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Here is breaking news about Cub Foods and Jerry's franchise intentions of opening up temporary structures at the East Lake Street and West Broadway Cub Foods locations. The East Lake Street location is expected to open on July 8. Our union members will be staffing the temporary stores. A Star Tribune article came out late last night announcing the structures. Here is the link and I have cut and paste the article below for you to read.
As always, I am committed to keeping you up to date with what is happening with our work. Feel free to reach out to me at 612-965-4307 with any questions that you have. Please stay safe.
Matt Utecht, President, UFCW Local 663
Cub rebuilding damaged stores on Lake, Broadway; being spun off into stand-alone unit
Temporary buildings will go up at damaged sites to sell fresh food, supplies and pharmacy goods.
By John Ewoldt Star Tribune JUNE 25, 2020 — 11:55PM
Cub still maintains the No. 1 market share in the Twin Cities. Its stores on Lake Street and Broadway Avenue were damaged during recent unrest.
The Cub Foods stores on Lake Street and Broadway Avenue, both damaged in the violence that followed the killing of George Floyd in Minneapolis police custody, will be rebuilt by the end of the year.
But starting July 8 on Lake Street and later in the month on Broadway, temporary structures in the parking lots will sell fresh produce, meat, dairy and dry goods, Cub Foods and franchisee Jerry’s Foods were to announce on Friday. They also will include pharmacies.
“The thought all along was to rebuild,” said Mike Stigers, chief executive of Cub. “We were never going to abandon our communities.”
Both stores closed on May 28, three days after Floyd’s death.
Stigers also confirmed that owner United Natural Foods Inc. (UNFI) plans to spin off the Cub and Shoppers supermarket chains into a stand-alone unit.
COVID-19 pandemic complicated plans to sell the two chains.
UNFI officials said in a conference call earlier this month that the company would not sell the chains for two years.
Because of the plan to sell the chain, some had speculated that Rhode Island-based UNFI might not rebuild the Minneapolis stores.
Stigers, though, said Thursday that UNFI “wants Cub to be the best it can be” to make it an attractive asset for potential buyers.
“In fiscal 2021-2022 we’ll have remodels and potential new sites,” said Stigers, although he wouldn’t say how many new stores. He said he expects four to six locations to be remodeled per year.
“With the spinoff we can separate from UNFI systems and technology. With less dependency, we’ll be doing more on our own as a stand-alone in the future,” said Stigers.
The transition could take up to a year, he said.
UNFI executives made clear when they purchased Supervalu for $2.9 billion in 2018 that the company prefers to focus on the wholesale side of the business over retail.
Sales at the Cub stores have stayed strong after the sale and especially since the pandemic spread in the United States.
Cub still maintains the No. 1 market share in the Twin Cities, and its market share has even started to rebound in the last year as Hy-Vee, Aldi, Target and Costco nip at its heels, according to Nielsen.
“We’re pleased with the cash being generated by Cub and happy to have the flexibility to sell Cub’s owned real estate at a more advantageous time,” said UNFI Chief Financial Officer John Howard during a conference call this month.
Cub operates 78 stores in Minnesota and one in Illinois. Shoppers has 24 stores mostly in the Washington, D.C., area.
Renovations on the Lake Street store should be completed by the end of the year. The Broadway store will likely reopen by early October, Stigers said.
The temporary structures will be 13,000 square feet, significantly smaller than the permanent structures, will be heated or cooled depending on the weather and will include a service desk. Curbside pickup will be available as well.
To help residents facing a food desert with stores such as Cub, Target and Aldi still closed after extensive damage, Cub will launch free, dedicated bus service at each location starting on Friday. Social distancing precautions will be taken.
At the 2850 S. 26th Av. location (just off Lake Street), buses will pick up shoppers and take them to the Quarry store at 1540 New Brighton Blvd.
Buses at the Broadway location will take customers to the Crystal store at 5301 N. 36th Av. Hours are from 10 a.m. to 6 p.m.
The Aldi store in the former Rainbow Foods on 26th Avenue will reopen in September, a company spokesperson said.
John Ewoldt is a business reporter for the Star Tribune. He writes about small and large retailers including supermarkets, restaurants, consumer issues and trends, and personal finance. firstname.lastname@example.org 612-673-7633
Here is breaking news about UNFI delaying the sale of Cub Foods yet again. The article states, "UNFI Chairman and CEO Steven Spinner said plans now call for Cub and Shoppers to be split from the company into their own operating unit, and the sale of the stores won’t be