrentReport on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).

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Exhibit No. Description

10.37**

Form of RSU Award Agreement (Employee II) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s CurrentReport on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).

10.38**

Form of PSU Award Agreement pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).

10.39**

Form of RSU Award Agreement (Director) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning March 2020) (incorporated byreference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).

10.40**

Form of RSU Award Agreement (Employee I) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning March 2020) (incorporated byreference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).

10.41* ** Form of RSU Award Agreement (Employee) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning September 2020).10.42* ** Form of PSU Award Agreement pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning September 2020).21* Subsidiaries of the Registrant.23.1* Consent of Independent Registered Public Accounting Firm.31.1* Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2* Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1* Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2* Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.101*

The following materials from the United Natural Foods, Inc.’s Annual Report on Form 10-K for the fiscal year ended August 1, 2020, formatted in Inline XBRL(eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements ofComprehensive Income, (iv) Consolidated Statement of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated FinancialStatements.

104

The cover page from the Registrant’s Annual Report on Form 10-K for the year ended August 1, 2020, filed with the SEC on September 29, 2020, formatted inInline 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.

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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 undersignedthereunto duly authorized.

UNITED NATURAL FOODS, INC. /s/ JOHN W. HOWARD

John W. HowardChief Financial Officer (Principal Financial Officer)

Dated: September 29, 2020

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 onthe dates indicated.

Name Title Date/s/ STEVEN L. SPINNER Chief Executive Officer and Chairman (Principal Executive Officer) September 29, 2020

Steven L. Spinner /s/ JOHN W. HOWARD Chief Financial Officer (Principal Financial Officer) September 29, 2020

John W. Howard /s/ DAVID W. JOHNSON Chief Accounting Officer (Principal Accounting Officer) September 29, 2020

David W. Johnson /s/ ERIC F. ARTZ Director September 29, 2020

Eric F. Artz /s/ ANN TORRE BATES Director September 29, 2020

Ann Torre Bates /s/ DENISE M. CLARK Director September 29, 2020

Denise M. Clark /s/ DAPHNE J. DUFRESNE Director September 29, 2020

Daphne J. Dufresne /s/ MICHAEL S. FUNK Director September 29, 2020

Michael S. Funk /s/ JAMES P. HEFFERNAN Director September 29, 2020

James P. Heffernan /s/ JAMES L. MUEHLBAUER Director September 29, 2020

James L. Muehlbauer /s/ PETER A. ROY Director September 29, 2020

Peter A. Roy /s/ JACK L. STAHL Director September 29, 2020

Jack L. Stahl

133

Exhibit 10.21THIRD AMENDMENT TO LOAN AGREEMENT

This THIRD AMENDMENT (this “Amendment”) dated as of August 14, 2020, to the Loan Agreement, dated as of August 30, 2018 (as amended orotherwise modified prior to the date hereof, the “Loan Agreement”; the Loan Agreement, as amended by this Amendment, the “Amended Loan Agreement”),by and among UNITED  NATURAL  FOODS,  INC., a Delaware corporation (“UNFI”), UNITED  NATURAL  FOODS  WEST,  INC., a Californiacorporation (“UNFW”) and certain Subsidiaries of UNFI party thereto from time to time that become borrowers (each such Subsidiary, together with UNFI andUNFW, collectively, the “U.S. Borrowers”), UNFI CANADA, INC., a corporation organized under the Canada Business Corporations Act (the “CanadianBorrower” and, together with the U.S. Borrowers, collectively, the “Borrowers”), the financial institutions party to the Loan Agreement from time to time aslenders (collectively, “Lenders”), BANK  OF  AMERICA,  N.A., a national banking association, as administrative agent for the Lenders (“AdministrativeAgent”), BANK OF AMERICA, N.A. (acting through its Canada branch), as Canadian agent for the Lenders (“Canadian Agent”), and the other parties partythereto.

WHEREAS, the Borrowers have requested that the Loan Agreement be amended as set forth in the pages of the Loan Agreement attached asExhibit I hereto.

WHEREAS, this Amendment includes amendments to the Loan Agreement that are subject to the approval of the Supermajority Lenders andthat will become effective on the Amendment Effective Date (as defined below) on the terms and subject to the conditions set forth herein.

WHEREAS, the Lenders party hereto (collectively, the “Consenting Lenders” and, each, a “Consenting Lender”) constitute the SupermajorityLenders under the Loan Agreement immediately prior to the effectiveness of this Amendment, and each Consenting Lender consents to this Amendment.

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, capitalized terms which are defined in the Loan Agreement areused herein as therein defined.

SECTION 2. Amendment. Each of the parties hereto agrees that, effective on the Amendment Effective Date, the Loan Agreement shall beamended to (i) delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text(indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Loan Agreement attached as Exhibit Ihereto.

SECTION 3. Effectiveness. This Amendment shall become effective as of the date (the “Amendment Effective Date”) on which (a) theAdministrative Agent (or its counsel) shall have received executed counterparts of this Amendment that, when taken together, bear the signatures of theAdministrative Agent, each Borrower and the Consenting Lenders, (b) the Administrative Agent shall have received from the Borrowers all fees and expensesrequired to be paid by (or on behalf of) the Borrowers to the Administrative Agent pursuant to any fee letter on or before the date hereof and (c) the Borrowersshall have (or shall substantially contemporaneously) paid in full in cash to each Consenting Lender a consent fee in an amount equal to 4.0 basis points of suchLender’s aggregate principal amount of Aggregate Commitments outstanding as of the date hereof.

SECTION 4. Representations and Warranties. Each Borrower hereby represents and warrants that, immediately after giving effect to theprovisions of this Amendment, the following statements are true and correct:

(a) the execution, delivery and performance of this Amendment and the Amended Loan Agreement have been duly authorized by allnecessary corporate or other organizational action on the part of such Borrower;

(b) this Amendment has been duly executed and delivered by such Borrower and is a legal, valid and binding obligation of such Borrower,enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement ofcreditors’ rights generally and general principles of equity;

(c) no Default or Event of Default has occurred and is continuing; and

(d) the representations and warranties of each Obligor in the Loan Documents are true and correct in all material respects on the date hereofafter giving effect to the amendments contemplated by this Amendment (except for representations and warranties that are subject to materiality or materialadverse effect qualifications, which representations and warranties shall be true and correct in all respects, and except for representations and warranties thatexpressly relate to an earlier date, which representations and warranties shall be true and correct in all material respects as of such earlier date).

SECTION 5. Effect of Amendment.

(a) Except as expressly set forth herein, this Amendment shall not (i) by implication or otherwise limit, impair, constitute a waiver of orotherwise affect the rights and remedies of the Lenders, the Administrative Agent or the Collateral Agent under the Loan Agreement or any other LoanDocument or (ii) alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the existing LoanAgreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle anyBorrower to consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements containedin the Loan Agreement or any other Loan Document in similar or different circumstances.

(b) From and after the Amendment Effective Date, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof”,“herein”, or words of like import, and each reference to the Loan Agreement in any other Loan Document shall be deemed a reference to the Amended LoanAgreement. This Amendment shall constitute a “Loan Document” for all purposes of the Loan Agreement, the Amended Loan Agreement and the other LoanDocuments.

SECTION 6.  Reaffirmation. Each Borrower acknowledges and agrees that each Loan Document to which it is a party is hereby confirmedand ratified and shall remain in full force and effect according to its respective terms (in the case of the Loan Agreement, as amended hereby).

SECTION 7. Miscellaneous.

(a) Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If anyprovision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of thisAmendment shall remain in full force and effect.

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(b) This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each ofwhich counterparts shall be an original, but all of which shall together constitute one and the same instrument. Any signature to this Amendment may bedelivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New YorkElectronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly deliveredand be valid and effective for all purposes to the fullest extent permitted by applicable law. No amendment to or modification of this Amendment shall beeffective unless in writing and signed by each party hereto.

(c) This Amendment shall be governed by the laws of the State of New York, without giving effect to any conflict of law principles (butgiving effect to federal laws relating to national banks).

(d) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the SupremeCourt of the State of New York sitting in New York, New York and of the United States District Court of the Southern District of New York, and any appellatecourt from any thereof, in any action or proceeding arising out of or relating to this Amendment, or for recognition or enforcement of any judgment, and each ofthe parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in suchNew York State court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action orproceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in thisAmendment shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Amendment in the courts of anyjurisdiction.

(e) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 14.3.1 of the Loan Agreement.Nothing in this Amendment will affect the right of any party to this Amendment to serve process in any other manner permitted by law.

(f) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANYRIGHT  IT  MAY  HAVE  TO  A  TRIAL  BY  JURY  IN  ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT  OF  ORRELATING TO THIS AMENDMENT. EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OFANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OFLITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (b)  ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIESHERETO HAVE  BEEN  INDUCED  TO  ENTER  INTO  THIS  AMENDMENT  BY,  AMONG OTHER  THINGS,  THE  MUTUAL  WAIVERS  ANDCERTIFICATIONS IN THIS PARAGRAPH.

[The remainder of this page is intentionally left blank.]

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IN  WITNESS  WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and dulyauthorized officers as of the day and year first above written.

BORROWERS:

UNITED NATURAL FOODS, INC., as a U.S. Borrower

By: /s/ Devon Hart Name: Devon Hart Title: Vice President and Treasurer

UNITED NATURAL FOODS WEST, INC., as a U.S.Borrower

By: /s/ Devon Hart Name: Devon Hart Title: Vice President and Treasurer

Third Amendment to Loan Agreement (ABL)

Advantage Logistics - Southeast, Inc.Albert’s Organics, Inc.Arden Hills 2003 LLCAssociated Grocers of Florida, Inc.Billings Distribution Company, LLCBismarck Distribution Company, LLCBlue Marble Brands, LLCCambridge 2006 L.L.C.Champaign Distribution Company, LLCChamplin 2005 L.L.C.Cub Stores, LLCFargo Distribution Company, LLCFF Acquisition, L.L.C.Foodarama LLCHazelwood Distribution Company, Inc.Hazelwood Distribution Holdings, Inc.Hopkins Distribution Company, LLCHornbacher’s, Inc.Inver Grove Heights 2001 L.L.C.Maplewood East 1996 L.L.C.Nor-Cal Produce, Inc.Oglesby Distribution Company, LLCShoppers Food Warehouse Corp.Stevens Point Distribution Company, LLCSuper Rite Foods, Inc.SUPERVALU Holdings, Inc.SUPERVALU Holdings - PA LLCSUPERVALU INC.SUPERVALU Pharmacies, Inc.SUPERVALU Transportation, Inc.SUPERVALU Penn, LLCTony’s Fine FoodsUnified Grocers, Inc.United Natural Trading, LLC, each as a U.S. Borrower

By: /s/ Devon Hart Name: Devon Hart Title: Vice President and Treasurer

Third Amendment to Loan Agreement (ABL)

UNFI CANADA, INC., as the Canadian Borrower

By: /s/ Devon Hart

Name: Devon HartTitle: Vice President and Treasurer

Third Amendment to Loan Agreement (ABL)

BANK OF AMERICA, N.A., as AdministrativeAgent, a Consenting Lender and an Issuing Bank

By: /s/ Edgar Ezerins

Name: Edgar EzerinsTitle: SVP

Third Amendment to Loan Agreement (ABL)

BANK OF AMERICA, N.A., acting throughits Canada Branch

as an Issuing Bank and a ConsentingLender By: /s/ Sylwia Durkiewicz

Name: Sylwia DurkiewiczTitle: Vice President

Third Amendment to Loan Agreement (ABL)

                

CONSENTING LENDERS

WELLS FARGO, NATIONAL ASSOCIATION, as aConsenting lender and an Issuing Bank

By: /s/ Peter SchueblerName: Peter SchueblerTitle: Vice President

                

WELLS FARGO CAPITAL FINANCE CORPORATIONCANADA, as a Consenting lender

By: /s/ David G. Phillips

Name: David G. PhillipsTitle: Senior Vice President

Third Amendment to Loan Agreement (ABL)

JPMorgan Chase Bank, N.A.,

as a Consenting Lender and an Issuing Bank

By: /s/ Kelly MiltonName: Kelly MiltonTitle: Executive Director

Third Amendment to Loan Agreement (ABL)

JPMORGAN CHASE BANK, N.A., TorontoBranch,

as a Consenting Lender

By: /s/ Jeffrey ColemanName: Jeffrey ColemanTitle: Executive Director

Third Amendment to Loan Agreement (ABL)

CONSENTING LENDERS

U.S. BANK NATIONAL ASSOCIATION, as anIssuing Bank and a Consenting Lender

By: /s/ Nicole C. ManiesName: Nicole C. ManiesTitle: Vice President

Third Amendment to Loan Agreement (ABL)

U.S. BANK NATIONAL ASSOCIATION, actingthrough its Canadian Branch

as a Consenting Lender and an Issuing Bank

By: /s/ John P. RehobName: John P. RehobTitle: Vice President & Principal Officer

Third Amendment to Loan Agreement (ABL)

GOLDMAN SACHS BANK USA,

as a Consenting Lender and an Issuing Bank

By: /s/ Jamie MinieriName: Jamie MinieriTitle: Authorized Signatory

Third Amendment to Loan Agreement (ABL)

CONSENTING LENDERS

TRUIST BANK (formerly known as BRANCHBANKING AND TRUST COMPANY)

each as a Consenting Lender

By: /s/ Courtney G. JespersenName: Courtney G. JespersenTitle: Director

Third Amendment to Loan Agreement (ABL)

BMO HARRIS FINANCING, INC.,

as a Consenting Lender

By: /s/ Jacquelinie M. LentzName: Jacqueline M. LentzTitle: Assistant Vice President

Third Amendment to Loan Agreement (ABL)

BANK OF MONTREAL,

as a Consenting Lender

By: /s/ Helen Alvarez-HernandezName: Helen Alvarez-HernandezTitle: Managing Director Canadian Commercial Banking BANK OF MONTREAL 100 King Street West, 18th Fl Toronto, Ontario M5X1A1 CANADA

Third Amendment to Loan Agreement (ABL)

CONSENTING LENDERS

CITIZEN BANK, N.A.Consenting LenderBy: /s/ Jessica Benevides Caron

Name: Jessica Benevides CaronTitle: SVP

Third Amendment to Loan Agreement (ABL)

TD Bank, N.A.

as a Consenting Lender and an Issuing Bank

By: /s/ Edmundo KahnName: Edmundo KahnTitle: Vice-President

Third Amendment to Loan Agreement (ABL)

TORONTO-DOMINION BANK

as a Consenting Lender and an Issuing Bank

By: /s/ Mark GrayName: Mark GrayTitle: Director, ABL

By: /s/ Chaz LouisyName: Chaz LouisyTitle: MCC - Asset Based Lending

Third Amendment to Loan Agreement (ABL)

CONSENTING LENDERS

ROYAL BANK OF CANADA

as a Consenting Lender

By: /s/ Michael PetersenName: Michael PetersenTitle: Attorney in Fact

Third Amendment to Loan Agreement (ABL)

CONSENTING LENDERS

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

each as a Consenting Lender

By: /s/ William O'DalyName: William O'DalyTitle: Authorized Signatory

By: /s/ D. Andrew MalettaName: D. Andrew MalettaTitle: Authorized Signatory

Third Amendment to Loan Agreement (ABL)

PNC BANK, NATIONAL ASSOCIATION,

as a Consenting Lender

By: /s/ Biana MusiyenkoName: Biana MusiyenkoTitle: Vice President

Address: 340 Madison Avenue, 11th Floor New York, NY 10173

Attn: Portfolio Manger - UNFI

PNC BANK CANADA BRANCH, as a Consenting Lender

By: /s/ David T. OlsonName: David T. OlsonTitle: Principal Officer and Regional President- CanadaAddress: 130 King Street West, Suite 2140

Toronto, ON, Canada M5X 1E4

Attn: Portfolio Manager - UNFI

CAPITAL ONE, NATIONAL ASSOCIATION as a Consenting Lender

By: /s/ Joe A. SacchettiName: Joe A. SacchettiTitle: Duly Authorized Signatory

CONSENTING LENDERS

FARM CREDIT EAST, ACA

each as a Consenting Lender

By: /s/ Justin A. Brown

Name: Justin A. BrownTitle: Vice President

Third Amendment to Loan Agreement (ABL)

COOPERATIEVE RABOBANK U.A., NEW YORKBRANCH

as a Consenting Lender

By: /s/ William BinderName: William BinderTitle: Executive Director

By: /s/ Timothy J. Devane

Name: Timothy J. DevaneTitle: Executive Director

Third Amendment to Loan Agreement (ABL)

CITY NATIONAL BANK, as a ConsentingLender

By: /s/ Christopher CleggName: Chistopher CleggTitle: Senior Vice President

[Signature Page to Amendment No. 3]

Exhibit I

[Amendments to Loan Agreement attached]

THIS  COMPOSITE  CONFORMED  COPY  HAS  BEEN  PREPARED  SOLELY  AS  A  CONVENIENCE  AND  IS  NOT  A  LEGAL  DOCUMENT.    THE  CREDITAGREEMENT, DATED AS OF AUGUST 30, 2018 (AS AMENDED), REMAINS THE OPERATIVE LEGAL DOCUMENT FOR ALL PURPOSES

Composite  copy  reflecting  amendments  made  pursuant  to  the  First  Amendment  to  Loan  Agreement  dated  as  of  October  19,  2018  and  the  SecondAmendment to the Loan Agreement dated as of January 24, 2019.

UNITED NATURAL FOODS, INC.,UNITED NATURAL FOODS WEST, INC.

and certain other Subsidiaries from time to time,as U.S. Borrowers

and

UNFI CANADA, INC.,as Canadian Borrower

______________________________________________________________________________

LOAN AGREEMENT

Dated as of August 30, 2018

U.S.$2,100,000,000.00______________________________________________________________________________

CERTAIN FINANCIAL INSTITUTIONS,as Lenders

and

BANK OF AMERICA, N.A., as Administrative Agent

BANK OF AMERICA, N.A. (acting through its Canada branch),as Canadian Agent

GOLDMAN SACHS BANK USA, WELLS FARGO BANK, NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A. and U.S. BANKNATIONAL ASSOCIATION,

as Co-Syndication Agentsand

BANK OF AMERICA, N.A.,

GOLDMAN SACHS BANK USA, WELLS FARGO BANK, NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A. and U.S.BANK NATIONAL ASSOCIATION,

as Joint Lead Arrangers and Joint Bookrunners

1 NTD: Conformed for the First Amendment to Loan Agreement dated as of 10/19/2018, the SecondAmendment to Loan Agreement dated as of 1/24/2019 and the Third Amendment to Loan Agreement dated as of8/14/2020.

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TABLE OF CONTENTS(continued)

       Page14.2. Indemnity 17114.3. Notices and Communications 17214.4. Performance of Borrowers' Obligations 17314.5. Credit Inquiries 17314.6. Severability 17314.7. Cumulative Effect; Conflict of Terms 17314.8. Counterparts; Execution 17414.9. Time is of the Essence 17414.10. Relationships with Lenders 17414.11. No Advisory or Fiduciary Responsibility 17414.12. Confidentiality 17414.13. Judgment Currency 17514.14. GOVERNING LAW 17614.15. Consent to Forum 17614.16. Waivers by Borrowers 17614.17. Patriot Act Notice 17714.18. Waiver of Sovereign Immunity 17714.19. Pari Passu Treatment 17714.20. Acknowledgement and Consent to Bail-in of EEAAffected Financial Institutions 17914.21. Intercreditor Agreement 17914.22. NO ORAL AGREEMENT 17914.23 Acknowledgement Regarding Any Supported QFCs 179

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LIST OF EXHIBITS AND SCHEDULES

Exhibit A U.S. Revolver Note Exhibit B Canadian Note Exhibit C Assignment and Acceptance Exhibit D Assignment Notice Exhibit E Intercreditor AgreementExhibit F Credit Card NotificationExhibit G Secured Bank Product Notification

Schedule 1.1(a) U.S. Revolver Commitments and Canadian Commitments of Lenders Schedule 1.1(b) Fiscal Periods; Fiscal QuartersSchedule 1.1(c) Letter of Credit Commitments Schedule 9.1.4 Names and Capital Structure Schedule 9.1.11 Patents, Trademarks, Copyrights and Licenses Schedule 9.1.14 Environmental Matters Schedule 9.1.16 Litigation Schedule 9.1.18 Pension Plans Schedule 9.1.20 Labor Contracts Schedule 10.1.11 Post-Closing DeliverablesSchedule 10.2.1 Existing Debt Schedule 10.2.2 Existing Liens Schedule 10.2.5 Existing Investments Schedule 10.2.17 Existing Affiliate Transactions

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the U.S. Credit Card Receivables Formula Amount, plus (C) the U.S. Inventory Formula Amount, plus (D) the U.S. Pharmacy Receivables Formula, plus (E)Pharmacy Scripts Availability, plus (F) the Canadian Accounts Formula Amount, plus (G) the Canadian Inventory Formula Amount, minus (H) the AvailabilityReserve exceeds (ii) the Aggregate Commitments; provided, that the amount in this clause (b) shall not exceed an amount equal to 2.50% of the AggregateCommitments as of the applicable date of determination.

Administrative Agent: as defined in the preamble to this Agreement.

Affected Financial Institution: (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affiliate: with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or isunder common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of themanagement or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” havecorrelative meanings.

Agent or Applicable Agent: the Administrative Agent or the Canadian Agent, as the context requires.

Agent Indemnitees: each Agent and its Affiliates and their respective officers, directors, employees, agents and attorneys.

Agent Professionals: attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaroundconsultants, and other professionals and experts retained by any Agent.

Aggregate Availability: on any date of determination, an amount equal to the sum of (a) U.S. Revolver Availability plus (b) Canadian Availability.

Aggregate Availability Certificate: a certificate, in form satisfactory to Administrative Agent, by which Borrowers certify as to the daily averageAggregate Availability, U.S. Revolver Availability and Canadian Availability (a) for purposes of determining the termination date of a Trigger Event, for thethirty (30) consecutive days prior to such termination date, and (b) for all other purposes herein, for the most recently ended Fiscal Quarter.

Aggregate Borrowing Base: on any date of determination, an amount equal to the sum of (a) the U.S. Revolver Borrowing Base plus (b) the CanadianBorrowing Base.

Aggregate Canadian Commitments: the aggregate amount of Canadian Commitments of all Canadian Lenders.

Aggregate Commitments: the Aggregate U.S. Revolver Commitments and the Aggregate Canadian Commitments.

Aggregate U.S. Revolver Commitments: the aggregate amount of U.S. Revolver Commitments of all U.S. Revolver Lenders.

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without duplication, and, without taking into account the proposed portion of the Available Equity Amount calculated above to be used at the applicableAvailable Equity Amount Reference Time, of:

(a) the aggregate amount of any Investments made by any Borrower or any Subsidiary using the Available Equity Amount after the ClosingDate and prior to the Available Equity Amount Reference Time;

(b) the aggregate amount of Distributions made by any Borrower or any Subsidiary using the Available Equity Amount pursuant toSection 10.2.4(h) after the Closing Date and prior to the Available Equity Amount Reference Time; and

(c) the aggregate amount expended on prepayments, repurchases, redemptions, defeasements and acquisitions, in each case of Junior Debt,made by any Borrower or any Subsidiary using the Available Equity Amount after the Closing Date and prior to the Available Equity AmountReference Time.

BA Equivalent Rate: for the applicable Interest Period of each BA Equivalent Rate Loan, the rate of interest per annum equal to the annual ratesapplicable to Canadian Dollar bankers’ acceptances having an identical or comparable term as the proposed BA Equivalent Rate Loan displayed and identifiedas such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately 10:00A.M. on such day (or, if such day is not a Business Day, as of 10:00 A.M. on the immediately preceding Business Day), provided, that if such rates do notappear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of1/100 of 1%) as of 10:00 A.M. on such day at which a Canadian chartered bank listed on Schedule 1 of the Bank Act (Canada) as selected by Bank of America-Canada Branch is then offering to purchase Canadian Dollar bankers’ acceptances accepted by it having such specified term (or a term as closely as possiblecomparable to such specified term); provided, that in no event shall the BA Equivalent Rate be less than zero.

BA Equivalent Rate Loan: any Loan in Canadian Dollars bearing interest at a rate determined by reference to the BA Equivalent Rate. All BAEquivalent Rate Loans shall be denominated in Canadian Dollars.

Bail-In Action: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of anEEAAffected Financial Institution.

Bail-In Legislation: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and ofthe Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is describedin the EU Bail-In Legislation Schedule. and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time totime) and any other law, regulation or rule applicable to the United Kingdom relating to the resolution of unsound or failing banks, investment firms or otherfinancial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

Bank of America: Bank of America, N.A., a national banking association, and its successors and assigns.

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Bank of America-Canada Branch: Bank of America, N.A. (acting through its Canada branch), and its successors and assigns.

Bank of America Indemnitees: Bank of America and its Affiliates and their respective officers, directors, employees, branches (including Bank ofAmerica-Canada Branch), agents, mandataries, and attorneys.

Bank Product: any of the following products, services or facilities extended to any Borrower or Subsidiary by a Lender or any of its Affiliates: (a) CashManagement Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; and (d) other banking products orservices as may be requested by any Borrower or Subsidiary, other than Letters of Credit.

Bankruptcy Code: Title 11 of the United States Code.

Base Rate: for any day, a per annum rate equal to the highest of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%;and (c) LIBOR for a one-month interest period as determined on such day, plus 1.0%.

Base Rate Loan: any Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in U.S. Dollars.

Beneficial Ownership Certification: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation: 31 C.F.R. § 1010.230.

Benefits Plan: (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 ofthe Code) the assets of any such “employee benefit plan” or “plan”.

BHC Act Affiliate: of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

Board of Governors: the Board of Governors of the Federal Reserve System.

Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Obligor,(ii) is evidenced by notes, drafts, bonds, debentures, credit agreements or similar instruments, (iii) accrues interest in the absence of default or is a type uponwhich interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or (iv) was issued or assumed as full or partialpayment for Property (excluding trade payables owing in the Ordinary Course of Business); (b) Capital Leases; (c) reimbursement obligations with respect tostandby letters of credit; and (d) guaranties of any Debt of the foregoing types owing by another Person.

Borrower Agent: as defined in Section 4.4.

Borrower Materials: U.S. Revolver Borrowing Base information, Canadian Borrowing Base information, Compliance Certificates, AggregateAvailability Certificates, reports, financial statements

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Canadian Debtor Relief Laws: the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up Act(Canada) and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency,reorganization, dissolution or similar provincial, territorial, federal or other applicable jurisdictional debtor relief laws of Canada.

Canadian Deed of Hypothec: any deed of hypothec creating a hypothec in favor of the Canadian Agent, as hypothecary representative for the benefit ofthe Secured Parties, pursuant to the laws of the Province of Quebec on the assets of any Obligor existing under the laws of the Province of Quebec, having itsdomicile (within the meaning of the Civil Code of Quebec) in the Province of Quebec or having a place of business or tangible property situated in the Provinceof Quebec.

Canadian Dollar Equivalent: of any amount means, at the time of determination thereof, (a) if such amount is expressed in Canadian Dollars, suchamount and (b) if such amount is denominated in any other currency, the equivalent of such amount in Canadian Dollars as determined by the Canadian Agentusing the Spot Rate.

Canadian Dollars or CD$: the lawful currency of Canada.

Canadian Guarantor: any Guarantor that is a Canadian Subsidiary.

Canadian Intellectual Property Security Agreements: any agreement executed on or after the Closing Date confirming or effecting the grant of any Lienon Intellectual Property owned by the Canadian Borrower to the Canadian Agent, for the benefit of the Secured Parties, in accordance with this Agreement andthe Canadian Security Agreement.

Canadian Inventory Formula Amount: 90% of the NOLV Percentage of the U.S. Dollar Equivalent of the Value of Eligible Inventory of the CanadianBorrower.

Canadian LC Conditions: the following conditions are necessary for issuance of a Letter of Credit for the account or benefit of the Canadian Borroweror any of its Subsidiaries: (a) each of the conditions set forth in Section 6 shall have been satisfied (or, solely with respect to any such Letter of Credit issued onthe Closing Date, the conditions set forth in Section 6.2 only); (b) after giving effect to such issuance, the U.S. Dollar Equivalent of Canadian LC Obligationsdoes not exceed U.S.$5,000,00025,000,000, Total LC Obligations do not exceed U.S.$125,000,000300,000,000, no Overadvance exists, no CanadianOveradvance exists, Total Canadian Outstandings do not exceed the Canadian Borrowing Base, and Total Outstandings do not exceed the Aggregate BorrowingBase; (c) the expiration date of such Letter of Credit is (i) no more than one year from issuance (or such longer period of time as may be agreed by theapplicable Issuing Bank in its discretion) in the case of standby Letters of Credit, and (ii) no more than 120 days from issuance (or such longer period of time asmay be agreed by the applicable Issuing Bank in its discretion) in the case of commercial Letters of Credit, (d) the Letter of Credit and payments thereunder aredenominated in Canadian Dollars or U.S. Dollars, (e) the form of the proposed Letter of Credit is reasonably satisfactory to the Canadian Agent and theapplicable Issuing Bank and (f) the Total LC Obligations with respect to Letters of Credit issued by the applicable Issuing Bank would not exceed such IssuingBank’s LC Commitment with respect to the issuance of Letters of Credit for the account or benefit of the Canadian Borrower or any of its Subsidiaries.

Canadian LC Obligations: the sum (without duplication) of (a) all amounts owing by the Canadian Borrower for any drawings under Letters of Creditissued for the account or on behalf of the Canadian Borrower or any of its Subsidiaries; and (b) the amount available to be drawn under

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(a) any net gain (or loss) from disposed, abandoned or discontinued operations and(other than any net gain (or loss) attributable to the businessassociated with the Shoppers banner and Cub Foods banner) on disposal of disposed, discontinued or abandoned operations;

(b) any net gain (or loss) realized upon the sale or other disposition of any asset or disposed operations of any Borrower or any Subsidiary(including pursuant to any sale/leaseback transaction) which is not sold or otherwise disposed of in the ordinary course of business (as determined ingood faith by a Senior Officer or the board of directors of the Borrower Agent), including the gain on the sale of routes to independent operators;

(c) any extraordinary expenses, exceptional, unusual or nonrecurring gain, loss, charge or expense, or any charges, expenses or reserves(including relating to the Transaction Expenses) in respect of any restructuring, relocation, redundancy or severance expense, new product introductionsor one-time compensation charges;

(d) the cumulative effect of a change in accounting principles;

(e) any (i) non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards (includingany long-term management equity incentive plans) and any non-cash deemed finance charges in respect of any pension liabilities or other provisions and(ii) income (loss) attributable to deferred compensation plans or trusts;

(f) all deferred financing costs written off and premiums paid or other expenses incurred directly in connection with any early extinguishmentof Debt and any net gain (loss) from any write-off or forgiveness of Debt;

(g) any unrealized gains or losses in respect of any obligations under any Hedging Agreement or any ineffectiveness recognized in earningsrelated to hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in eachcase, in respect of any obligations under any Hedging Agreement;

(h) any unrealized foreign currency translation gains or losses in respect of Debt of any Person denominated in a currency other than thefunctional currency of such Person and any unrealized foreign exchange gains or losses relating to translation of assets and liabilities denominated inforeign currencies;

(i) any unrealized foreign currency translation or transaction gains or losses in respect of Debt or other obligations of any Borrower or anySubsidiary owing to any Borrower or any Subsidiary;

(j) any purchase accounting effects including, but not limited to, adjustments to inventory, property and equipment, software and otherintangible assets and deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including theeffects of such adjustments pushed down to the Borrowers and the Subsidiaries), as a result of any consummated acquisition (including the SupervaluAcquisition), or the amortization or write-off of any amounts thereof (including any write-off of in process research and development);

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consisting of Debt for borrowed money (including obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments),Capital Lease obligations, Purchase Money Debt and letters of credit (but only to the extent any letter of credit has been drawn but not reimbursed) minus (b)the aggregate amount of unrestricted cash and Cash Equivalents (in each case, free and clear of all Liens other than any nonconsensual Lien that is permittedunder the Loan Documents, Liens of the Administrative Agent, Liens in favor of the Term Loan Facility Agent under the Term Loan Facility Documents andany Liens securing other Debt permitted hereunder to be secured by a Lien on the Collateral along with the Obligations), which aggregate amount of cash andCash Equivalents shall be determined without giving pro forma effect to the proceeds of Debt incurred on such date; provided that Consolidated Total Debt shallnot include obligations under Hedging Agreements entered into in the ordinary course of business and not for speculative purposes.

Consolidated Total Net Leverage Ratio: with respect to any most recently ended period of four consecutive Fiscal Quarters calculated on a pro formabasis, the ratio of (a) Consolidated Total Debt as of the last day of such any most recently ended period of four consecutive Fiscal Quarters calculated on a proforma basis to (b) Consolidated EBITDA of the Borrowers and the Subsidiaries for such most recently ended period of four consecutive Fiscal Quarterscalculated on a pro forma basis.

Contingent Obligation: any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt ordividend (“primary obligations”) of another obligor (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Personunder any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similarpayments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii)to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of theprimary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v)otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall bedeemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under theinstrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.

Contribution Debt: unsecured Debt of any Borrower or any Subsidiary in an amount equal to the aggregate amount of cash contributions made after theClosing Date to any Borrower in exchange for Qualified Equity Interests of any Borrower, except to the extent utilized in connection with any other transactionpermitted by Section 10.2.8 and Section 10.2.9 and except to the extent such amount increases the Available Equity Amount.

Converted Restricted Subsidiary: as defined in the definition of “Consolidated EBITDA”.

Converted Unrestricted Subsidiary: as defined in the definition of “Consolidated EBITDA”.

Covered Entity: any of the following: (a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a“covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or a “covered FSI” as that term is defined in, and interpretedin accordance with, 12 C.F.R. § 382.2(b).

Covered Party: as defined in Section 14.23.

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shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Debt and (ii) the fair market value of the property encumbered thereby asdetermined by such Person in good faith.

Debt Fund Affiliate: an Affiliate of a Company Competitor that is a bona fide debt fund or an investment vehicle that is primarily engaged in making,purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its business and with respect towhich neither such Company Competitor nor any other Affiliate of such Company Competitor (other than other Debt Fund Affiliates) makes investmentdecisions or has the power, directly or indirectly, to direct or cause the direction of such Debt Fund Affiliate’s investment decisions.

Default: an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.

Default Rate: for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicablethereto.

Default Right: has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

Defaulting Lender: any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two BusinessDays; (b) has notified Administrative Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or has made apublic statement to that effect; (c) has failed, within three Business Days following request by an Agent or any Borrower, to confirm in a manner satisfactory tosuch Agent and Borrowers that such Lender will comply with its funding obligations hereunder; (d) has, or has a direct or indirect parent company that has,become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, interim receiver, receiver manager,custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or (e) become the subject of a Bail-inAction; provided, however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest insuch Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or fromenforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject suchLender’s agreements.

Deposit Account Control Agreements: the deposit account control agreements to be executed by each institution maintaining a Deposit Account for anObligor, in favor of the Applicable Agent, for the benefit of the applicable Secured Parties, as security for the Obligations or the Canadian Obligations, as thecase may be.

Designated Jurisdiction: any country or territory that is the subject of any comprehensive Sanctions.

Designated Non-Cash Consideration: means the fair market value of non-cash consideration received by any Borrower or any Subsidiary in connectionwith an Asset Disposition pursuant to Section 10.2.6(m) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Senior Officer ofthe Borrower Agent setting forth the basis of such valuation.

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(p) which is subject to any factoring arrangement.

Eligible Inventory: Inventory owned by a Borrowing Base Obligor that Administrative Agent, in its Permitted Discretion, deems to be EligibleInventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it:

(a) is finished goods or raw materials, and not work-in-process, packaging or shipping materials, labels, samples, display items, bags,replacement parts or manufacturing supplies;

(b) is not held on consignment unless by an Obligor, nor subject to any deposit or down payment;

(c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unmerchantable for sale;

(d) is not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed goods;

(e) other than in the case of any Inventory attributable to the Supervalu Group, is not perishable (with perishable Inventory includingperishable agricultural or farming products such as fruits, vegetables or meat); provided that any Inventory attributable to the Supervalu Group that isperishable (including perishable agricultural or farming products such as fruits, vegetables or meat) shall notmay constitute Eligible Inventory to theextent that the Value thereof exceedsdoes not exceed twenty-five percent (25%) of the U.S. Revolver Borrowing Base (determined without regard to thelimitation in this proviso);

(f) meets all applicable standards imposed by any Governmental Authority having regulatory authority over such Inventory, and does notconstitute Hazardous Materials;

(g) conforms with the covenants and representations herein;

(h) is subject to the Applicable Agent’s duly perfected, first priority Lien, and no other Lien (other than a Permitted Lien in favor of the TermLoan Facility Agent that is subject to the Intercreditor Agreement);

(i) is within the continental United States or Canada, is not in transit except between locations of Borrowing Base Obligors and is notconsigned to any Person;

(j) is not subject to any warehouse receipt or negotiable document;

(k) is not subject to any License or other arrangement that restricts such Borrowing Base Obligor’s or such Agent’s right to dispose of suchInventory, unless the Applicable Agent has received an appropriate Lien Waiver;

(l) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder orother Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established;

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Federal Funds Rate: (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System, as publishedby the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up,if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Administrative Agent;provided, that in no event shall such rate be less than zero.

Fee Letter: the second amended and restated fee letter dated August 8, 2018 by and among the Lead Arrangers and the Borrower Agent.

Fiscal Intermediary: any qualified insurance company or other Person that has entered into an ongoing relationship with any Governmental Authority tomake payments to payees under Medicare, Medicaid or any other federal, state or local public health care or medical assistance program pursuant to any of theHealth Care Laws.

Fiscal Period: each of the twelve (12) periods of either four weeks or five weeks (as applicable) in each Fiscal Year, as further described on Schedule1.1(b) attached hereto.

Fiscal Quarter: any fiscal quarter described on Schedule 1.1(b) attached hereto.

Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on the Saturday closest to July 31 of each year.

Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for Borrowers and Subsidiaries as of any date of determination for the fourFiscal Quarters then most recently ended, of (a) Consolidated EBITDA minus Capital Expenditures (except those financed with Borrowed Money other thanLoans) and cash taxes paid (net of cash tax refunds received), to (b) Fixed Charges.

Fixed Charges: the sum of the following, to the extent paid or required to be paid in cash: Consolidated Cash Interest Charges, scheduled principalpayments made on Borrowed Money and Distributions made.

FLSA: the Fair Labor Standards Act of 1938.

Foreign Lender: any U.S. Revolver Lender that is not a U.S. Person.

Foreign Plan: any employee benefit plan or arrangement (a) maintained or contributed to by any Obligor or Subsidiary that is not subject to the laws ofthe United States or any jurisdiction in Canada; or (b) mandated by a government other than the United States (including any local or state government) orCanada (or any Canadian provincial or territorial government) for employees of any Obligor or Subsidiary.

Foreign Subsidiary: any Subsidiary that is organized under the laws of any political subdivision of any jurisdiction other than the United States.

Fronting Exposure: a Defaulting Lender’s interest in LC Obligations, Swingline Loans and Protective Advances, except to the extent CashCollateralized by the Defaulting Lender or allocated to other Lenders hereunder.

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writing to the Administrative Agent objecting to such Intercreditor Agreement within five Business Days of the posting thereof.

Interest Period: as defined in Section 3.1.3.

Inventory: as defined in the UCC or PPSA, as applicable, including all goods intended for sale, lease, display or demonstration; all work in process; andall raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping,advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).

Inventory Reserve: reserves established by Administrative Agent in its Permitted Discretion to reflect factors that may negatively impact the Value ofInventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendorchargebacks.

Investment: any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Equity Interests of aPerson; or any advance or capital contribution to or other investment in a Person.

IRS: the United States Internal Revenue Service.

Issuing Bank: each of (i) Bank of America, Bank of America-Canada Branch and any Affiliate of Bank of America, (ii) each other Lender listed onSchedule 1.1(ac) (and, in each case, any Affiliate of any such Lender selected by such Lender to issue Letters of Credit on its behalf) and (iii) any replacementLetter of Credit issuer appointed pursuant to Section 2.3.4 and any other Lender designated as an Issuing Bank by the Borrower Agent.

Issuing Bank Indemnitees: each Issuing Bank and its Affiliates and their respective officers, directors, employees, agents and attorneys.

ITA: the Income Tax Act (Canada).

Junior Debt: Debt incurred by an Obligor that is (w) in excess of the Threshold Amount and subordinated in right of payment to the prior payment of allObligations of such Obligor under the Loan Documents, (x) in excess of the Threshold Amount and junior in priority to the Liens securing the Obligations or (z)in excess of the Threshold Amount and is unsecured, to the extent, in the case of this clause (z), any prepayment, redemption, purchase, defeasance or othersatisfaction prior to the scheduled maturity thereof is funded by a Borrowing.

LC Application: an application by Borrower Agent or the Canadian Borrower, as the case may be, to the applicable Issuing Bank for issuance of a Letterof Credit, in form satisfactory to such Issuing Bank and Agent.

LC Commitment: as to any Issuing Bank, its commitment to issue Letters of Credit, and to amend, increase or extend Letters of Credit previously issuedby it, pursuant to Section 2.3, in an aggregate face amount at any time outstanding not to exceed (a) in the case of any Issuing Bank party hereto as of theSigningThird Amendment Effective Date, the amount set forth opposite such Issuing Bank’s name on Schedule 1.1(ac) under the heading “LC Commitments”and (b) in the case of any Lender that becomes an Issuing Bank hereunder thereafter, the amount which shall be set forth in the

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written agreement by which such Lender shall become an Issuing Bank hereunder, in each case as such commitment may be changed from time to time pursuantto the terms hereof or with the agreement in writing of such Issuing Bank, the Borrower Agent and the Administrative Agent. The aggregate LC Commitmentsof all the Issuing Banks shall be less than or equal to the LC Sublimit at all times.

LC Documents: all documents, instruments and agreements (including LC Requests and LC Applications) delivered by the applicable Borrowers or anyother Person to the applicable Issuing Bank or the Applicable Agent in connection with any Letter of Credit.

LC Obligations: U.S. LC Obligations and/or Canadian LC Obligations, as the context requires.

LC Request: a request for issuance of a Letter of Credit, to be provided by Borrower Agent or the Canadian Borrower, as the case may be, to theapplicable Issuing Bank, in form satisfactory to the Applicable Agent, as the case may be, and the applicable Issuing Bank.

LC Sublimit: an amount equal to $125,000,000300,000,000; provided, that only up to $5,000,00025,000,000 of such amount shall be available for theissuance of Letters of Credit for the account or benefit of the Canadian Borrower or any of its Subsidiaries.

Lead Arrangers: collectively, Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank ofAmerica Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lendingservices or related businesses may be transferred following the Signing Date), Goldman Sachs Bank USA, Wells Fargo Bank, National Association, JPMorganChase Bank, N.A and U.S. Bank National Association in their capacities as lead arrangers and bookrunners with respect to this Agreement.

Lender Indemnitees: Lenders and Secured Bank Product Providers, and their Affiliates and their respective officers, directors, employees, agents andattorneys.

Lenders: as defined in the preamble to this Agreement, including the U.S. Revolver Lenders, the Canadian Lenders, each Swingline Lender and anyother Person who hereafter becomes a “U.S. Revolver Lender” and/or a “Canadian Lender” pursuant to an Assignment and Acceptance.

Lending Office: the office designated as such by the applicable Lender at the time it becomes party to this Agreement or thereafter by notice to (a) withrespect to a U.S. Revolver Lender, Administrative Agent and Borrower Agent and (b) with respect to a Canadian Lender, each Agent and the Borrower Agent.

Letter of Credit: any standby or commercial letter of credit (including the Existing UNFI Letters of Credit and, solely to the extent agreed by theAdministrative Agent in its reasonable discretion, the Existing Supervalu Letters of Credit) issued by the applicable Issuing Bank for the account of a Borroweror a Subsidiary, or any indemnity, guarantee, exposure transmittal memorandum or similar form of credit support issued by Administrative Agent, the CanadianAgent or the applicable Issuing Bank for the benefit of a Borrower or a Subsidiary. Letters of Credit issued for the account or benefit of a U.S. Borrower or aSubsidiary shall be issued in U.S. Dollars. Letters of Credit issued for the account or benefit of the Canadian Borrower or a Subsidiary thereof shall be issued inCanadian Dollars or U.S. Dollars.

LIBOR: for any Interest Period with respect to a LIBOR Loan, the per annum rate of interest determined by Administrative Agent at or about 11:00 a.m.(London time) two Business Days prior to

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amount of such U.S. Revolver Lender’s U.S. Revolver Commitment by the Aggregate U.S. Revolver Commitments; and (ii) at any other time, by dividing theamount of such U.S. Revolver Lender’s U.S. Revolver Loans and U.S. LC Obligations by the aggregate amount of Total U.S. Revolver Outstandings, and (b)with respect to any Canadian Lender, a percentage (rounded to the ninth decimal place) determined (i) while the Canadian Commitments are outstanding, bydividing the amount of such Canadian Lender’s Canadian Commitment by the Aggregate Canadian Commitments; and (ii) at any other time, by dividing theamount of such Canadian Lender’s Canadian Loans and Canadian LC Obligations by the aggregate amount of Total Canadian Outstandings.

Properly Contested: with respect to any obligation of an Obligor, (a) the obligation is being properly contested in good faith by appropriate proceedingspromptly instituted and diligently pursued and (b) appropriate reserves have been established in accordance with GAAP.

Property: any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

Protective Advances: a U.S. Revolver Protective Advance and/or a Canadian Protective Advance, as the context requires.

PSA: the Packers and Stockyards Act (7 USC § 196 et seq.).

PSA Claim: with respect to any Person, any right or claim of or for the benefit of such Person under PSA or any similar law enacted by any other stateor jurisdiction including any right, title or interest in or to any claims, remedies or trust assets or other benefits or any proceeds thereof.

PTE: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed or capital assets; (b) Debt (other than theObligations) incurred at the time of or within 270 days after acquisition, construction, repair, replacement or improvement of any fixed or capital assets, for thepurpose of financing any of the price thereof; (c) Debt (other than the Obligations) incurred for the construction or acquisition or improvement of, or to financeor to refinance the construction, acquisition or improvement of, any Real Estate owned by any Obligor (excluding any Debt incurred in connection with SaleLeaseback transaction permitted hereunder); and (d) any renewals, extensions or refinancings (but not increases) thereof.

Purchase Money Lien: a Lien that secures (a) Capital Leases or any Refinancing Debt with respect thereto or (b) Purchase Money Debt or anyRefinancing Debt with respect thereto, in each case, encumbering only the fixed or capital assets acquired with such Debt (and additions and accessions to suchassets and the proceeds and the products thereof and customary security deposits) and constituting a purchase money security interest under the UCC, in the caseof clause (b), the PPSA or other Applicable Law.

QFC: has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

QFC Credit Support: as defined in Section 14.23.

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refinanced; (e) no additional Lien is granted to secure it; and (f) no additional Person is obligated on such Debt that is not an Obligor.

Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of Permitted Purchase Money Debt or Debt otherwisepermitted under Section 10.2.1.

Reimbursement Date: as defined in Section 2.3.2.

Relevant Governmental Body: the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed orconvened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

Rent and Charges Reserve: the aggregate of (a) all past due rent and other amounts owing by an Obligor to any landlord, warehouseman, processor,repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any ABL Priority Collateral or could assert a Lien on any ABL PriorityCollateral; and (b) a reserve at least equal to three months’ rent and other charges that could be payable to any such Person, unless it has executed a LienWaiver.

Report: as defined in Section 12.2.3.

Reportable Event: with respect to any Pension Plan, any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 daynotice period has been waived.

Required Lenders: as of any date of determination, Lenders having more than 50.0% of the sum of the (a) Total Outstandings (with the aggregateoutstanding amount of each Lender’s risk participation and funded participation in LC Obligations and Swingline Loans being deemed “held” by such Lenderfor purposes of this definition) and (b) aggregate unused U.S. Revolver Commitments and Canadian Commitments; provided that the unused U.S. RevolverCommitments and Canadian Commitments of, and the portion of the Total Outstandings held or deemed held by any Defaulting Lender shall be excluded forpurposes of making a determination of Required Lenders.

Resolution Authority: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Restricted Investment: any Investment by a Borrower or Subsidiary other than a Permitted Investment; provided that any contribution, sale, assignment,transfer or other disposition or investment of any Intellectual Property to or in any Unrestricted Subsidiary shall constitute a Restricted Investment,notwithstanding any basket or other exception in the definition of “Permitted Investment” that would otherwise permit any such contribution, sale, assignment,transfer, disposition or investment, except for any contribution, sale, assignment, transfer, disposal or investment of any Intellectual Property to or in anyUnrestricted Subsidiary that is otherwise permitted under the definition of “Permitted Investment” and in the reasonable business judgment of the BorrowerAgent is immaterial to, or no longer used in or necessary for, the conduct of the business of the Borrower Agent or any Restricted Subsidiary.

Restricted Subsidiary: any Subsidiary of the Borrower Agent (other than a Borrower) other than an Unrestricted Subsidiary.

Restrictive Agreement: an agreement (other than a Loan Document) that conditions or restricts the right of (i) any Borrower, Subsidiary or other Obligorto grant Liens on any assets for the benefit of

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Subsidiary: any entity at least 50% of whose voting securities or Equity Interests is owned by a Borrower or any combination of Borrowers (includingindirect ownership by a Borrower through other entities in which such Borrower directly or indirectly owns 50% of the voting securities or Equity Interests).Notwithstanding the foregoing (and except for purposes of Sections,  9.1.13,  9.1.14,  9.1.18,  9.1.28,  9.1.29,  9.1.31,  9.2,  10.1.5,  10.1.6  and  10.1.12 and thedefinition of Unrestricted Subsidiary contained herein or as otherwise specified herein or in any other Loan Document), an Unrestricted Subsidiary shall bedeemed not to be a Subsidiary of the Borrower or any of its Subsidiaries for purposes of this Agreement.

Supermajority Lenders: as of any date of determination, Lenders having more than 66.7% of the sum of the (a) Total Outstandings (with the aggregateoutstanding amount of each Lender’s risk participation and funded participation in LC Obligations and Swingline Loans being deemed “held” by such Lenderfor purposes of this definition) and (b) aggregate unused U.S. Revolver Commitments and Canadian Commitments; provided that the unused U.S. RevolverCommitments and Canadian Commitments of, and the portion of the Total Outstandings held or deemed held by any Defaulting Lender shall be excluded forpurposes of making a determination of Required Lenders.

Supervalu Acquisition: as defined in the recitals to this Agreement.

Supervalu Acquisition Agreement: as defined in the recitals to this Agreement.

Supervalu Borrowers: members of the Supervalu Group identified in writing to the Administrative Agent after the Signing Date (i) that become U.S.Borrowers hereunder pursuant to Section 10.1.9 after the Closing Date (or on the Closing Date at the discretion of the Administrative Agent) and (ii) thatbecome U.S. Borrowing Base Obligors in accordance with the definition thereof.

Supervalu Group: the business of Supervalu Inc. and its Subsidiaries as conducted on the Signing Date, including the business activities, business lines,operations and contractual arrangements related thereto.

Supervalu Group Discontinued Operations: any business activity, business line or operations (whether pursuant to contractual arrangements orotherwise) of the Supervalu Group that, in each case, has actually been discontinued.

Supervalu Investment Grade Account Debtor: an Account Debtor that, at the time of determination, has a corporate credit rating and/or family rating, asapplicable, of BBB-or higher by S&P or Baa3 or higher by Moody’s.

Supported QFC: as defined in Section 14.23.

Swap Obligations: with respect to an Obligor, its obligations under a Hedging Agreement that constitutes a “swap” within the meaning of Section 1a(47)of the Commodity Exchange Act.

Swap Termination Value: in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreementrelating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determinedin accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark tomarket value(s) for such Hedging Agreements, as determined by the Secured Bank Product Provider (or the Borrower Agent, if no Secured Bank ProductProvider is party to such Hedging Agreement) in accordance with the terms thereof and in

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accordance with customary methods for calculating mark-to-market values under similar arrangements by the Secured Bank Product Provider (or the BorrowerAgent, if no Secured Bank Product Provider is party to such Hedging Agreement).

Swingline Lender: means any Canadian Swingline Lender and/or U.S. Swingline Lender, as the context requires.

Swingline Loan: any Borrowing of Applicable Floating Rate Loans funded with the Applicable Agent’s funds, until such Borrowing is settled amongthe Applicable Lenders or repaid by the U.S. Borrowers or the Canadian Borrower, as the case may be.

Taxes: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other chargesimposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto. For the avoidance of doubt, Taxes shall includeall Taxes imposed pursuant to Part XIII of the ITA or any successor provisions thereto.

Term Loan Agreement: the Term Loan Agreement dated as of the Closing Date, by and among, inter alios, UNFI, the lenders party thereto from time totime and the Term Loan Facility Agent, as such agreement may be amended, supplemented, modified, restated, renewed or replaced (whether upon or aftertermination or otherwise) in whole or in part from time to time.

Term Loan Facility: a senior secured term loan facility made available to UNFI under the Term Loan Agreement.

Term Loan Facility Agent: Goldman Sachs Bank USA, in its capacity as administrative agent, its successors and assigns in such capacity or any othercollateral agent or similar representative of the secured parties under the Term Loan Agreement.

Term Loan Facility Documents: the Term Loan Agreement and all other “Loan Documents” (or analogous term) as defined in the Term LoanAgreement.

Term Priority Collateral: as defined in the Intercreditor Agreement.

Third Amendment Effective Date: August 14, 2020.

Third Party Payor: any Person, such as a Fiscal Intermediary, Blue Cross/Blue Shield, or private health insurance company, which is obligated toreimburse or otherwise make payments to health care providers who provide medical care or medical assistance or other goods or services for eligible patientsunder any private insurance contract.

Threshold Amount: U.S. $75,000,000.

Total Canadian Outstandings: an amount equal to the sum of (a) the principal balance of all Canadian Loans plus (b) the U.S. Dollar Equivalent of theCanadian LC Obligations.

Total LC Obligations: the sum of (a) U.S. LC Obligations and (b) the U.S. Dollar Equivalent of the Canadian LC Obligations.

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UCC: the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection orenforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

UK Financial Institution: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by theUnited Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgatedby the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such creditinstitutions or investment firms.

UK Resolution Authority: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK FinancialInstitution.

Unfunded Pension Liability: (a) with respect to a Pension Plan, the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA,over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to the Code,ERISA or the Pension Protection Act of 2006 for the applicable plan year and (b) with respect to a Canadian Plan that is a registered pension plan, the amount(if any) by which the present value of all vested and unvested accrued benefits under such a plan exceeds the fair market value of assets allocable to suchbenefits, all determined as of the then most recent valuation date for such plan using customary actuarial assumptions for such a plan.

Unintentional Overadvance: as defined in Section 2.1.5.

Unrestricted Subsidiary: (i) any Subsidiary of UNFI designated by the Borrower Agent as an Unrestricted Subsidiary pursuant to Section  10.1.12;provided that no Borrower may be designated as an Unrestricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary.

Unused Line Fee Rate: a per annum rate equal to (i) from and after the Closing Date through and including the day that is three months after the ClosingDate, 0.375% and (ii) thereafter (a) 0.375%, if the average daily Total Outstandings were less than 25% of the Aggregate Commitments during the precedingFiscal Quarter or (b) 0.25%, if such average daily Total Outstandings were 25% or more of the Aggregate Commitments during the preceding Fiscal Quarter.

Upstream Payment: a Distribution by a Subsidiary to an Obligor or a wholly-owned Subsidiary of an Obligor or, in the case of a Distribution by a non-wholly-owned Subsidiary, to each owner of Equity Interests of such Subsidiary based on their relative ownership interests of the relevant class of EquityInterests).

U.S. ABL Priority Collateral: all ABL Priority Collateral of the U.S. Loan Parties.

U.S. Accounts Formula Amount: 90% of the Value of Eligible Accounts of each U.S. Borrowing Base Obligor; provided, however, that such percentageshall be reduced by 1.0% for each percentage point of Dilution.

U.S. Borrowers: as defined in the preamble to this Agreement.

U.S. Borrowing Base Obligor: (a) UNFI, (b) UNFW and (c) each other U.S. Borrower designated by the Borrower Agent as a U.S. Borrowing BaseObligor and, subject to Section 10.1.1, the Accounts and Inventory (and, where applicable, Credit Card Receivables, Pharmacy Receivables and/or

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Prescription Files) of which have been subject to a field examination and appraisal with results satisfactory to the Administrative Agent.

U.S. Collateral: all Collateral of the U.S. Loan Parties.

U.S. Credit Card Receivables Formula Amount: 90% of the Value of Eligible Credit Card Receivables of each U.S. Borrowing Base Obligor; provided,however, that such percentage shall be reduced by 1.0% for each percentage point of Credit Card Receivables Dilution.

U.S. Dollar Equivalent: of any amount means, at the time of determination thereof, (a) if such amount is expressed in U.S. Dollars, such amount and (b)if such amount is denominated in any other currency, the equivalent of such amount in U.S. Dollars as determined by the Administrative Agent using the SpotRate.

U.S. Dollars or U.S.$: lawful money of the United States.

U.S. Intellectual Property Security Agreements: any agreement executed on or after the Closing Date confirming or effecting the grant of any Lien onIntellectual Property owned by any U.S. Loan Party to the Administrative Agent, for the benefit of the Secured Parties, in accordance with this Agreement andthe Closing Date U.S. Security Agreement.

U.S. Inventory Formula Amount: 90% of the NOLV Percentage of the Value of Eligible Inventory of each U.S. Borrowing Base Obligor.

U.S. LC Conditions: the following conditions are necessary for issuance of a Letter of Credit for the account or benefit of a U.S. Borrower or any of itsSubsidiaries: (a) each of the conditions set forth in Section 6 shall have been satisfied (or, solely with respect to any such Letter of Credit issued on the ClosingDate, the conditions set forth in Sections 6.2 only); (b) after giving effect to such issuance, Total LC Obligations do not exceed U.S.$125,000,000300,000,000,no Overadvance exists, no U.S. Revolver Overadvance exists, Total U.S. Revolver Outstandings do not exceed the U.S. Revolver Borrowing Base, and TotalOutstandings do not exceed the Aggregate Borrowing Base; (c) the expiration date of such Letter of Credit is (i) no more than one year from issuance (or suchlonger period of time as may be agreed to by the applicable Issuing Bank) in the case of standby Letters of Credit, and (ii) no more than 120 days from issuance(or such longer period of time as may be agreed to by the applicable Issuing Bank) in the case of commercial Letters of Credit, (d) the Letter of Credit andpayments thereunder are denominated in U.S. Dollars, (e) the form of the proposed Letter of Credit is reasonably satisfactory to the Administrative Agent andthe applicable Issuing Bank in their reasonable discretion and (f) the Total LC Obligations with respect to Letters of Credit issued by the applicable IssuingBank would not exceed such Issuing Bank’s LC Commitment.

U.S. LC Obligations: the sum (without duplication) of (a) all amounts owing by U.S. Borrowers for any drawings under Letters of Credit issued for theaccount or on behalf of any U.S. Borrower or any of its Subsidiaries; and (b) the amount available to be drawn under outstanding Letters of Credit issued for theaccount or on behalf of any U.S. Borrower or any of its Subsidiaries, except to the extent Cash Collateralized.

U.S. Loan Parties: all Obligors other than (i) the Canadian Borrower and (ii) any other Obligor that is not organized under the laws of the United States,any state thereof or the District of Columbia.

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Borrower deemed by the Administrative Agent to be a U.S. Revolver Loan and (d) any U.S. Revolver Protective Advance.

U.S. Revolver Note: a promissory note executed by the U.S. Borrowers in favor of a U.S. Revolver Lender in the form of Exhibit A, in the amount ofsuch Lender’s U.S. Revolver Commitment.

U.S. Revolver Overadvance: as defined in Section 2.1.5.

U.S. Revolver Protective Advance: as defined in Section 2.1.6(a).

U.S. Revolver Termination Date: the date that is five years after the Closing Date.

U.S. Special Resolution Regimes: as defined in Section 14.23.

U.S. Swingline Lender: Bank of America, N.A. in its capacity as provider of Swingline Loans, or any successor swing line lender hereunder thatbecomes a party hereto pursuant to documentation reasonably agreed between such U.S. Swingline Lender, the Administrative Agent and the Borrower Agent.

U.S. Tax Compliance Certificate: as defined in Section 5.10.2(b)(iii).

Value: (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first‑out basis, and excluding anyportion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (b) for an Account, Credit Card Receivable or PharmacyReceivable, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise orother taxes) that have been or reasonably could be claimed by the Account Debtor or any other Person.

Voting Stock: Equity Interests of any class or classes of a corporation the holders of which are ordinarily, in the absence of contingencies, entitled toelect a majority of the corporate directors (or Persons performing similar functions).

Wage Earner Protection Program Act: the Wage Earner Protection Program Act (Canada).

Write-Down and Conversion Powers: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA ResolutionAuthority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described inthe EU Bail-In Legislation Schedule. and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-InLegislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liabilityarises, to convert all or a part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract orinstrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related or ancillary to any of those powers.

1.2. Accounting Terms. Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accountingdeterminations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recentaudited financial statements of the Borrower Agent delivered to Administrative Agent before the

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Signing Date and using the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if theBorrower Agent’s certified public accountants concur in such change, the change (if material) is disclosed to Administrative Agent, and any (including by wayof disclosure thereof in the Borrower Agent’s financial statements or other publicly-filed disclosure), and, if the calculation of any financial ratios orrequirements herein would reasonably be expected to be materially affected by such change and at the request of the Borrower Agent, the Administrative Agentor Required Lenders, such financial ratios or requirements are amended in a manner satisfactory to Required Lenders to take into account the effects of thechange; provided, that from the date of any such request until so amended, such ratio or requirement shall continue to be computed in accordance with GAAPprior to such change therein. Anything in this Agreement to the contrary notwithstanding, any obligation of a Person under a lease (whether existing as of theClosing Date or entered into in the future) that is not (or would not be) required to be classified and accounted for as a capital lease on the balance sheet of suchPerson under GAAP as in effect at the time such lease is entered into shall not be treated as a Capital Lease solely as a result of (a) the adoption of any changesin, or (b) changes in the application of, GAAP after such lease is entered into.

1.3. Uniform Commercial Code. As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York fromtime to time: “Certificated Security,” “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangibles,”“Goods,” “Instrument,” “Investment Property,” “Letter-of-Credit Right,” “Payment Intangibles,” “Security Entitlement,” “Supporting Obligation,” and“Uncertificated Security.”

1.4. Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole andnot to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from aspecified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and“include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not beapplicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. Allreferences to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document, instrument,schedule or agreement (including this Agreement) include any amendments, restatements, waivers and other modifications, supplements, extensions or renewals(to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits orschedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Personinclude successors and assigns; (f) time of day means time of day at Administrative Agent’s notice address under Section 14.3.1; or (g) discretion of any Agent,any Issuing Bank or any Lender mean the sole and absolute discretion of such Person. All determinations (including calculations of U.S. Revolver BorrowingBase, Canadian Borrowing Base and financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstancesexisting at such time. U.S. Revolver Borrowing Base and Canadian Borrowing Base calculations shall be consistent with historical methods of valuation andcalculation, and otherwise reasonably satisfactory to Administrative Agent (and not necessarily calculated in accordance with GAAP). Borrowers shall have theburden of establishing any alleged negligence, misconduct or lack of good faith by any Agent, any Issuing Bank or any Lender under any Loan Documents. Noprovision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. Anyreference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed toapply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a divisionor

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2.3. Letter of Credit Facility.

2.3.1. Issuance of Letters of Credit. Until 30 days prior to the Applicable Commitment Termination Date, from time to time from the ClosingDate (x) each Issuing Bank with a “U.S. Letter of Credit Commitment” on Schedule 1.1(ac) shall issue Letters of Credit for the account of the U.S. Borrowersor their Subsidiaries denominated in U.S. Dollars and (y) each Issuing Bank with a “Canadian Letter of Credit Commitment” on Schedule 1.1(ac) shall issueLetters of Credit for the account of the Canadian Borrower or its Subsidiaries denominated in Canadian Dollars or U.S. Dollars, in each case, on the terms setforth herein, including the following:

(a) Each Borrower acknowledges that each Issuing Bank’s issuance of any Letter of Credit is conditioned upon suchIssuing Bank’s receipt of an LC Application with respect to the requested Letter of Credit, as well as such other instruments andagreements as such Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. No Issuing Bankshall have any obligation to issue any Letter of Credit unless (i) such Issuing Bank receives an LC Request and LC Application at leastthree Business Days prior to the requested date of issuance; (ii) each U.S. LC Condition or Canadian LC Condition, as the case may be,is satisfied; and (iii) if a Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory to theApplicable Agent and the applicable Issuing Bank to eliminate any Fronting Exposure associated with such Lender. If, in sufficient timeto act, the applicable Issuing Bank receives written notice from Required Lenders that a U.S. LC Condition or Canadian LC Condition,as the case may be, has not been satisfied, such Issuing Bank shall not issue the requested Letter of Credit. Prior to receipt of any suchnotice, no Issuing Bank shall be deemed to have knowledge of any failure of U.S. LC Conditions or Canadian LC Conditions.

(b) Letters of Credit may be requested by a U.S. Borrower or Canadian Borrower to support obligations incurred in theOrdinary Course of Business, or as otherwise approved by the Applicable Agent in its Permitted Discretion. The extension of any Letterof Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at thediscretion of the applicable Issuing Bank, and any such extension may be for up to one year after the then-current date.

(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. Inconnection with issuance of any Letter of Credit, no Agent, Issuing Bank or Lender shall be responsible for the existence, character,quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences orvariation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents;the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place,manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in aLetter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection withany goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions ordelays in transmission or

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SECTION 3. INTEREST, FEES AND CHARGES

3.1. Interest.

3.1.1. Rates and Payment of Interest.

(a) The Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus theApplicable Margin; (ii) if a Canadian Prime Rate Loan, at the Canadian Prime Rate in effect from time to time, plus the ApplicableMargin; (iii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin; (iv) if a BA Equivalent RateLoan, at the BA Equivalent Rate for the applicable Interest Period, plus the Applicable Margin; and (v) if any other Obligation(including, to the extent permitted by law, interest not paid when due), at the Applicable Floating Rate in effect from time to time, plusthe Applicable Margin. Interest shall accrue from the date the Loan is advanced or the Obligation is incurred or payable, until paid bythe applicable Borrower or Borrowers. If a Loan is repaid on the same day made, one day’s interest shall accrue.

(b) During an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default ifAdministrative Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether beforeor after any judgment). Each Borrower acknowledges that the cost and expense to Agents and Lenders due to an Event of Default aredifficult to ascertain and that the Default Rate is fair and reasonable compensation for this.

(c) Interest accrued on the Loans shall be due and payable in arrears, (i) (x) with respect to any Applicable OfferedRate Loan, the last day of the Interest Period applicable to such Loan; provided, however, that if any Interest Period for an ApplicableOffered Rate Loan exceeds three (3) months, interest accrued on such Loan shall also be due and payable on the respective dates that fallevery three (3) months after the beginning of such Interest Period and (y) with respect any Applicable Floating Rate Loan, on the firstday of each month; (ii) on any date of prepayment, with respect to the principal amount of Loans being prepaid; and (iii) on theApplicable Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the LoanDocuments and, if no payment date is specified, shall be due and payable on  demand.quarterly. Notwithstanding the foregoing,interest accrued at the Default Rate shall be due and payable on demand.

3.1.2. Application of Applicable Offered Rate to Outstanding Loans.

(a) Borrowers may on any Business Day, subject to delivery of a Notice of Conversion/Continuation, elect to convertany portion of Base Rate Loans to, or to continue any Applicable Offered Rate Loan at the end of its Interest Period as, an ApplicableOffered Rate Loan. During any Default or Event of Default, the Administrative Agent may (and shall at the direction of

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3.3.1. All computations of interest for Applicable Offered Rate Loans shall be made on the basis of a year of 360 days and actual days elapsed.All other computations of interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on ayear of 365 days. For the purposes of the Interest Act (Canada), (a) whenever a rate of interest or fee rate hereunder is calculated on the basis of a year (the“deemed year”) that contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest or fee rate shall be expressed asa yearly rate by multiplying such rate of interest or fee rate by the actual number of days in the calendar year of calculation (365) and dividing it by the numberof days in the deemed year, (b) the principle of deemed reinvestment of interest shall not apply to any interest calculation hereunder and (c) the rates of intereststipulated herein are intended to be nominal rates and not effective rates or yields. Each determination by any Agent of any interest, fees or interest ratehereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate,refund or proration. All fees payable under Section 3.2 are compensation for services and are not intended to be, and to the extent permitted by Applicable Lawshall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate as to amounts payable by Borrowers underSection 3.4, 3.6, 3.7, 3.9 or 5.9, submitted to Borrower Agent or the Canadian Borrower, as the case may be, by the Applicable Agent or the affected Lender, asapplicable, shall be final, conclusive and binding for all purposes, absent manifest error, and the applicable Borrower or Borrowers shall pay such amounts tothe appropriate party within 10 days following receipt of the certificate.

3.3.2. EACH OF THE OBLIGORS CONFIRMS THAT IT FULLY UNDERSTANDS AND IS ABLE TO CALCULATE THE RATE OFINTEREST APPLICABLE TO EACH OF THE LOANS BASED ON THE METHODOLOGY FOR CALCULATING PER ANNUM RATES PROVIDEDFOR IN THIS AGREEMENT. Each Agent agrees that if requested in writing by the Borrower Agent, it will calculate the nominal and effective per annum rateof interest on any Loan outstanding at the time of such request and provide such information to the Borrower Agent promptly following such request; provided,that any error in any such calculation, or any failure to provide such information on request, shall not relieve the Borrowers or any other Obligors of any of itsobligations under this Agreement or any other Loan Document, nor result in any liability to the Administrative Agent or any Lender. EACH OBLIGORHEREBY IRREVOCABLY AGREES NOT TO PLEAD OR ASSERT, WHETHER BY WAY OF DEFENSE OR OTHERWISE, IN ANY PROCEEDINGRELATING TO THE LOAN DOCUMENTS, THAT THE INTEREST PAYABLE UNDER THE LOAN DOCUMENTS AND THE CALCULATIONTHEREOF HAS NOT BEEN ADEQUATELY DISCLOSED TO THE OBLIGORS WHETHER PURSUANT TO SECTION 4 OF THE INTEREST ACT(CANADA) OR ANY OTHER APPLICABLE LAW OR LEGAL PRINCIPLE.

3.4. Reimbursement Obligations. Borrowers shall reimburse Agents and Lenders for all Extraordinary Expenses. Borrowers shall alsoreimburse Agents for all reasonable legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred by them in connection with (a)negotiation and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions relating to anyCollateral, Loan Documents and transactions contemplated thereby, including (i) any actions taken to perfect or maintain priority of each Agent’s Liens on anyCollateral, to maintain any insurance required hereunder or to verify Collateral and (ii) the Platform or any other dedicated agency web page on the internet todistribute to the Lenders and to other investors or potential investors any required documentation and financial information regarding the Loan Documents andthe Loans; and (c) subject to the limits of Section 10.1.1(b), each inspection, audit or appraisal with respect to any Obligor or Collateral, whether prepared byany Agent’s personnel or a third party; provided, however, such reimbursement obligation in respect of legal fees and expenses shall be limited to reasonablefees and expenses of a single external counsel (and, if necessary, the reasonable

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fees and expenses of a single external counsel (and, if necessary, the reasonable fees and expenses of one firm of local counsel in each relevant jurisdiction(which may include a single special counsel acting in multiple jurisdictions) and, in the case of an actual or perceived conflict of interest, where such Agent orLender affected by such conflict informs the Borrower Agent of such conflict and thereafter retains its own counsel, of another firm of counsel for such affectedAgent or Lender) to the Agents promptly invoiced in writing to the Borrower Agent. Legal, accounting and consulting fees may be charged to Borrowers byAgents’ professionals at their usual and customary hourly rates for similar services, regardless of any reduced or alternative fee billing arrangements that anyAgent, any Lender or any of their Affiliates may have with such professionals with respect to this or any other transaction. Borrowers acknowledge that counselmay provide the Administrative Agent with a benefit, such as a discount, credit or other accommodation, based on counsel’s overall relationship with theAdministrative Agent, including fees paid hereunder. If, for any reason (including inaccurate reporting on financial statements or a Compliance Certificate), it isdetermined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively andBorrowers shall immediately pay to the Applicable Agent, for the Pro Rata benefit of the Applicable Lenders, an amount equal to the difference between theamount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under thisSection 3.4 shall be due onwithin 30 days of written demand therefor.

3.5. Illegality. If any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it isunlawful, for any Lender to perform any of its obligations hereunder to make, maintain, fund or charge applicable interest or fees with respect to any Loans orLetters of Credit, or to determine or charge interest rates based upon any Applicable Offered Rate, or any Governmental Authority has imposed materialrestrictions on the authority of such Lender to purchase or sell, or to take deposits of, U.S. Dollars or Canadian Dollars in the London interbank market, anyother relevant interbank market or the position of such Lender in such market then, on notice thereof by such Lender to the Applicable Agent, any obligation ofsuch Lender to perform such obligations to make, maintain or fund such Loans or participate in such Letters of Credit (or to charge interest or fees with respectthereto), or to continue Applicable Offered Rate Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended until such Lender notifies theApplicable Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrowers shall prepay the applicableLoans, Cash Collateralize the applicable LC Obligations or, in the case of the U.S. Borrowers and if applicable, convert all LIBOR Loans of such Lender toBase Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, orimmediately, if such Lender may not lawfully continue to maintain such Base Rate Loans. Upon any such prepayment or conversion, Borrowers shall also payaccrued interest on the amount so prepaid or converted.

3.6. Inability to Determine Rates. The Applicable Agent will promptly notify Borrower Agent and Lenders if, in connection with any request for aBorrowing of, or conversion to or continuation of, an Applicable Offered Rate Loan (a) such Agent determines that (i) deposits (whether in U.S. Dollars orCanadian Dollars) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period ofsuch Loan, or (ii) adequate and reasonable means do not exist for determining LIBOR or the BA Equivalent Rate for the requested Interest Period, or (b) suchAgent or Required Lenders determine for any reason that LIBOR or the BA Equivalent Rate for the requested Interest Period does not adequately and fairlyreflect the cost to such Lenders of funding such Loan. Thereafter, the obligation of the Applicable Lenders to make or maintain LIBOR Loans or BA EquivalentRate Loans, as the case may be, shall be suspended until the Applicable Agent (upon instruction by Required Lenders) withdraws such notice. Upon receipt ofsuch notice, Borrower Agent or the Canadian Borrower, as the case may be, may revoke any pending request for a Borrowing of, conversion to or continuationof an Applicable Offered Rate Loan (and, in the case of the

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(c) If any Borrower maintains any disbursement account with any Agent or any Affiliate of any Agent, thenpresentation for payment of any Payment Item when there are insufficient funds to cover it shall be deemed to be a request for a BaseRate Loan, in the case of the U.S. Borrowers, or a BA Equivalent Rate Loan, in the case of the Canadian Borrower, on the date of suchpresentation, in the amount of the Payment Item. The proceeds of such Loan may be disbursed directly to the disbursement account.

4.1.2. Fundings by Lenders. Each Applicable Lender shall timely honor its U.S. Revolver Commitment or Canadian Commitment, as the casemay be, by funding its Pro Rata share of each Borrowing of Loans that is properly requested hereunder. Except for Borrowings to be made as Swingline Loans,the Applicable Agent shall endeavor to notify the Applicable Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 2:00 p.m,. on theproposed funding date for Base Rate Loans or by 3:00 p.m. at least two Business Days before any proposed funding of Applicable Offered Rate Loans. EachApplicable Lender shall fund to the Applicable Agent such Lender’s Pro Rata share of the Borrowing to the account specified by the Applicable Agent inimmediately available funds not later than 4:00 p.m. on the requested funding date, unless the Applicable Agent’s notice is received after the times providedabove, in which case the Applicable Lender shall fund its Pro Rata share by 11:00 a.m. on the next Business Day. Subject to its receipt of such amounts from theApplicable Lenders, the Applicable Agent shall disburse the proceeds of the Loans as directed by Borrower Agent or the Canadian Borrower, as the case maybe. Unless the Applicable Agent shall have received (in sufficient time to act) written notice from a Lender that it does not intend to fund its Pro Rata share of aBorrowing, the Applicable Agent may assume that such Lender has deposited or promptly will deposit its share with such Agent, and such Agent may disburse acorresponding amount to U.S. Borrowers or the Canadian Borrower, as the case may be. If a Lender’s share of any Borrowing or of any settlement pursuant toSection 4.1.3(b) is not received by the Applicable Agent, then the applicable Borrower or Borrowers agree to repay to the Applicable Agent on demand theamount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to the Borrowing. Subject to Section 3.8, aLender or Issuing Bank may fulfill its obligations under Loan Documents through one or more Lending Offices, and this shall not affect any obligation ofObligors under the Loan Documents or with respect to any Obligations.

4.1.3. Swingline Loans; Settlement.

(a) Subject to the terms and conditions set forth herein, on any Business Day from and after the Closing until the Business Dayprior to the Maturity Date, (i) the U.S. Swingline Lender shall advance Swingline Loans to the U.S. Borrowers up to an aggregate outstandingamount equal to U.S. $100,000,000 (and notwithstanding the fact that such Swingline Loans, when aggregated with the Total U.S. RevolverOutstandings of such Person in its separate capacity as a U.S. Revolver Lender, may exceed the amount of the U.S. Revolver Commitment ofthe U.S. Swingline Lender); provided that, (x) after giving effect to any such Swingline Loan, the Total U.S. Revolver Outstandings at such time(including the requested Swingline Loan) would not exceed the U.S. Revolver Borrowing Base and (y) subject to the immediately precedingparenthetical, the Total U.S. Revolver Outstandings and other exposure with respect to the U.S. Revolver Commitments (including its Pro Ratapurchase of participations in Swingline Loans made by the U.S. Swingline Lender) of any U.S. Revolver Lender shall not exceed its U.S.Revolver Commitment and (ii) the Canadian Swingline Lender shall advance Swingline Loans to the Canadian

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day of such Fiscal Period. Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested byAdministrative Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to Administrative Agenta report based on each such inventory and count promptly upon completion thereof, together with such supporting information as Administrative Agent mayrequest. Administrative Agent may participate in and observe each physical count.

8.3.2. Returns of Inventory. No Borrower or Obligor shall return any Inventory to a supplier, vendor or other Person, whether for cash, creditor otherwise, unless (a) such return is in the Ordinary Course of Business; (b) no Default, Event of Default, U.S. Revolver Overadvance or CanadianOveradvance exists or would result therefrom; and (c) while a Trigger Event is in effect, any payment received by an Obligor for a return is promptly remitted tothe Applicable Agent for application to the applicable Obligations.

8.3.3. Acquisition, Sale and Maintenance. No Borrower shall, and each Borrower shall cause each other Obligor not to, acquire or accept anyInventory on consignment or approval, and shall take all steps to assure that all Inventory is produced in accordance with Applicable Law in all materialrespects, including the FLSA. No Borrower shall, and each Borrower shall cause each other Obligor not to, sell any Inventory on consignment or approval orany other basis under which the customer may return or require a Borrower or other Obligor to repurchase such Inventory. Borrowers shall, and shall cause eachother Obligor to, use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and inconformity with all Applicable Law, and shall make current rent payments (within applicable grace periods provided for in leases) at all material locationswhere any ABL Priority Collateral is located.

8.4. [Intentionally Omitted.]

8.5. Cash  Management;  Administration  of  Deposit  Accounts. All Deposit Accounts maintained by Obligors into which Cash Receipts aredeposited, including all Dominion Accounts, are set forth on the Perfection Certificates. To the extent any Deposit Accounts into which Cash Receipts aredeposited are not subject to a Deposit Account Control Agreement with the Administrative Agent on the Closing Date, within 90 days of the Closing Date, eachBorrower shall, and shall cause each other Obligor to, take all actions necessary to establish the Administrative Agent’s control of each such Deposit Accountinto which Cash Receipts are deposited (other than (a) an account exclusively used for payroll, payroll taxes or employee benefits, (b) an account containing notmore than U.S. $1,000,000 at any time, (c) a zero balance account, (d) an account that solely hold the proceeds of the sale of Term Priority Collateral, (e) anaccount into which funds are solely deposited for the purpose of trust related activities or (f) that certain account held by the Canadian Borrower at DesjardinBank as further described on the Perfection Certificate for the Canadian Borrower; provided, that such account contains not more than CD$1,000,000 at anytime and the funds in such account are swept at least weekly to a Deposit Account held by the Canadian Borrower that is subject to a Deposit Account ControlAgreement) by causing, to the extent necessary, each institution maintaining any such Deposit Account for an Obligor to enter into a Deposit Account ControlAgreement. Each Borrower shall, and shall cause each other Obligor to, be the sole account holder of each Deposit Account into which Cash Receipts aredeposited of such Obligor and shall not allow any other Person (other than the Applicable Agent) to have control over such Deposit Account or any Propertydeposited therein. Each Borrower shall, and shall cause each other Obligor to, promptly notify the Administrative Agent of any opening or closing of a DepositAccount into which Cash Receipts are deposited and, with the consent of the Administrative Agent, will amend the applicable Perfection Certificate to reflectsame.

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8.6.3. Defense of Title to Collateral. Each Borrower shall at all times defend its title to Collateral and each Agent’s Liens therein against allPersons, claims and demands whatsoever, except Permitted Liens.

SECTION 9. REPRESENTATIONS AND WARRANTIES

9.1. General Representations and Warranties. To induce Agents and Lenders to enter into this Agreement and to make available the U.S. RevolverCommitments, Canadian Commitments, Loans and Letters of Credit, Borrowers represent and warrant on the Closing Date and on each other date on which therepresentations and warranties are made under the Loan Documents (including pursuant to Section 6.3):

9.1.1. Organization and Qualification. Each Borrower and Subsidiary is duly organized, validly existing and, except for such failures as couldnot reasonably be expected to have a Material Adverse Effect in good standing under the laws of the jurisdiction of its organization. Each Borrower andSubsidiary is duly qualified, authorized to do business and in good standing as a foreign corporation, partnership or limited liability company, as applicable, ineach jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect.

9.1.2. Power and Authority. Each Obligor has all requisite corporate power and authority and is duly authorized to execute, deliver andperform its Loan Documents and has executed and delivered each Loan Document to which it is a party. The execution, delivery and performance of the LoanDocuments have been duly authorized by all necessary action, and do not (a) require any consent or approval of any holders of Equity Interests of any Obligor,other than those already obtained; (b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any Applicable Law or MaterialContract that could reasonably be expected to have a Material Adverse Effect; or (d) result in or require the imposition of any Lien (other than Permitted Liens)on any Property of any Obligor.

9.1.3. Enforceability. Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordancewith its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally andgeneral principles of equity.

9.1.4. Capital Structure. Schedule  9.1.4 shows, as of the Signing Date, for each Borrower and Subsidiary, its name, its jurisdiction oforganization, its authorized and issued Equity Interests, the holders of its Equity Interests (other than with respect to UNFI), and all agreements binding on suchholders with respect to their Equity Interests. Except as disclosed on Schedule 9.1.4, in the five years preceding the Signing Date, no Borrower or Subsidiaryhas acquired all or substantially all of the assets of any other Person nor been the surviving entity in a merger, amalgamation or combination. Each Borrower hasgood title to its Equity Interests in its Subsidiaries, and all such Equity Interests are duly issued, fully paid and non-assessable. There are no outstandingpurchase options, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to EquityInterests of any Borrower (other than UNFI) or any Subsidiary.

9.1.5. Title to Properties; Priority of Liens.

(a) Each Borrower and Subsidiary has good and marketable title to (or valid leasehold interests in) all of its RealEstate, and good title to all of its material personal Property, including all Property reflected in any financial

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statements delivered to Administrative Agent or Lenders, in each case free of Liens except Permitted Liens and which failure to havesuch title or interest could not reasonably be expected to have a Material Adverse Effect. Each Borrower and Subsidiary has paid anddischarged all material lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens.

(b) (i) When all appropriate filings or recordings are made in the appropriate offices as may be required underapplicable Laws (which filings or recordings shall be made to the extent required by any Security Document) and (ii) upon the taking ofpossession or control by the Administrative Agent of such Collateral with respect to which a security interest may be perfected only bypossession or control (which possession or control shall be given to the Administrative Agent to the extent required by any SecurityDocument or the Intercreditor Agreement), the Liens created by such Security Documents will constitute so far as possible underrelevant Law fully perfected Liens on (with the priority set forth in the Intercreditor Agreement), and security interests in, all right, titleand interest of the Obligors in such Collateral to the extent perfection can be obtained by filing financing statements or upon the takingof possession or control, in each case subject to no Liens other than Permitted Liens.

9.1.6. Accounts. Administrative Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representationsmade by Borrowers with respect thereto. Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing BaseCertificate, that:

(a) it is genuine and in all respects what it purports to be, and is not evidenced by a judgment;

(b) it arises out of a completed, bona fide sale and delivery of goods or rendition of services in the Ordinary Course ofBusiness, and substantially in accordance with any purchase order, contract or other document relating thereto;

(c) it is for a sum certain, maturing as stated in the invoice covering such sale or rendition of services, a copy of whichhas been furnished or is available to Administrative Agent on request;

(d) it is not subject to any offset, Lien (other than Applicable Agent’s Lien), deduction, defense, dispute, counterclaimor other adverse condition except as arising in the Ordinary Course of Business and disclosed to Administrative Agent; and it isabsolutely owing by the Account Debtor, without contingency in any respect;

(e) no purchase order, agreement, document or Applicable Law restrictseffectively prohibits (after giving effect toapplicable provisions of the UCC and PPSA) assignment of the Account to any Agent (regardless of whether, under the UCC or PPSA,as applicable, the restriction is ineffective),

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and the applicable Borrower is the sole payee or remittance party shown on the invoice;

(f) no extension, compromise, settlement, modification, credit, deduction or return has been authorized with respect tothe portion of Account so shown as an Eligible Account, except discounts or allowances granted in the Ordinary Course of Business forprompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Administrative Agenthereunder; and

(g) to the Borrowers’ knowledge, (i) there are no facts or circumstances that are reasonably likely to materially impairthe enforceability or collectibility of suchcollectability of the portion of such Account so shown as an Eligible Account; (ii) the AccountDebtor had the capacity to contract when the Account arose, continues to meet the applicable Borrower’s customary credit standards, isSolvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii)there are no proceedings or actions threatened or pending against anythe applicable Account Debtor that could reasonably be expected tohave a material adverse effect on thesuch Account Debtor’s financial condition.

9.1.7. Financial Statements. The consolidated balance sheets, and related statements of income, cash flow and shareholder’s equity, ofBorrowers and Subsidiaries that have been and are hereafter delivered to Administrative Agent and Lenders (including the financial statements described inclause (i) of Section 6.2.4), are prepared in accordance with GAAP, and at the time of delivery fairly present the financial positions and results of operations ofBorrowers and Subsidiaries at the dates and for the periods indicated (in the case of interim statements, subject to year-end adjustments and the absence offootnotes). All projections delivered from time to time to the Administrative Agent and Lenders, in each case, have been prepared in good faith, based onassumptions believed by the management of Borrowers to be reasonable in light of the circumstances at the time of preparation; it being understood that anysuch projections (i) are subject to significant uncertainties and contingencies, many of which are beyond the control of the Borrower Agent and its Subsidiaries,that no assurance can be given that any particular projections will be realized, that actual results may differ and that such differences may be material and (ii) arenot a guarantee of performance. Since August 1, 2017, there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary thatcould reasonably be expected to have a Material Adverse Effect. On the Closing Date, the Borrower Agent and its Subsidiaries are Solvent.

9.1.8. Surety Obligations. No Borrower or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assurespayment or performance of any obligation of any other Person, except as permitted hereunder.

9.1.9. Taxes. Each Borrower and Subsidiary has (a) filed all federal, state, provincial, territorial and local tax returns and other reports relatingto taxes that it is required by law to file, except for any tax returns and reports relating to taxes (i) for which the failure to file would not be material, individuallyor in the aggregate, or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect towhich such Borrower or such Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP, and (b) paid, or made provision forthe payment of, all Taxes upon it, its income and its Properties that are due and payable, except to the extent being Properly Contested or the failure to paywould not result in a

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Material Adverse Effect. The provision for Taxes on the books of each Borrower and Subsidiary is adequate for all years not closed by applicable statutes, andfor its current Fiscal Year.

9.1.10. Brokers. There are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactionscontemplated by the Loan Documents, other than fees payable to the Lead Arrangers and Lenders in connection with the arrangement of this Agreement andfunding of the initial Borrowings hereunder on the Closing Date.

9.1.11. Intellectual Property. Each Borrower and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for theconduct of its business, without conflict with any rights of others that could reasonably be expected to have a Material Adverse Effect. There is no pending or, toany Borrower’s knowledge, threatened Intellectual Property Claim with respect to any Borrower, any Subsidiary or any of their Property (including anyIntellectual Property) that could reasonably be expected to have a Material Adverse Effect. Except as disclosed on Schedule 9.1.11, no Borrower or Subsidiarypays or owes any royalty to any Person with respect to any Intellectual Property, other than de minimis amounts. All registered or applied-for patents,trademarks and copyrights, exclusive licenses of registered copyrights and designs, included in the material Intellectual Property owned by any Borrower orSubsidiary on the Signing Date is shown on Schedule 9.1.11.

9.1.12. Governmental Approvals. Each Borrower and Subsidiary has, is in compliance with, and is in good standing with respect to, allapplicable Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties, except where noncompliance or the failure tobe in good standing could not reasonably be expected to have a Material Adverse Effect. All necessary import, export or other licenses, permits or certificatesfor the import or handling of any goods or other Collateral have been procured and are in effect, and Borrowers and Subsidiaries have complied with all foreignand domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected tohave a Material Adverse Effect.

9.1.13. Compliance with Laws. Each Borrower and Subsidiary has duly complied, and its Properties and business operations are incompliance, in all material respects with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.There have been no citations, notices or orders of noncompliance issued to any Borrower or Subsidiary under any Applicable Law, except where suchnoncompliance could not reasonably be expected to have a Material Adverse Effect. No InventoryObligor has been produced any Inventory in violation of theFLSA, except where such noncompliance could not reasonably be expected to have a Material Adverse Effect.

9.1.14. Compliance with Environmental Laws. Except as disclosed on Schedule 9.1.14, no Borrower’s or Subsidiary’s past or presentoperations, Real Estate or other Properties are subject to any pending (or, to the knowledge of any Borrower or Subsidiary, threatened) federal, state, provincial,territorial or local investigation to determine whether any remedial action is needed to address any environmental pollution, Hazardous Material orenvironmental clean-up that, if such investigation is determined adversely to any Borrower or Subsidiary, could reasonably be expected, individually or in theaggregate, to have a Material Adverse Effect. No Borrower or Subsidiary has received any Environmental Notice that could reasonably be expected,individually or in the aggregate, to have a Material Adverse Effect, nor to the knowledge of any Borrower or Subsidiary has any Environmental Notice beenthreatened. No Borrower or Subsidiary has any liability (contingent or otherwise) arising under Environmental Law or with respect to any EnvironmentalRelease, environmental pollution or

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Hazardous Material on any Real Estate now or previously owned, leased or operated by it, if the same could reasonably be expected to have a Material AdverseEffect.

9.1.15. Burdensome Contracts. No Borrower or Subsidiary is a party or subject to any contract, agreement or charter restriction that couldreasonably be expected to have a Material Adverse Effect.

9.1.16. Litigation. Except as shown on Schedule 9.1.16, there are no proceedings or investigations pending or, to any Borrower’s knowledge,threatened in writing against any Borrower or Subsidiary, or any of their businesses, operations, Properties or condition (financial or otherwise), that (a) relate toany Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected to be determined adversely to such Borrower or Subsidiary, andif so determined, to have a Material Adverse Effect. Except as shown on such Schedule or otherwise disclosed to the Administrative Agent in writing, as of theClosing Date no Obligor has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, as of the Closing Date a Commercial TortClaim for less than U.S.$1,000,000). No Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authoritythat could reasonably be expected to have a Material Adverse Effect.

9.1.17. No Defaults. No event or circumstance has occurred or existsand is continuing that constitutes a Default or Event of Default. NoBorrower or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute adefault, under any Material Contract if such default could reasonably be expected to result in a Material Adverse Effect.

9.1.18. ERISA; Canadian Plans. Except as disclosed on Schedule 9.1.18:

(a) No Obligor has, as of the Signing Date, any Plan. Each Plan is in compliance in all material respects with theapplicable provisions of ERISA, the Code, and other federal, state, provincial and territorial laws except to the extent any suchnoncompliance could not reasonably be expected to have a Material Adverse Effect. Each Plan that is intended to qualify under Section401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently beingprocessed by the IRS with respect thereto and, to the knowledge of Borrowers, nothing has occurred which would prevent, or cause theloss of, such qualification, in each case except to the extent the failure to obtain such determination letter, make application therefor orretain such qualification could not reasonably be expected to have a Material Adverse Effect. Each Obligor and ERISA Affiliate has inall material respects met all applicable requirements under the Code and ERISA, and no application for a waiver of the minimumfunding standards or an extension of any amortization period has been made with respect to any Plan, except to the extent such events orcircumstances could not reasonably be expected to have a Material Adverse Effect.

(b) There are no pending or, to the knowledge of Borrowers, threatened claims, actions or lawsuits, or action by anyGovernmental Authority, with respect to any Plan or any Canadian Plan that could reasonably be expected to have a Material AdverseEffect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan or any

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prohibited investment transaction or violation of any duty of an administrator with respect to any Canadian Plan that has resulted in orcould reasonably be expected to have a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any UnfundedPension Liability or has a “defined benefit provision” as defined in the ITA; (iii) no Obligor or ERISA Affiliate has incurred, orreasonably expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 ofERISA, would result in such liability) under Section 4201 of ERISA with respect to a Multiemployer Plan; (iv) no Obligor or ERISAAffiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA; and (v) as of the most recent valuationdate for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and noObligor or ERISA Affiliate knows of any fact or circumstance that could reasonably be expected to cause the funding target attainmentpercentage for any such plan to drop below 60% as of such date, except to the extent such events or circumstances could not reasonablybe expected to have a Material Adverse Effect.

(d) Each Canadian Plan, other than a Canadian MEPP (and, to the knowledge of the Canadian Borrower and itsSubsidiaries, each Canadian Plan that is a Canadian MEPP), is administered in compliance in all material respects with Applicable Lawsexcept for such noncompliance as could not reasonably be expected to have a Material Adverse Effect. Each Canadian Plan, other than aCanadian MEPP (and, to the knowledge of the Canadian Borrower and its Subsidiaries, each Canadian Plan that is a Canadian MEPP)that is intended to qualify for tax-preferred status is, to the extent applicable, duly registered under applicable pension standards lawsand the Income Tax Act (Canada), or is otherwise administered in such a manner as to qualify for such tax-preferred status, and in allcases, to the knowledge of the Canadian Borrower and its Subsidiaries, nothing has occurred which would prevent, or cause the loss of,such qualification, except in each case for such failures as could not reasonably be expected to result in a Material Adverse Effect. TheCanadian Borrower and its Subsidiaries have made all required contributions to each Canadian Plan except for such failures as could notreasonably be expected to have a Material Adverse Effect, and no application for, or adoption of, solvency funding relief pursuant to thePension Benefits Act (Ontario) or applicable pension standards legislation of another Canadian jurisdiction has been made with respectto any Canadian Plan.

(e) (i) No Canadian Pension Event has occurred or is reasonably expected to occur; (ii) no Canadian Plan that is aregistered pension plan, other than a Canadian MEPP, has any Unfunded Pension Liability; (iii) neither the Canadian Borrower nor anyof its Subsidiaries has incurred, or reasonably expects to incur, any liability under the Pension Benefits Act (Ontario) or applicablepension standards legislation of another Canadian jurisdiction or under the Income Tax Act (Canada) (other than contributions orpremiums due and not delinquent to such a plan or the Pension Benefits Guarantee Fund (Ontario)); and (iv) neither the CanadianBorrower nor any

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its Subsidiaries has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of noticeunder the Pension Benefits Act (Ontario) or applicable pension standards legislation of another Canadian jurisdiction or under theIncome Tax Act (Canada), would result in such liability) with respect to a Canadian MEPP, except to the extent such events orcircumstances could not reasonably be expected to have a Material Adverse Effect.

(f) With respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms ofthe Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value ofthe assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserveestablished for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefitobligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuationsmost recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and (iii) ithas been registered as required and has been maintained in good standing with applicable regulatory authorities, except in each case forsuch failures as could not reasonably be expected to have a Material Adverse Effect.

9.1.19. Trade Relations. Except to the extent that the same could not reasonably be expected to have a Material Adverse Effect, (a) there existsno actual or threatened termination, limitation or modification of any business relationship between any Borrower or Subsidiary and any customer or supplier, orany group of customers or suppliers and (b) there exists no condition or circumstance that could reasonably be expected to impair the ability of any Borrower orSubsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Signing Date.

9.1.20. Labor Relations. Except as described on Schedule 9.1.20, (a) as of the Closing Date no Borrower or Subsidiary is party to or bound byany collective bargaining agreement, management agreement or consulting agreement and (b) there are no material grievances, disputes or controversies withany union or other organization of any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or threatened strikes, workstoppages or demands for collective bargaining, except those that could not reasonably be expected to have a Material Adverse Effect.

9.1.21. Payable Practices. No Borrower or Subsidiary has made any material change in its historical accounts payable practices from those ineffect on the Signing Date that could reasonably be expected to result in a Material Adverse Effect.

9.1.22. Not a Regulated Entity. No Obligor is an “investment company” or a “person directly or indirectly controlled by or acting on behalf ofan investment company” within the meaning of the Investment Company Act of 1940.

9.1.23. Margin Stock. No Borrower or Subsidiary is engaged, principally or as one of its important activities, in the business of extendingcredit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or toreduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related

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purpose governed by Regulations T, U or X of the Board of Governors, except in compliance with applicable requirements of such regulations.

9.1.24. PACA and PSA. No material PACA Claims or PSA Claims are pending or, to the Borrowers’ knowledge, threatened in writing, againstany of the Borrowers or their Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.

9.1.25. [Intentionally Omitted.]

9.1.26. Perfection Certificate. Each Borrower, for itself and on behalf of each other Obligor, represents and warrants to the Secured Parties andthe Administrative Agent as followsthat, in each case as of the date of delivery of the most recent Perfection Certificate to the Administrative Agent: (a) suchObligor’s exact legal name is that indicated on the most recentsuch Perfection Certificate delivered by such Obligor and on the signature page to such PerfectionCertificate, (b) such Obligor is an organization of the type, and is organized in the jurisdiction, set forth in such Perfection Certificate, (c) such PerfectionCertificate accurately sets forth such Obligor’s organizational identification number or accurately states that such Obligor has none, (d) such PerfectionCertificate accurately sets forth such Obligor’s place of business or, if more than one, its chief executive office, as well as such Obligor’s mailing address, ifdifferent, (e) all other information set forth on such Perfection Certificate pertaining to such Obligor is accurate and complete, in all material respects and (f)except as disclosed to the Applicable Agent in writing, there has been no material change (it being understood that a change in the account number of anydeposit account, security account or investment account set forth therein shall be deemed to be a material change) in any of such information since the date onwhich such Perfection Certificate was signed by such Obligor.

9.1.27. Sanctions. No Borrower, Subsidiary or, to the knowledge of any Borrower or Subsidiary, any director, officer, employee or agentthereof, is an individual or entity that is currently the target of any Sanctions. No Borrower or Subsidiary is located, organized or resident in a DesignatedJurisdiction.

9.1.28. Patriot Act; Anti-Terrorism Laws. No proceeds of the Loans will be used by the Borrowers or their respective Subsidiaries (a) inviolation of United States Foreign Corrupt Practices Act of 1977, (b) in violation of any applicable provisions of the Patriot Act, (c) in violation of applicableSanctions or (d) in violation of the Investment Company Act of 1940.

9.1.29. HIPAA Compliance.

(a) To the extent that and for so long as any Obligor is a “covered entity” within the meaning of HIPAA, such Obligor(i) has undertaken or will promptly undertake all appropriate surveys, audits, inventories, reviews, analyses and/or assessments(including any necessary risk assessments) of all areas of its business and operations required by HIPAA; (ii) has developed or willpromptly develop an appropriate plan and time line for becoming HIPAA Compliant (a “HIPAA Compliance Plan”); and (iii) hasimplemented or will implement those provisions of such HIPAA Compliance Plan in all material respects necessary to ensure that suchObligor is or becomes HIPAA Compliant, in each case except for such failures as could not reasonably be expected to result in aMaterial Adverse Effect.

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(b) For purposes hereof, “HIPAA Compliant” shall mean that an Obligor (i) is or will be in compliance in all materialrespects with each of the applicable requirements of the so-called “Administrative Simplification” provisions of HIPAA on and as ofeach date that any part thereof, or any final rule or regulation thereunder, becomes effective in accordance with its or their terms, as thecase may be (each such date, a “HIPAA Compliance Date”) and (ii) is not and would not reasonably be expected to become, as of anydate following any such HIPAA Compliance Date, the subject of any civil or criminal penalty, process, claim, action or proceeding, orany administrative or other regulatory review, survey, process or proceeding (other than routine or mandated surveys or reviewsconducted by any Governmental Authority, government health plan or other accreditation entity) that has had or would reasonably beexpected to have a Material Adverse Effect.

(c) Each Obligor has entered into a business associate agreement with any third party acting on behalf of the Obligor asa business associate as defined in 45 C.F.R. §160.103, where the failure to enter into such a business associate agreement has had orwould reasonably be expected to have a Material Adverse Effect.

9.1.30. Compliance with Health Care Laws. Without limiting the representations and warranties set forth in Section 9.1.29.:

(a) Each Obligor is in compliance in all material respects with all applicable Health Care Laws, including all Medicareand Medicaid program rules and regulations applicable to them, in each case except as could not reasonably be expected to result in aMaterial Adverse Effect. Without limiting the generality of the foregoing, no Obligor has received notice by a Governmental Authorityof any violation of any provisions of the Medicare and Medicaid Anti-Fraud and Abuse or Anti-Kickback Amendments of the SocialSecurity Act (presently codified in Section 1128(B)(b) of the Social Security Act) or the Medicare and Medicaid Patient and ProgramProtection Act of 1987, except for such notices as could not reasonably be expected to result in a Material Adverse Effect.

(b) Each Obligor has maintained in all material respects all records required to be maintained by the Food and DrugAdministration, Drug Enforcement Agency and State Boards of Pharmacy, the Federal and State Medicare and Medicaid programs andas otherwise required by applicable Health Care LawsLaw and each Obligor has all necessary permits, licenses, franchises, certificatesand other approvals or authorizations of Governmental Authority as are required under applicable Health Care Laws, in each case exceptas could not reasonably be expected to result in a Material Adverse Effect.

(c) Each Obligor who is a Certified Medicare Provider or Certified Medicaid Provider has in a timely manner filed allrequisite cost reports, claims and other reports required to be filed in connection with all Medicare and Medicaid programs due on orbefore the date hereof, all of which are complete and correct in all material respects. There are no known claims,

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actions or appeals pending before any Third Party Payor or Governmental Authority, including any Fiscal Intermediary, the ProviderReimbursement Review Board or the Administrator of the Centers for Medicare and Medicaid Services, with respect to any Medicare orMedicaid cost reports or claims filed by any Obligor on or before the date hereof. There currently exist no restrictions, deficiencies, requiredplans of correction actions or other such remedial measures with respect to federal and state Medicare and Medicaid certifications or licensure ofany Obligor except as could not reasonably be expected to result in a Material Adverse Effect.

9.1.31. EEA Financial Institutions. No Obligor is an EEA Financial Institution.

9.2. Complete Disclosure. All written information concerning the Borrower Agent and its Subsidiaries and their respective businesses (other thanprojections, financial estimates, forecasts and budgets (collectively, “Projections”), other forward-looking information and information of a general economic orindustry nature) that has been furnished by or on behalf of the Borrower Agent or any of its Subsidiaries to any Agent, any Lead Arranger or any Lender inconnection with the transactions contemplated by this Agreement did not when furnished, taken as a whole, contain any untrue statement of a material fact oromit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which suchstatements are made, as supplemented and updated from time to time, and (b) all Projections that have been furnished by or on behalf of the Borrower Agent orany of its Subsidiaries to any Agent, any Lead Arranger or any Lender in connection with the transactions contemplated by this Agreement have been preparedin good faith based upon assumptions believed to be reasonable by such furnishing party at the time of delivery thereof; it being understood that suchProjections (i) are subject to significant uncertainties and contingencies, many of which are beyond the control of the furnishing party, that no assurance can begiven that any particular projections will be realized, that actual results may differ and that such differences may be material and (ii) are not a guarantee ofperformance.

SECTION 10. COVENANTS AND CONTINUING AGREEMENTS

10.1. Affirmative  Covenants. Commencing on the Closing Date and so long as any U.S. Revolver Commitments, Canadian Commitments orObligations are (other than Secured Bank Product Obligations and contingent indemnification and expense reimbursement obligations as to which no claim hasbeen made) outstanding, Borrowers shall, and shall cause each Subsidiary to:

10.1.1. Inspections; Appraisals.

(a) Permit any Agent from time to time, subject (except when a Default or Event of Default exists) to reasonable noticeand normal business hours, to visit and inspect the Properties of any Borrower or Subsidiary, inspect, audit and make extracts from anyBorrower’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountantssuch Borrower’s or Subsidiary’s business, financial condition, assets and results of operations. Lenders may participate in any such visitor inspection, at their own expense. No Agent or Lender shall have any duty to any Obligor to make any inspection, nor to share anyresults of any inspection, appraisal or report with any Obligor. Borrowers acknowledge that all inspections, appraisals and reports areprepared by Agents and Lenders for their purposes, and Borrowers shall not be entitled to rely upon them. Each Obligor

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provide the Administrative Agent and its advisors and consultants with sufficient access and relevant information relating to theBorrower Agent and its Subsidiaries (after giving effect to the Supervalu Acquisition) to complete such field examinations andappraisals on or prior to the ninetieth (90th) day after the Closing Date as the Administrative Agent, in its Permitted Discretion, deemsappropriate. During the period from the Closing Date and until the Administrative Agent’s receipt and reasonable opportunity to reviewsuch field examinations and appraisals, clause (b) of the U.S. Revolver Borrowing Base (other than with respect to the SupervaluBorrowers) and clause (b) of the Canadian Borrowing Base (and, in each case, the applicable components of clause (b) of the definitionof Adjusted Aggregate Availability) shall each be based on the most recently delivered Borrowing Base Certificate pursuant to theExisting UNFI ABL Credit Agreement and, with respect to the Supervalu Borrowers, clause (b) of the definition of the U.S. RevolverBorrowing Base (and the applicable components of clause (b) of the definition of Adjusted Aggregate Availability) shall be based on themost recent borrowing base certificate delivered pursuant to the Existing Supervalu Inc. Credit Agreement and such inputs shall beaggregated for the purpose of any U.S. Revolver Borrowing Base or Canadian Borrowing Base calculations hereunder; and if theAdministrative Agent does not receive such field examinations and appraisals (and an updated Borrowing Base Certificate reflectingresults of such examinations and appraisals) on or prior to the ninetieth (90th) day after the Closing Date, clause (b) of each of the of thedefinition of Canadian Borrowing Base and the definition of U.S. Revolver Borrowing Base, as applicable (and, in each case, theapplicable components of clause (b) of Adjusted Aggregate Availability) shall be zero on and after such ninetieth (90th) until theAdministrative Agent’s receipt and reasonable opportunity to review such field examinations and appraisals (and an updated BorrowingBase Certificate reflecting results of such examinations and appraisals).

10.1.2. Financial and Other Information. Keep adequate records and books of account with respect to its business activities, in which properentries are made in accordance with GAAP reflecting all financial transactions; and furnish to Administrative Agent for prompt distribution to each Lender:

(a) as soon as available, and in any event within 120 days after the close of each Fiscal Year, the Form 10-K ofBorrower Agent as of the end of such Fiscal Year, as filed with the Securities and Exchange Commission, which shall contain theunqualified, audited financial statements of Borrower Agent and its Subsidiaries as of the end of such Fiscal Year, on a consolidatedbasis, certified (without qualificationany “going concern” or like qualification, exception, emphasis of matter paragraph or explanatoryparagraph (other than such a qualification, exception, emphasis of matter paragraph or explanatory paragraph with respect to, orresulting from, the regularly scheduled maturity of Loans hereunder, the Incremental Equivalent Debt, the Term Loan Facility, orRefinancing Debt in respect of any of the foregoing, occurring within one year from the time such opinion is delivered) by a firm ofindependent certified public accountants of recognized standing selected by Borrowers and reasonably acceptable to AdministrativeAgent (it being understood that any of the top eight U.S. accounting firms are acceptable to Administrative Agent), and shall set

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forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to the AdministrativeAgent;

(b) as soon as available, and in any event within 45 days after the end of each Fiscal Quarter, the Form 10-Q ofBorrower Agent as of the end of such Fiscal Quarter and the Fiscal Year to date, as filed with the Securities and Exchange Commission,which shall contain unaudited, interim financial statements of Borrower Agent and its Subsidiaries as of the end of such Fiscal Quarterand for the portion of the Fiscal Year then elapsed, on a consolidated basis, and shall set forth in comparative form figures for thecorresponding periods of the preceding Fiscal Year, certified by the principala senior financial or accounting officer of Borrower Agentas having been prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such FiscalQuarter and the portion of the Fiscal Year then elapsed, subject to year‑end and audit adjustments and the absence of footnotes;

(c) (i) concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently ifrequested by Administrative Agent while a Default or Event of Default exists, a Compliance Certificate executed by the principalasenior financial or accounting officer of Borrower Agent, and (ii) if any Subsidiary has been designated as an Unrestricted Subsidiary,concurrently with each delivery of financial statements under clause (a) or (b) above, financial statements (in substantially the sameform as the financial statements delivered pursuant to clauses (a) and (b) above) prepared on the basis of consolidating the accounts ofthe Borrower Agent and its Subsidiaries and treating any Unrestricted Subsidiaries as if they were not consolidated with the BorrowerAgent or accounted for on the basis of the equity method but rather accounted for as an investment and otherwise eliminating allaccounts of Unrestricted Subsidiaries, together with an explanation of reconciliation adjustments in reasonable detail; provided that thefinancial statements pursuant to this clause (c)(ii) shall not be required to be delivered so long as the combined aggregate amount of totalassets as of the last day of any fiscal quarter for which financial statements have been delivered pursuant to clause (a) or (b) above andthe combined aggregate amount of gross revenues (net of payroll, taxes, benefits and other deductions permitted under GAAP) for thefiscal quarter most recently ended in each case of all Unrestricted Subsidiaries does not exceed 5.00% of the total assets of the BorrowerAgent and its Subsidiaries (including Unrestricted Subsidiaries) and 5.00% of the combined aggregate amount of such gross revenues ofthe Borrower Agent and its Subsidiaries (including Unrestricted Subsidiaries), in each case excluding intercompany assets and revenuesfor the fiscal quarter most recently ended;

(d) concurrently with delivery of financial statements under clause (a) above, copies of all management letters andother material reports submitted to Borrower Agent by its accountants in connection with such financial statements;

(e) as soon as available, and in any event within 30 days after the end of each Fiscal Quarter, or more frequently ifrequested by

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Administrative Agent while a Default oran Event of Default exists, an Aggregate Availability Certificate executed by the principalasenior financial or accounting officer of Borrower Agent;

(f) not later than the sixtieth (60th) day of each Fiscal Year, projections of Borrowers’ consolidated balance sheets,results of operations, cash flow, Aggregate Availability, U.S. Revolver Availability and Canadian Availability for such Fiscal Year,Fiscal Quarter by Fiscal Quarter and for the next three Fiscal Years, Fiscal Year by Fiscal Year;

(g) promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that anyBorrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statementsor prospectuses that any Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or anysecurities exchange; and copies of any press releases or other statements made available by a Borrower to the public concerning materialchanges to or developments in the business of such Borrower; and

(h) promptly following any reasonable request therefor, information and documentation reasonably requested by theAdministrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rulesand regulations, including the Patriot Act and the Beneficial Ownership Regulation.; and

(i) such other reports and information (financial or otherwise) as any Agent reasonably may request from time to timein connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition or business; provided, that suchinformation is otherwise prepared by or available to the Borrowers or such Subsidiary in the ordinary course of business, is of a typecustomarily provided to lenders in similar credit facilities and is not subject to attorney-client or similar privilege.

Documents required to be delivered pursuant to Section 10.1.2(a) or (b) or Section 10.1.2(g) (to the extent any such documents are included inmaterials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have beendelivered on the date (i) on which the Borrower Agent posts such documents, or provides a link thereto on the Borrower Agent’s website on the Internet at thewebsite address listed on its signature page hereto; or (ii) on which such documents are posted on the Borrower Agent’s behalf on an Internet or intranetwebsite, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by theAdministrative Agent); provided, that: (A) the Borrowers shall deliver paper copies of such documents to the Administrative Agent or any Lender upon itsrequest to the Borrower Agent to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or suchLender and (B) the Borrower Agent shall notify the Administrative Agent and each Lender (by fax transmission or other electronic mail transmission) of theposting of any such documents and provide torequired pursuant to Section 10.1.2(a) or (b) and if the Administrative Agent so requests provide it by electronicmail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain papercopies of the documents referred to

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above, and in any event shall have no responsibility to monitor compliance by the Borrowers with any such request by a Lender for delivery, and eachLender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents..

10.1.3. Notices. Notify Administrative Agent and Lenders in writing, promptly after a Borrower’s obtaining knowledge thereof, of any of thefollowing that affectsin respect of an Obligor: (a) the written threat or commencement of any proceeding or investigation, whether or not covered by insurance,that reasonably could be expected to be determined adversely and, if so determined, to have a Material Adverse Effect; (b) any pending or threatened labordispute, strike or walkout, or the expiration of any material labor contract, that could reasonably be expected to result in a Material Adverse Effect; (c) anydefault (if such default could reasonably be expected to result in a termination of such Material Contract prior to the time that it otherwise would terminate in theabsence of such default) under, or termination of, a Material Contract; (d) the existence of any Default or Event of Default; (e) any adverse final judgment in anamount exceeding U.S. $20,000,000; (f) the assertion of any Intellectual Property Claim, if an adverse resolution could reasonably be expected to have aMaterial Adverse Effect; (g) any violation or asserted violation of any Applicable Law (including ERISA, the Supplemental Pension Plans Act (Québec), thePension Benefits Act (Ontario), OSHA, FLSA, or any Environmental Laws), if an adverse resolutionthat could reasonably be expected to have a MaterialAdverse Effect; (h) any Environmental Release by an Obligor or on any Property owned, leased or occupied by an Obligor, or receipt of any EnvironmentalNotice, if such occurrence could reasonably be expected to have a Material Adverse Effect; (i) the occurrence of any ERISA Event or similar event with respectto any Canadian Plan, that could reasonably be expected to result in a Material Adverse Effect; (j) the discharge of or any withdrawal or resignation byBorrowers’ independent accountants; (k) the receipt or delivery of any material notices that any Borrower or any Subsidiary gives or receives under or inconnection with (i) PACA or any PACA Claim being asserted, (ii) PSA or any PSA Claim being asserted, (iii) any claim of any Lien under the CaliforniaProducer’s Lien Law or (iv) any claim under Section 81.1 or Section 81.2 of the Bankruptcy and Insolvency Act (Canada) being asserted, in each case wheresuch claim could reasonably be expected to result in a Material Adverse Effect; (l) any change that causes any Borrower that had not previously so qualified toqualify as a “legal entity customer” for purposes of the Beneficial Ownership Regulation; or (m) any change in the information provided in a BeneficialOwnership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification.

10.1.4. Landlord and Storage Agreements. Upon request, provide Administrative Agent with copies of all existing agreements, and promptlyafter execution thereof copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person thatowns any premises at which any ABL Priority Collateral may be kept or that otherwise may possess or handle any ABL Priority Collateral.

10.1.5. Compliance with Laws. Comply with all Applicable Laws, including ERISA, the Supplemental Pension Plans Act (Québec), thePension Benefits Act (Ontario), Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, Anti-Corruption Laws, Sanctions, PACA, PSA and laws regardingcollection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failureto comply or maintain could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, each Obligor shalland shall cause (a) each ERISA Affiliate to make prompt payment of all contributions required to be made to satisfy the minimum funding standards set forth inERISA with respect to any Pension Plan and (b) its applicable Affiliates to make prompt payment of all contributions required to be made to satisfy theminimum funding standards set forth in the Pension Benefits Act (Ontario) or under applicable pension standards legislation of another Canadian jurisdictionwith respect to any Canadian

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Plan. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Borrower or Subsidiary, it shall actpromptly and diligently to investigate and report to Administrative Agent and all appropriate Governmental Authorities the extent of, and to take appropriateaction to remediate, such Environmental Release, whether or not directed to do so by any Governmental Authority unless a failure to do so could not reasonablybe expected to have a Material Adverse Effect.

10.1.6. Taxes. Pay and discharge all material federal and state income Taxes prior to the date on which they become delinquent or penaltiesattach, unless such Taxes are being Properly Contested.

10.1.7. Insurance. In addition to the insurance required hereunder with respect to Collateral, maintain insurance with financially sound andreputable insurers, with respect to the Properties and business of Borrowers and Subsidiaries of such type (including product liability, workers’ compensationand business interruption insurance), in such amounts, and with such coverages, self-insurance (solely with respect to health, automobile and workers’compensation coverages) and deductibles as are customary for companies similarly situated.

10.1.8. Licenses. Keep each License affectingof each Obligor in respect of any Collateral (including the manufacture, distribution ordisposition of Inventory), or, any other material Property of Borrowers and Subsidiaries in full force and effect and pay all Royalties when due, in each caseexcept to the extent the failure to do so could not reasonably result in a Material Adverse Effect, any other material Property of Borrowers and Subsidiaries infull force and effect; and pay all Royalties when due.

10.1.9. Covenant to Guarantee Obligations and Give Security. At the Borrowers’ expense, take all action necessary or reasonably requested bythe Applicable Agent to ensure that the Guarantee and Collateral Requirement continues to be satisfied, including:

(a) to the extent that any condition set forth in Section 6.2.1 or Section 6.2.2 is not satisfied on the Closing Date and ispermitted to be satisfied after the Closing Date by the express terms of the final paragraph of Section 6.2, taking all actions necessary tosatisfy the requirements set forth in 6.2.1 or Section 6.2.2 within 90 days after the Closing Date (or such later date as agreed by theAdministrative Agent in its discretion);

(b) solely to the extent not covered by the foregoing clause (a), upon (x) formation or acquisition of any new direct orindirect wholly-owned Subsidiary of the Borrower Agent (other than any Excluded Obligor) or (y) any Excluded Obligor ceasing to bean Excluded Obligor (including as a result of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary), as applicable,promptly (i) notifying the Administrative Agent of such event and (ii) within forty five (45) days after such event (or such longer periodas the Applicable Agent may agree in its reasonable discretion) (a) causing each such Subsidiary to duly execute and deliver to theApplicable Agent all applicable Security Documents or joinder agreements thereto (in each case, in a form approved by the ApplicableAgent and the Borrower Agent in their reasonable discretion without the further consent of any other party hereto so long as the formthereof is not inconsistent with the requirements in the Guarantee and Collateral Requirement), which, when taken together with theSecurity Documents delivered on the Closing Date pursuant to Section 6.2.1 and

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Borrower (or any direct or indirect parent thereof) permitted by Section 10.2.4 in an aggregate amount not to exceed $15,000,000 at anyone time outstanding;

(q) Debt in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similararrangements in each case incurred in the ordinary course;

(r) Debt incurred by any Borrower or any of the Subsidiaries in respect of letters of credit, bank guarantees, bankers’acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect ofworkers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceor other Debt with respect to reimbursement-type obligations regarding workers compensation claims;

(s) Debt supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;

(t) Debt incurred by a Subsidiary that is not an Obligor, and guarantees thereof by a Subsidiary that is not an Obligor,in an aggregate principal amount not to exceed the greater of (x) $25,000,000 and (y) 3.00% of Consolidated EBITDA of the Borrowersand the Subsidiaries for the most recently ended most recently ended period of four consecutive Fiscal Quarters calculated on a proforma basis at any one time outstanding;

(u) unsecured Contribution Debt;

(v) [Intentionally Omitted];

(w) Debt assumed in connection a Permitted Acquisition or other Investment not prohibited hereunder and not createdin contemplation thereof, so long as (i) in the case of any such Debt that is secured by a Lien on the property of any Subsidiary of theBorrower Agent, the Consolidated Secured Net Leverage Ratio does not exceed 3.75 to 1.00 and (ii) in the case of any such Debt that isunsecured, the Consolidated Total Net Leverage Ratio does not exceed 3.75 to 1.00 (in each case, calculated on a pro forma basis, andafter giving effect to any other transactions consummated in connection therewith but assuming that any commitments thereunder arefully drawn as of the date of assumption); provided, that Debt incurred by a Subsidiary that is not an Obligor pursuant to this clause (w)of this Section 10.2.1, and guarantees thereof by a Subsidiary that is not an Obligor, in an aggregate principal amount not to exceed thegreater of (x) $50,000,000 and (y) 5.00% of Consolidated EBITDA of the Borrowers and the Subsidiaries for the most recently endedmost recently ended period of four consecutive Fiscal Quarters calculated on a pro forma basis at any one time outstanding;

(x) Debt of any Obligor pursuant to Customer Support Transactions; provided, that, (i) the aggregate amount of CSTExposure after giving effect to the incurrence of such Debt shall not exceed U.S.$250,000,000, (ii) the aggregate amount of SpecifiedCST Exposure after giving effect to the

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incurrence of such Debt shall not exceed U.S.$150,000,000, and (ii) no Default or Event of Default shall exist or have occurred and becontinuing after giving effect to the incurrence of such Debt; and

(y) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingentinterest on obligations described in clauses (a) through (x) above.

10.2.2. Permitted Liens. Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted Liens”):

(a) Liens pursuant to any Loan Document;

(b) Purchase Money Liens securing Permitted Purchase Money Debt or any Refinancing Debt with respect thereto;

(c) Liens for Taxes that are not delinquent or that are being Properly Contested;

(d) statutory Liens (other than (i) Liens for Taxes or imposed under ERISA, and (ii) except for those liens in respect ofcontribution amounts not yet due or payable to the pension fund, Liens imposed under the Pension Benefits Act (Ontario) or underapplicable pension standards legislation of another Canadian jurisdiction) arising in the Ordinary Course of Business, but only ifpayment of the obligations secured thereby is not delinquent for a period of more than 30 days (or if more than thirty (30) days overdue,are unfiled (or if filed have been discharged or stayed) and no other action has been taken to enforce such Lien) or is being ProperlyContested;

(e) Liens incurred or pledges or deposits made in the Ordinary Course of Business to secure the performance oftenders, bids, leases, contracts (except those relating to Borrowed Money), statutory obligations and other similar obligations surety,stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety andenvironmental obligations), or arising as a result of progress payments under government contracts, as long as such Liens are at all timesjunior to the Applicable Agent’s Liens on ABL Priority Collateral;

(f) Liens arising in the Ordinary Course of Business that are subject to Lien Waivers;

(g) Liens arising by virtue of a judgment or judicial order against any Borrower or Subsidiary, or any Property of aBorrower or Subsidiary, as long as such Liens do not constitute an Event of Default under Section 11.1(g);

(h) easements, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges orencumbrances on Real

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as reasonably determined by the Borrower Agent in good faith, (ii) the Borrower Agent shall deliver an updated Borrowing BaseCertificate within ten (10) Business Days following the disposition thereof if more than 5.00% of the assets included in the most recentcalculation of the Borrowing Base are being disposed of pursuant to this clause (m) and, (iii) the Borrowers or any applicable Subsidiaryshall receive not less than 75% of such consideration in the form of cash or Cash Equivalents (provided, however, that for the purposesof this clause (m)(iii), the following shall be deemed to be cash: (A) the assumption by the transferee of Debt or other liabilitiescontingent or otherwise of any Borrower or any of the Subsidiaries (other than subordinated debt) and the valid release of such Borroweror such Subsidiary, by all applicable creditors in writing, from all liability on such Debt or other liability in connection with suchdisposition, (B) securities, notes or other obligations received by any Borrower or any of the Subsidiaries from the transferee that areconverted by any Borrower or any of the Subsidiaries into cash or Cash Equivalents within 180 days following the closing of suchdisposition, (C) Debt (other than subordinated debt) of any Subsidiary that is no longer an Obligor as a result of such disposition, to theextent that each Borrower and each Subsidiary are released from any guarantee of payment of such Debt in connection with suchdisposition and (D) the aggregate Designated Non-Cash Consideration received by the Borrowers and the Subsidiaries for alldispositions under this clause (m) having an aggregate fair market value (determined as of the closing of the applicable disposition forwhich such Designated Non-Cash Consideration is received) not to exceed the greater of (x) $100,000,000 and (y) 12.5% ofConsolidated EBITDA of the Borrowers and the Subsidiaries for the most recently ended period of four consecutive Fiscal Quarterscalculated on a pro forma basis at any time outstanding (net of any Designated Non-Cash Consideration converted into cash and CashEquivalents received in respect of any such Designated Non-Cash Consideration and calculated on a pro forma basis) and (iv) aftergiving effect to such disposition, the Total Outstandings would not exceed the Aggregate Borrowing Base;

(n) the Borrowers and the Subsidiaries may surrender or waive contractual rights and settle or waive contractual orlitigation claims in the ordinary course of business;

(o) dispositions of non-core or obsolete assets acquired in connection with a Permitted Acquisition;

(p) any swap of assets in exchange for services or other assets in the ordinary course of business of comparable orgreater fair market value of usefulness to the business of the Borrowers and the Subsidiaries as a whole, as determined in good faith bythe Borrowers; provided that no such asset swaps may be made with ABL Priority Collateral;

(q) any sale of Equity Interests in, or Debt or other securities of, a Subsidiary that is not an Obligor;

(r) Specified Dispositions and dispositions consummated in connection with a Permitted Tax Restructuring;andprovided that (i) after giving effect to such disposition, the Total Outstandings would not exceed the

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Aggregate Borrowing Base, and (ii) the Borrower Agent shall deliver an updated Borrowing Base Certificate within ten (10) BusinessDays following the disposition thereof if more than 5.00% of the assets included in the most recent calculation of the Borrowing Baseare being disposed of pursuant to this clause (r); and

(s) dispositions by any Obligor constituting a Customer Support Transaction; provided, that, (i) the aggregate amountof CST Exposure after giving effect to such disposition shall not exceed U.S.$250,000,000, (ii) the aggregate amount of Specified CSTExposure after giving effect to such disposition shall not exceed U.S.$150,000,000, (iii) no Default or Event of Default shall exist orhave occurred and be continuing after giving effect to such disposition, and (iv) to the extent that such disposition includes a SaleLeaseback of Real Estate, (A) the consideration paid to such Obligor in connection therewith shall be paid contemporaneously withconsummation of the transaction (other than consideration received in connection with customary earn-out arrangements in an amount(calculated as of the date of such disposition as the present value of expected future payments in respect thereof) not to exceed twenty-five percent (25%) of the aggregate consideration therefor), and shall be in an amount not less than the fair market value (as reasonablydetermined by the Borrower Agent in good faith) of the property disposed of, and (B) the Administrative Agent shall have received fromeach such purchaser or transferee a collateral access agreement on terms and conditions reasonably satisfactory to the AdministrativeAgent.

To the extent any Collateral is disposed of as expressly permitted by this Section 10.2.6 to any Person other than the Borrowers or any Guarantor, suchCollateral shall be sold free and clear of the Liens created by the Loan Documents and, if requested by the Administrative Agent, upon the certification by theBorrower Agent that such disposition is permitted by this Agreement, the Administrative Agent shall be authorized to take and shall take any actions deemedappropriate in order to effect the foregoing.

10.2.7. Loans. Make any loans or other advances of money to any Person, except (a) loans or advances to an officer, director or employee forsalary, relocation expenses, travel and other business related expenses, commissions and similar items in the Ordinary Course of Business; (b) prepaid expensesand extensions of trade credit made in the Ordinary Course of Business; (c) deposits with financial institutions permitted hereunder; (d) intercompany loans andadvances by an Obligor to another Obligor; provided, that (i) the aggregate principal amount of intercompany loans and advances by an Obligor to the CanadianBorrower shall not exceed the greater of (x) U.S. $100,000,000 and (y) 12.50 % of Consolidated EBITDA of the Borrowers and the Subsidiaries for the mostrecently ended period of four consecutive Fiscal Quarters calculated on a pro forma basis (excluding any Investments received in respect of, or consisting of, thetransfer or contribution of Equity Interests in or Debt of any Foreign Subsidiary to any other Foreign Subsidiary) (in each case, plus any additional amountsnecessary to enable the Canadian Borrower to make any prepayments required pursuant to Section 3.6) and (ii) any intercompany loans or advances by theCanadian Borrower to any other Obligor shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent; and (e) loans oradvances constituting an Investment that is not prohibited by Section 10.2.5.

10.2.8. Restrictions on Payment of Certain Debt. Make any payment (whether voluntary or mandatory, or a prepayment, redemption,retirement, defeasance or acquisition) with respect

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(g) Any judgment or order for the payment of money is entered against an Obligor or any of its Subsidiaries in anamount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Obligors and Subsidiaries, theThreshold Amount (net of insurance coverage therefor that has not been denied by the insurer), unless such judgement or order is paid orotherwise satisfied or a stay of enforcement of such judgment or order is in effect, by reason of a pending appeal or otherwise;whichjudgment remains outstanding, unpaid and unstayed, for 30 consecutive days;

(h) [Intentionally Omitted.];

(i) (i) an Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs, except as permittedby this Agreement; or (ii) the Obligors and their Subsidiaries (other than an Immaterial Subsidiary), taken as a whole, are not Solvent;

(j) An Insolvency Proceeding is commenced by an Obligor or any of its Subsidiaries (other than an ImmaterialSubsidiary); an Obligor or any of its Subsidiaries (other than an Immaterial Subsidiary) makes an offer of settlement, extension orcomposition to its unsecured creditors generally; a trustee is appointed to take possession of any substantial Property of or to operate anyof the business of an Obligor or any of its Subsidiaries (other than an Immaterial Subsidiary); or an Insolvency Proceeding iscommenced against an Obligor or any of its Subsidiaries (other than an Immaterial Subsidiary) and: the Obligor or such Subsidiaryconsents to institution of the proceeding, the petition commencing the proceeding is not timely contested by the Obligor or suchSubsidiary, the petition is not dismissed within 60 days after filing, or an order for relief is entered in the proceeding;

(k) (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or couldreasonably be expected to result in liability of an Obligor in excess of an aggregate total amount which could reasonably be expected toresult in a Material Adverse Effect; or an Obligor or ERISA Affiliate fails to pay when due any installment payment with respect towithdrawal liability assessed an aggregate total amount which could reasonably be expected to result in a Material Adverse Effect underSection 4201 of ERISA under a Multiemployer Plan; (ii) a Canadian Pension Event occurs with respect to a Canadian Plan that could, inthe Administrative Agent’s good faith judgment, subject the Canadian Borrower or any of its Subsidiaries to any tax, penalty or otherliabilities under the Pension Benefits Act (Ontario) or applicable pension standards legislation of another Canadian jurisdiction or underthe Income Tax Act (Canada) in excess of an aggregate total amount which could reasonably be expected to result in a Material AdverseEffect, or if the Canadian Borrower or any of its Subsidiaries is in default with respect to required payments to a Canadian Plan or anyLien arises (save for contribution amounts not yet due or payable to a Canadian Plan) in connection with any Canadian Plan which couldreasonably be expected to result in a Material Adverse Effect; or (iii) any event similar to the foregoing occurs or exists with

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respect to a Foreign Plan which could reasonably be expected to result in a Material Adverse Effect;

(l) A Change of Control occurs; or

(m) (i) Any Credit Card Issuer or Credit Card Processor shall send notice to any Obligor that it is ceasing to make orsuspending payments to such Obligor of amounts due or to become due to such Obligor or shall cease or suspend such payments, orshall send notice to such Obligor that it is terminating its arrangements with such Obligor or such arrangements shall terminate as aresult of any event of default under such arrangements, which continues for more than the applicable cure period, if any, with respectthereto, unless such Obligor shall have entered into arrangements with another Credit Card Issuer or Credit Card Processor, as the casemay be, within sixty (60) days after the date of any such notice or (ii) any Credit Card Issuer or Credit Card Processor withholdspayment of amounts otherwise payable to an Obligor to fund a reserve account or otherwise hold as collateral, or shall require anObligor to pay funds into a reserve account or for such Credit Card Issuer or Credit Card Processor to otherwise hold as collateral, orany Obligor shall provide a letter of credit, guarantee, indemnity or similar instrument to or in favor of such Credit Card Issuer or CreditCard Processors such that in the aggregate all of such funds in the reserve account, other than amounts held as collateral and the amountof such letters of credit, guarantees, indemnities or similar instruments shall exceed an amount equal to or exceeding ten percent (10%)of the Credit Card Receivables processed by such Credit Card Issuer or Credit Card Processor in the immediately preceding Fiscal Year.

11.2. Remedies  upon  Default. If an Event of Default described in Section  11.1(j) occurs, then to the extent permitted by Applicable Law, allObligations (other than Secured Bank Product Obligations) automatically shall become due and payable, all U.S. Revolver Commitments and CanadianCommitments shall terminate and the obligation of the Obligors to Cash Collateralize LC Obligations shall automatically become effective, in each case withoutany action by any Agent or notice of any kind. In addition, or if any other Event of Default exists, the Applicable Agent may in its discretion (and shall uponwritten direction of Required Lenders) do any one or more of the following from time to time:

(a) declare any Obligations (other than Secured Bank Product Obligations) immediately due and payable, whereuponthey shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived byBorrowers to the fullest extent permitted by law;

(b) terminate, reduce or condition any U.S. Revolver Commitment, Canadian Commitments or make any adjustment tothe U.S. Revolver Borrowing Base or the Canadian Borrowing Base;

(c) require Obligors to Cash Collateralize LC Obligations, Secured Bank Product Obligations and other Obligationsthat are contingent or not yet due and payable, and, if Obligors fail promptly to deposit such Cash Collateral, the Applicable Agent may(and shall upon the direction of Required Lenders) advance the required Cash Collateral as U.S. Revolver Loans or

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case may be (in an amount equal to the then applicable U.S. Dollar Equivalent amount of such participation) and such payment shall beconverted by the Administrative Agent at the exchange rate into the currency of the Loan or LC Obligation in which such participationis being purchased. The Borrowers agree to indemnify each Purchasing Lender for any loss, cost or expense incurred by suchPurchasing Lender as a result of any payment on account of such participation in a currency other than that funded by the PurchasingLender.

(d) Each Borrower expressly consents to the foregoing arrangements and agrees that any Person holding such aparticipation in the Obligations deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff orcounterclaim with respect to any and all moneys owing by such Borrower to such Person as fully as if such Person had made a Loandirectly to such Borrower in the amount of such participation.

14.20. Acknowledgement and Consent to Bail-In of EEAAffected Financial Institutions. Notwithstanding anything to the contrary in any LoanDocument or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lenderthat is an EEAAffected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down andconversion powers of an EEAthe applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEAthe applicable Resolution Authority to anysuch liabilities arising hereunder which may be payable to it by any Lender that is an EEAAffected Financial Institution;

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(c) a reduction in full or in part or cancellation of any such liability;

(d) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in suchEEAAffected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it,and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability underthis Agreement or any other Loan Document; or

(e) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powersof any EEAthe applicable Resolution Authority.

14.21. Intercreditor Agreement. Notwithstanding anything to the contrary in this Agreement or in any other Loan Document: (a) the Liens granted tothe applicable Agent in favor of the Secured Parties pursuant to the Loan Documents and the exercise of any right related to any Collateral shall be subject, ineach case, to the terms of the Intercreditor Agreement and (b) in the event of any conflict between the express terms and provisions of this Agreement or anyother Loan Document, on the one

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hand, and of the Intercreditor Agreement, on the other hand, the terms and provisions of such Intercreditor Agreement shall control.

14.22. NO ORAL AGREEMENT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENTBETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORALAGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

14.23. Acknowledgement  Regarding  Any  Supported  QFCs. To the extent that the Loan Documents provide support, through a guarantee orotherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “SupportedQFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the FederalDeposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder,the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding thatthe Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any otherstate of the United States), in the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under aU.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or undersuch Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such CoveredParty will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFCCredit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In theevent a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rightsunder the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party arepermitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC andthe Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood andagreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to aSupported QFC or any QFC Credit Support.

[Remainder of page intentionally left blank; signatures begin on following page]

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.

BORROWERS:

UNITED NATURAL FOODS, INC.

By:Name:Title:Address:

United Natural Foods, Inc.313 Iron Horse WayProvidence, RI 02908

Attn:Michael P. Zechmeister, Senior Vice President,Chief Financial Officer and Treasurer

Attn: Legal DepartmentEmail: Legal.Notices@unfi.comTelecopy: 877-566-8481With a copy to:United Natural Foods, Inc.700 N. Ancestor PlaceBoise, ID 83704Attn: Devon HartVice President & TreasurerEmail: mzechmeisterDevon.Hart@unfi.comWebsite: www.unfi.comUNITED NATURAL FOODS WEST, INC.

By: __________________________________________Name: ________________________________________Title: ________________________________________Address:

                                    

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United Natural Foods, Inc.313 Iron Horse WayProvidence, RI 02908

Attn:Michael P. Zechmeister, Senior Vice President,Chief Financial Officer and Treasurer

Attn: Legal DepartmentEmail: Legal.Notices@unfi.comTelecopy: 877-566-8481With a copy to:United Natural Foods, Inc.700 N. Ancestor PlaceBoise, ID 83704Attn: Devon HartVice President & TreasurerEmail: mzechmeisterDevon.Hart@unfi.comWebsite: www.unfi.comUNFI CANADA, INC.

By: __________________________________________Name: ________________________________________Title: ________________________________________Address:

United Natural Foods, Inc.313 Iron Horse WayProvidence, RI 02908

Attn:Michael P. Zechmeister, Senior Vice President,Chief Financial Officer and Treasurer

Attn: Legal DepartmentEmail: Legal.Notices@unfi.comTelecopy: 877-566-8481With a copy to:United Natural Foods, Inc.700 N. Ancestor PlaceBoise, ID 83704Attn: Devon HartVice President & TreasurerEmail: mzechmeisterDevon.Hart@unfi.com

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Website: www.unfi.com

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SCHEDULE 1.1(a)

COMMITMENTS OF LENDERS1

LenderU.S. RevolverCommitment

CanadianCommitment

U.S. Letter of CreditCommitment

Canadian Letter ofCredit Commitment

Commitment forSwingline Loans to

U.S. Borrowers

Commitment forSwingline Loans toCanadian Borrower

Bank of America, N.A. $341,250,000.00 --- $35,000,000.00 --- $100,000,000.00 ---Bank of America, N.A., acting through its CanadaBranch --- $8,750,000.00 --- $5,000,000.00 ---

$3,500,000.00

Well Fargo Bank, National Association $341,250,000.00 --- $35,000,000.00 --- --- ---Wells Fargo Capital Finance Corporation Canada --- $8,750,000.00 --- --- --- ---JPMorgan Chase Bank, N.A. $243,750,000.00 --- $25,000,000.00 --- --- ---JPMorgan Chase Bank, N.A., Toronto Branch --- $6,250,000.00 --- --- --- ---U.S. Bank National Association $243,750,000.00 --- $25,000,000.00 --- --- ---U.S. Bank National Association, acting through its --- $6,250,000.00 --- --- --- ---

1 All amounts are in U.S. Dollars.

Canada branch --- 00 ---Goldman Sachs Bank USA $48,750,000.00 $1,250,000.00 $5,000,000.00 --- --- ---Branch Banking and Trust Company $97,500,000.00 $2,500,000.00 --- --- --- ---BMO Harris Financing, Inc. $97,500,000.00 --- --- --- --- ---Bank of Montreal --- $2,500,000.00 --- --- --- ---Citizens Bank, N.A. $97,500,000.00 $2,500,000.00 --- --- --- ---TD Bank, N.A. $97,500,000.00 --- --- --- --- ---The Toronto-Dominion Bank --- $2,500,000.00 --- --- --- ---Royal Bank of Canada $78,000,000.00 $2,000,000.00 --- --- --- ---Credit Suisse AG, Cayman Islands Branch $48,750,000.00 $1,250,000.00 --- --- --- ---PNC Bank, National Association $48,750,000.00 --- --- --- --- ---PNC Bank Canada Branch --- $1,250,000.00 --- --- --- ---Capital One, National Association $48,750,000.00 $1,250,000.00 --- --- ---Farm Credit East, ACA $48,750,000.00 $1,250,000.00 --- --- --- ---Coöperatieve Rabobank U.A., New York Branch $48,750,000.00 $1,250,000.00 --- --- --- ---

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City National Bank $19,500,000.00 $500,000.00 --- --- --- ---Total: $1,950,000,000.00 $50,000,000.00 $125,000,000.00 $5,000,000.00 $100,000,000.00 $3,500,000.00

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SCHEDULE 1.1(c)

LETTER OF CREDIT COMMITMENTS3

Lender U.S. Letter of Credit Commitment Canadian Letter of Credit CommitmentBank of America, N.A. $81,250,000.00, minus the face amount of Canadian

Letters of Credit issued by Bank of America, N.A.,acting through its Canada Branch

---

Bank of America, N.A., acting through its Canada Branch --- $12,500,000.00Well Fargo Bank, National Association $81,250,000.00 ---JPMorgan Chase Bank, N.A. $60,000,000.00 ---U.S. Bank National Association $60,000,000.00, minus the face amount of Canadian

Letters of Credit issued by U.S. Bank NationalAssociation, acting through its Canada Branch

---

U.S. Bank National Association, acting through its Canada Branch --- $5,000,000.00Goldman Sachs Bank USA $10,000,000.00 ---TD Bank, N.A. $7,500,000.00, minus the face amount of Canadian

Letters of Credit issued by The Toronto-DominionBank

---

The Toronto-Dominion Bank --- $7,500,000.00Total: $300,000,000.00, minus the face amount of issued

Canadian Letters of Credit$25,000,000.00

3 All amounts are in U.S. Dollars.

Exhibit 10.41UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLANRESTRICTED SHARE UNIT AWARD AGREEMENT

[time vesting for employees]

This Restricted Share Unit Award Agreement (this “Agreement”) effective as of [ ] __, 20__ (the “Grant Date”), between United Natural Foods, Inc. (the“Company”) and __________________ (the “Participant”), evidences an Award denominated in Restricted Share Units to the Participant under the UnitedNatural Foods, Inc. 2020 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence and where the context otherwiserequires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are used in this Agreement withoutdefinition shall have the meanings set forth in the Plan.

1. Definitions.

(a) “Participant,” solely for the purpose of this Agreement, means the employee designated above. (b) “Restricted Share Unit” means a right to receive a payment in the form of any one Share of the Company’s common stock, par value $0.01 per share,subject to the terms and conditions set forth in this Agreement and in the Plan.

(c) “Vesting Period” means the period beginning on [ ] and ending on [ ].

2.    Grant of Restricted Share Units.  In consideration of services to be rendered by the Participant to the Company, the Company hereby grants to theParticipant [______] Restricted Share Units, on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. The grant ofRestricted Share Units shall be subject to adjustment as provided in Section 4.3 of the Plan. This grant is conditional upon the Participant signing a counterpartof this Agreement and delivering such signed counterpart to the Company within sixty (60) days of this Agreement, including by electronic means if providedby the Company pursuant to Section 18. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.

3.    Vesting.

(a) Except as otherwise provided herein or in the Plan, if the Participant remains continuously employed by the Company through the applicablevesting date, the Restricted Share Units will vest in accordance with the following schedule:

Vesting Date Restricted Share Units

[Vesting date] [Number or % of shares that vest on the vesting date]

[Vesting date] [Number or % of shares that vest on the vesting date]

[Vesting date] [Number or % of shares that vest on the vesting date]

1

(b) In the event the Participant terminates employment on account of Retirement in the year the Award is granted, the Pro-Rated Number of Restricted ShareUnits will continue to vest through the Vesting Period. The “Pro-Rated Number” shall be the product of (i) the total number of Restricted Share Units grantedunder this Agreement and (ii) the quotient of (A) the number of days beginning with the first day of the Vesting Period and ending on the date the Participant’semployment is terminated as a result of Retirement and (B) 365, the number of days in the one-year service period. In the event that the Participant terminatesemployment on account of Retirement before the end of the Vesting Period but after the year the Award is granted, all of the then-unvested Restricted ShareUnits granted under this Agreement will continue to vest through the Vesting Period. The rights of the Participant in the event of Retirement with respect to anythen-unvested Restricted Share Units shall become non-forfeitable only at such time as the Shares issuable in settlement of such Restricted Stock Units wouldhave been issued pursuant to Section 4 hereof had the Participant continued to be employed through the end of the Vesting Period.

(c) In the event that the Participant dies or terminates employment on account of Disability at any time after grant, all of the then-unvested RestrictedShare Units shall fully vest.

(d) In the event the Participant’s employment with the Company or any successor to the Company is terminated without Cause, or the Participantterminates his or her employment for Good Reason, within twelve months after a Change in Control (and before the Restricted Share Units otherwise havebecome vested under Section 3(a), (b) or (c)), the Participant shall vest in all of the Restricted Share Units granted under Section 2 of this Agreement and theParticipant’s rights to such Restricted Share Units shall become non-forfeitable as of the date on which the Participant’s employment with the Company or itssuccessor is terminated. In the event that this Award is not assumed by the Acquiror in connection with a Change in Control, all of the Restricted Share Unitsshall vest immediately prior to the Change in Control and shall settle immediately following the Change in Control (notwithstanding the longer period of timefor settlement provided in Section 4 below). In the event that settlement of the Restricted Share Units at the time described above would result in the impositionof tax on the Participant (if the Participant is eligible for Retirement) pursuant to the operation of Code Section 409A (as defined below), such settlement shalltake place on the earliest date upon which settlement may be made without resulting in the imposition of such tax.

(e) Except as provided in Section 3(b),(c) or (d) above or as otherwise provided in any written agreement by and between the Company and theParticipant, if the Participant’s employment with the Company terminates for any reason prior to the expiration of the Vesting Period, all then-unvestedRestricted Share Units shall be canceled immediately and shall not be payable to the Participant.

4.    Payment. The Company shall issue to the Participant one Share for each Restricted Share Unit which has become vested with respect to the vestingschedule pursuant to Section 3 of this Agreement. The payment of the Shares shall be made to the Participant (or the Participant’s assignee or beneficiary ifpermitted by the Plan or the Committee) in accordance with the Company’s grant and award policy no later than March 15th of the calendar year next followingthe calendar year in which the vesting period ends and may be made as a book-entry confirmation or through the issuance of a certificate evidencing suchShares; provided, however, that if the Participant is eligible for Retirement at any point during the Vesting Period, payment of the Shares shall be made as soonas practicable following the applicable vesting date set forth in Section 3, but in no event later than December 31 of the calendar year in which such vesting dateoccurs.

5.    Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon the vesting ofthe Restricted Share Units (including, without

2

limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Shares have been issued toParticipant. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

6.    Withholding. The Company’s obligation to make payment of vested Restricted Share Units shall be subject to the Participant’s satisfaction of anyapplicable federal, state, local and foreign withholding obligations or withholding taxes, including any employer minimum statutory withholding (“WithholdingTaxes”), and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 6. The Participant may satisfy hisor her obligation to pay the Withholding Taxes by (i) having the Company withhold Shares otherwise deliverable to the Participant pursuant to settlement ofvested Restricted Share Units; or (ii) delivering, actually or by attestation, to the Company shares of Common Stock already owned by the Participant; providedthat the amount of such Shares withheld or shares of Common Stock delivered (with the value of such Shares being based on the Fair Market Value of a Shareof the Company’s Common Stock as of the payment date as determined by the Committee) shall not exceed the amount necessary to satisfy the minimumamount of Withholding Taxes. The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing tothe Participant an amount not to exceed the Withholding Taxes.

7.    Covenants. As a condition to the receipt of the Award (which shall be forfeited in the event of noncompliance with this Section 7), the Participanthereby agrees to adhere to the covenants set forth in Section 14.8 of the Plan, which include confidentiality, non-competition and non-solicitation covenants.

8.    No Guarantee of Employment.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ ofthe Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at anytime for any reason whatsoever, with or without Cause.

9.    Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of oralter, suspend, discontinue, cancel or terminate, this Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance withSection 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance,cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shallnot to that extent be effective without the consent of the Participant, holder or beneficiary; and provided further that no consent of the Participant or any holderor beneficiary shall be required for any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination to the extent necessary toconform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section409A of the Code necessary to avoid tax penalties to the Participant. The Committee is authorized to make equitable and proportionate adjustments in the termsand conditions of, and the criteria included in, this Agreement and the Restricted Share Units as set forth in the Plan.

10.        Determinations  by the Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, andother decisions under or with respect to the Plan or this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall befinal, conclusive, and binding upon all Persons.

11.    Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with this Agreement and agrees to be bound by all theterms and provisions of the Plan. This Agreement is

3

governed by the terms of the Plan, and in the case of any inconsistency between this Agreement and the terms of the Plan, the terms of the Plan shall govern.This Agreement, read together with the Plan, represents the entire understanding and agreement between the Company and the Participant, and shall supersedeany prior agreement and understanding between the parties with respect to the matters contained herein. This Agreement, and any payment of Shares insettlement of the Restricted Share Units, shall be subject to any policy of the Company regarding the recoupment or clawback of compensation as in effect at thedate of this Agreement or hereafter adopted by the Board.

12.    Nontransferability of Restricted Share Units. Except as otherwise provided in the Plan, the Restricted Share Units and this Agreement shall notbe assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell orotherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Agreement shall, at the election of the Company, benull and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Agreement.

13.    Notices. Any notice required or permitted to be given to the Participant under this Agreement shall be in writing and shall be deemed effectiveupon personal delivery or upon deposit in the United States mail with postage and fees prepaid. Any notice or communication required or permitted to be givento the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’sprincipal office.

14.    Waiver. The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be awaiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

15.    Section 409A.

(a) For the avoidance of doubt, the Restricted Share Units granted under this Agreement are intended to be exempt from or otherwise comply withSection 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximumextent permitted, this Agreement shall be interpreted to be either exempt from or in compliance therewith. In no event whatsoever shall the Company be liablefor any additional tax, interest or penalty that may be imposed on the Participant by Code Section 409A or damages for failing to comply with Code Section409A.

(b) Notwithstanding any other payment schedule provided herein to the contrary, if the Participant is deemed on the date of termination to be a“specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any payment due under this Agreement that is considered“deferred compensation” under Section 409A of the Code payable on account of a Participant’s “separation from service” shall not be made until the date whichis the earlier of (A) the expiration of the six (6) month period measured from the date of such “separation from service” of the Participant, and (B) the date ofParticipant’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayedpursuant to this Section 15(b) shall be paid to the Participant in a lump sum in accordance with the Agreement.

(c) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of“deferred compensation” (as such term is defined in Code Section 409A) upon or following a termination of employment unless such termination is also a“separation from service” from the Company within the meaning of Code Section 409A (and, more specifically, Treasury Regulation 1.409A-1(h)) and, forpurposes of any such provision of this Agreement,

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references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(d) For the avoidance of doubt, any payment due under this Agreement within a period following Participant’s termination of employment, death,Disability, Retirement or other event, shall be made on a date during such period as determined by the Company in its sole discretion.

16.    Governing Law. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delawarewithout giving effect to conflicts of laws principles.

17.    Successors. This Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of theParticipant's legal representative. All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be bindingupon the Participant's heirs, executors, administrator and successors.

18.    Electronic Communication. The Company may, in its sole discretion, decide to deliver any document related to current or future participation inthe Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through anonline or electronic system established and maintained by the Company or a third party designated by the Company.

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has acceptedand signed this Agreement, all on the day and year first mentioned above.

UNITED NATURAL FOODS,INC.

By: __________________________

PARTICIPANT

______________________________

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Exhibit 10.42UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLANPERFORMANCE-BASED VESTING

RESTRICTED SHARE UNIT AWARD AGREEMENT

[cliff-vesting for employees]

This Performance-Based Vesting Restricted Share Unit Award Agreement (this “Agreement”) effective as of [ ] __, 20__, between United NaturalFoods, Inc. (the “Company”) and __________________ (the “Participant”), evidences a Performance Award denominated in Restricted Share Units to theParticipant under the United Natural Foods, Inc. 2020 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence andwhere the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are usedin this Agreement without definition shall have the meanings set forth in the Plan.

1. Definitions.

(a) “Participant,” solely for the purpose of this Agreement, means the employee designated above.

(b) “Performance Criteria” means the performance targets related to one or more performance goals set forth on Exhibit A hereto.

(c) “Performance Period” means the period beginning on [ ] and ending on [ ].

(d) “Restricted Share Unit” means a right to receive a payment in the form of any one Share of the Company’s common stock, par value $0.01 pershare, subject to the terms and conditions set forth in this Agreement and in the Plan, following the successful attainment of the Performance Criteria to thesatisfaction of the Committee.

2.     Grant of Restricted Share Units.  In consideration of services to be rendered by the Participant to the Company, the Company hereby grants tothe Participant, subject to the terms and conditions set forth in this Agreement and in the Plan, [______] Restricted Share Units (the “Target Amount”). TheTarget Amount shall be subject to adjustment as provided in Section 4.3 of the Plan. This grant is conditional upon the Participant signing a counterpart of thisAgreement and delivering such signed counterpart to the Company within sixty (60) days of this Agreement.

3.    Vesting.

(a) Exhibit A hereto identifies the Performance Criteria and the levels of performance that must be achieved in order to receive payment of Shares atthe percentage of the Target Amount specified in Exhibit A, based on achievement of the Performance Criteria, as determined in accordance with thisAgreement and the Plan. The percentage of the Target Amount based on actual achievement of the Performance Criteria as of the last day of the PerformancePeriod is referred to herein as the “Earned Amount.” Except as otherwise provided herein or in the Plan, if the Participant remains continuously employed bythe Company throughout the Performance Period, the Participant will vest in the Earned

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Amount, and any amount in excess of the Earned Amount will be forfeited. Prior to the issuance of any Shares in settlement of any Restricted Share Units, theCommittee shall determine and certify in writing (which may be set forth in the minutes of a meeting of the Committee) the extent to which the PerformanceCriteria and all other material terms of this Agreement have been met. In making such determination, the Committee shall have the right to adjust the number ofShares payable at a given level of performance totake into account additional factors that the Committee may deem relevant in its sole discretion to theassessment of individual or corporate performance.

(b) In the event the Participant terminates employment on account of Retirement in the year the Award is granted, the Pro-Rated Number of RestrictedShare Units will vest at the end of the Performance Period. The “Pro-Rated Number” shall be the product of (i) the Earned Amount that the Participant wouldhave earned had he or she not terminated employment on account of Retirement and (ii) the quotient of (A) the number of days beginning with the first day ofthe Performance Period and ending on the date the Participant’s employment is terminated as a result of Retirement and (B) 365, the number of days in the one-year service period (and, for the avoidance of doubt, no additional Restricted Share Units in which the Participant may have been entitled to vest in accordancewith the Performance Criteria shall vest). In the event that the Participant terminates employment on account of Retirement before the end of the PerformancePeriod but after the year the Award is granted, or in the event that the Participant dies or terminates employment on account of Disability at any time after grantthen, at the conclusion of the Performance Period, the Participant (or the Participant’s estate or beneficiaries in the event of Participant’s death) will vest in theEarned Amount that the Participant would have earned had had his or her employment continued through the end of the Performance Period. The rights of theParticipant (or the Participant’s estate or beneficiaries in the event of Participant’s death) in any event described in this Section 3(b) shall become non-forfeitableonly at such time as the Shares issuable in settlement of such Restricted Stock Units would have been issued pursuant to Section 4 hereof had the Participantcontinued to be employed through the end of the Performance Period. .

(c) In the event this Award is assumed in connection with a Change in Control, the Committee shall make such adjustments to the PerformanceCriteria as are necessary to equitably account for the Change in Control. In the event the Participant’s employment with the Company or any successor to theCompany is terminated without Cause, or the Participant terminates his or her employment for Good Reason, within twelve months after a Change in Control(and before the Restricted Share Units otherwise have become vested under Section 3(a) or (b)), the Participant shall vest in the Restricted Share Units at theTarget Amount granted under Section 2 of this Agreement and the Participant’s rights to such vested amount of Restricted Share Units shall become non-forfeitable as of the date on which the Participant’s employment with the Company or its successor is terminated. In the event that this Award is not assumed bythe Acquiror in connection with a Change in Control, the Participant shall vest in the Restricted Share Units at the Target Amount immediately prior to theChange in Control and shall settle immediately following the Change in Control (notwithstanding the longer period of time for settlement provided in Section 4below).

(d) Except as provided in Section 3(b) or (c) above or as otherwise provided in any written agreement by and between the Company and theParticipant, if the Participant’s employment with the Company terminates for any reason prior to the expiration of the Performance Period, all then-unvestedRestricted Share Units shall be canceled immediately and shall not be payable to the Participant.

(e) In case of any conflict between the terms of this Section 3 and any written employment agreement between the Company and the Participant, theterms of such written employment agreement shall control.

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4.        Payment. The Company shall issue to the Participant one Share for each Restricted Share Unit which has become vested with respect to thePerformance Period pursuant to Section 3 of this Agreement. The payment of the Shares shall be made to the Participant (or the Participant’s assignee orbeneficiary if permitted by the Plan or the Committee) in accordance with the Company’s grant and award policy no later than March 15th of the calendar yearnext following the calendar year in which the Performance Period ends and may be made as a book-entry confirmation or through the issuance of a certificateevidencing such Shares.

5.    Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon the vesting ofthe Restricted Share Units (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares)unless and until the Shares have been issued to Participant. No adjustment shall be made for dividends or other rights for which the record date is prior to thedate such Shares are issued.

6.    Withholding. The Company’s obligation to make payment of vested Restricted Share Units shall be subject to the Participant’s satisfaction of anyapplicable federal, state, local and foreign withholding obligations or withholding taxes, including any employer minimum statutory withholding (“WithholdingTaxes”), and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 6. The Participant may satisfy hisor her obligation to pay the Withholding Taxes by (i) having the Company withhold Shares otherwise deliverable to the Participant pursuant to settlement ofvested Restricted Share Units; or (ii) delivering, actually or by attestation, to the Company shares of Common Stock already owned by the Participant; providedthat the amount of such Shares withheld or shares of Common Stock delivered (with the value of such Shares being based on the Fair Market Value of a Shareof the Company’s Common Stock as of the payment date as determined by the Committee) shall not exceed the amount necessary to satisfy the minimumamount of Withholding Taxes. The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing tothe Participant an amount not to exceed the Withholding Taxes.

7.    Covenants. As a condition to the receipt of the Award (which shall be forfeited in the event of noncompliance with this Section 7 ), the Participanthereby agrees to adhere to the covenants set forth in Section 14.8 of the Plan, which include confidentiality, non-competition and non-solicitation covenants.

8.    No Guarantee of Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ ofthe Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at anytime for any reason whatsoever, with or without Cause.

9.    Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of oralter, suspend, discontinue, cancel or terminate, this Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance withSection 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance,cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shallnot to that extent be effective without the consent of the Participant, holder or beneficiary; and provided further that no consent of the Participant or any holderor beneficiary shall be required for any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination to the extent necessary toconform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section409A of the Code necessary to avoid tax penalties to the Participant. The Committee is authorized to make equitable and proportionate adjustments in the terms

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and conditions of, and the criteria included in, this Agreement and the Restricted Share Units as set forth in the Plan.

10.        Determinations  by the Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, andother decisions under or with respect to the Plan or this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall befinal, conclusive, and binding upon all Persons.

11.    Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with this Agreement and agrees to be bound by all theterms and provisions of the Plan. This Agreement is governed by the terms of the Plan, and in the case of any inconsistency between this Agreement and theterms of the Plan, the terms of the Plan shall govern. This Agreement, read together with the Plan, represents the entire understanding and agreement betweenthe Company and the Participant, and shall supersede any prior agreement and understanding between the parties with respect to the matters contained herein.This Agreement, and any payment of Shares in settlement of the Restricted Share Units, shall be subject to any policy of the Company regarding the recoupmentor clawback of compensation as in effect at the date of this Agreement or hereafter adopted by the Board.

12.    Nontransferability of Restricted Share Units. Except as otherwise provided in the Plan, the Restricted Share Units and this Agreement shall notbe assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell orotherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Agreement shall, at the election of the Company, benull and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Agreement.

13.    Notices. Any notice required or permitted to be given to the Participant under this Agreement shall be in writing and shall be deemed effectiveupon personal delivery or upon deposit in the United States mail with postage and fees prepaid. Any notice or communication required or permitted to be givento the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’sprincipal office.

14.    Waiver. The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be awaiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

15.    Section 409A.

(a) For the avoidance of doubt, the Restricted Share Units granted under this Agreement are intended to be exempt from or otherwise comply withSection 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximumextent permitted, this Agreement shall be interpreted to be either exempt from or in compliance therewith. In no event whatsoever shall the Company be liablefor any additional tax, interest or penalty that may be imposed on the Participant by Code Section 409A or damages for failing to comply with Code Section409A.

(b) Notwithstanding any other payment schedule provided herein to the contrary, if the Participant is deemed on the date of termination to be a“specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any payment due under this Agreement that is considered“deferred compensation” under Section 409A of the Code payable on account of a Participant’s “separation from service” shall not be made until the date whichis the earlier of (A) the expiration of the

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six (6) month period measured from the date of such “separation from service” of the Participant, and (B) the date of Participant’s death (the “Delay Period”) tothe extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 15(b) shall be paid to theParticipant in a lump sum in accordance with the Agreement.

(c) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of“deferred compensation” (as such term is defined in Code Section 409A) upon or following a termination of employment unless such termination is also a“separation from service” from the Company within the meaning of Code Section 409A (and, more specifically, Treasury Regulation 1.409A-1(h)) and, forpurposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation fromservice.”

(d) For the avoidance of doubt, any payment due under this Agreement within a period following the Participant’s termination of employment, death,Disability, Retirement or other event, shall be made on a date during such period as determined by the Company in its sole discretion.

16.    Governing Law. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delawarewithout giving effect to conflicts of laws principles.

17.    Successors. This Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of theParticipant's legal representative. All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be bindingupon the Participant's heirs, executors, administrator and successors.

18.    Electronic Communication. The Company may, in its sole discretion, decide to deliver any document related to current or future participation inthe Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through anonline or electronic system established and maintained by the Company or a third-party designated by the Company.

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has acceptedand signed this Agreement, all on the day and year first mentioned above.

UNITED NATURAL FOODS, INC.

By: __________________________

PARTICIPANT

______________________________

6

EXHIBIT APerformance criteria and levels required to be achieved for payout;

payout percentage of Target Amount

[TO BE DETERMINED ON OR PRIOR TO GRANT]

7

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

NAME

JURISDICTION OF

INCORPORATION/FORMATION

Advantage Logistics - Southeast, Inc. AlabamaAdvantage Logistics Southwest, Inc. ArizonaAdvantage Logistics USA East L.L.C. DelawareAdvantage Logistics USA West L.L.C. DelawareAlbert’s Organics, Inc. CaliforniaAmerican Commerce Centers, Inc. FloridaArden Hills 2003 LLC DelawareAssociated Grocers Acquisition Company FloridaAssociated Grocers of Florida, Inc. FloridaBillings Distribution Company, LLC DelawareBismarck Distribution Company, LLC DelawareBlaine North 1996 L.L.C. DelawareBloomington 1998 L.L.C. DelawareBlue Marble Brands, LLC DelawareBlue Nile Advertising, Inc. FloridaBurnsville 1998 L.L.C. DelawareButson Enterprises of Vermont, Inc. VermontButson's Enterprises of Massachusetts, Inc. MassachusettsButson's Enterprises, Inc. New HampshireCambridge 2006 L.L.C. DelawareCentralia Holdings, LLC DelawareChampaign Distribution Company, LLC DelawareChamplin 2005 L.L.C. DelawareCoon Rapids 2002 L.L.C. DelawareCrown Grocers, Inc. CaliforniaCub Foods, Inc. DelawareCub Stores, LLC DelawareCub Stores Holdings, LLC DelawareDS & DJ Realty, LLC FloridaEagan 2008 L.L.C. DelawareEagan 2014 L.L.C. DelawareEastern Beverages, Inc. MarylandEastern Region Management Corporation VirginiaFargo Distribution Company, LLC DelawareFF Acquisition, L.L.C. VirginiaFoodarama LLC DelawareForest Lake 2000 L.L.C. DelawareFridley 1998 L.L.C. DelawareFromage De France, Inc. CaliforniaGourmet Guru, Inc. CaliforniaGrocers Capital Company CaliforniaHastings 2002 L.L.C. DelawareHazelwood Distribution Company, Inc. DelawareHazelwood Distribution Holdings, Inc. DelawareHopkins Distribution Company, LLC Delaware

NAME

JURISDICTION OF

INCORPORATION/FORMATION

Hornbacher’s, Inc. DelawareInternational Distributors Grand Bahama Limited BahamaInver Grove Heights 2001 L.L.C. DelawareKeatherly, Inc. New HampshireKeltsch Bros., Inc. IndianaLakeville 2014 L.L.C. DelawareLithia Springs Holdings, LLC GeorgiaMaplewood East 1996 L.L.C. DelawareMarket Improvement Company FloridaMonticello 1998 L.L.C. DelawareNAFTA Industries Consolidated, Inc. TexasNAFTA Industries, Ltd. TexasNatural Retail Group, Inc. DelawareNC & T Supermarkets, Inc. OhioNevada Bond Investment Corp. NevadaNor-Cal Produce, Inc. CaliforniaNorthfield 2002 L.L.C. DelawareOglesby Distribution Company, LLC DelawarePlymouth 1998 L.L.C. DelawareSavage 2002 L.L.C. DelawareSCTC, LLC FloridaSFW Holding Corp. DelawareShakopee 1997 L.L.C. DelawareShop ‘N Save East, LLC DelawareShop ‘N Save East Prop, LLC DelawareShop ‘N Save Prop, LLC DelawareShop 'N Save St. Louis, Inc. MissouriShop 'N Save Warehouse Foods, Inc. MissouriShoppers Food Warehouse Corp. OhioShorewood 2001 L.L.C. DelawareSilver Lake 1996 L.L.C. DelawareSouthstar LLC DelawareStevens Point Distribution Company, LLC DelawareSunflower Markets, LLC DelawareSuper Rite Foods, Inc. DelawareSUPERVALU Enterprise Services, Inc. DelawareSUPERVALU Enterprises, Inc. DelawareSUPERVALU Holdco, Inc. DelawareSUPERVALU Holdings, Inc. MissouriSUPERVALU Holdings - PA LLC PennsylvaniaSUPERVALU Gold, LLC DelawareSUPERVALU INC. DelawareSUPERVALU India, Inc. MinnesotaSUPERVALU Licensing, LLC DelawareSUPERVALU Merger Sub, Inc. DelawareSUPERVALU Pharmacies, Inc. MinnesotaSUPERVALU Penn, LLC PennsylvaniaSUPERVALU Receivables Funding Corporation Delaware

NAME

JURISDICTION OF

INCORPORATION/FORMATION

SUPERVALU Services USA, Inc. MinnesotaSUPERVALU Transportation, Inc. MinnesotaSUPERVALU TTSJ, LLC DelawareSUPERVALU WA, L.L.C. DelawareSUPERVALU Wholesale, Inc. DelawareSUPERVALU Wholesale Holdings, Inc. DelawareSUPERVALU Wholesale Operations, Inc. DelawareSV Markets, Inc. OhioSVU Legacy, LLC DelawareTC Michigan LLC MichiganTony’s Fine Foods CaliforniaTTSJ Aviation, Inc. DelawareTutto Pronte CaliforniaUltra Foods, Inc. New JerseyUNFI Canada, Inc. CanadaUNFI Transport, LLC DelawareUnified Grocers, Inc. CaliforniaUnified International, Inc. DelawareUnited Natural Foods West, Inc. CaliforniaUnited Natural Trading, LLC DelawareW. Newell & Co., LLC DelawareWetterau Insurance Co. Ltd. BermudaWoodford Square Associates LP VirginiaWSI Satellite, Inc. Missouri

Exhibit 23.1Consent of Independent Registered Public Accounting Firm

The Board of DirectorsUnited Natural Foods, Inc.:

We consent to the incorporation by reference in the registration statement (No. 333-230570) on Form S-3 and (Nos. 333-235583, 333-227918, 333-208695, 333-161845, 333-222257, 333-106217, 333-123462, and 333-185637) on Form S-8 of United Natural Foods, Inc. of our report dated September 29, 2020, with respect tothe consolidated balance sheets of United Natural Foods, Inc. and subsidiaries as of August 1, 2020 and August 3, 2019, and the related consolidated statements ofoperations, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended August 1, 2020, and the related notes(collectively the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of August 1, 2020, which report appears in theAugust 1, 2020 annual report on Form 10-K of United Natural Foods, Inc.

Our report on the consolidated financial statements refers to a change in the method of accounting for leases.

/s/ KPMG LLP

Providence, Rhode IslandSeptember 29, 2020

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven L. Spinner, certify that:

1. I have reviewed this annual report on Form 10-K of United Natural Foods, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of

the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of

operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)

and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material

information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in whichthis report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant'sfourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financialreporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and theaudit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect

the registrant's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: September 29, 2020

/s/ STEVEN L. SPINNER

Steven L. SpinnerChief Executive Officer

Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission orits staff upon request.

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John W. Howard, certify that:

1. I have reviewed this annual report on Form 10-K of United Natural Foods, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of

the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of

operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)

and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material

information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in whichthis report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant'sfourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financialreporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and theaudit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect

the registrant's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: September 29, 2020

/s/ JOHN W. HOWARD

John W. HowardChief Financial Officer

Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission orits staff upon request.

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Executive Officer of United Natural Foods, Inc., a Delaware corporation (the "Company"), hereby certifies that the Annual Report ofthe Company on Form 10-K for the fiscal year ended August 1, 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that theinformation contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ STEVEN L. SPINNER

Steven L. SpinnerChief Executive Officer

September 29, 2020

Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission orits staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Financial Officer of United Natural Foods, Inc., a Delaware corporation (the "Company"), hereby certifies that the Annual Report ofthe Company on Form 10-K for the fiscal year ended August 1, 2020 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that theinformation contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JOHN W. HOWARD

John W. HowardChief Financial Officer

September 29, 2020

Note: A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission orits staff upon request.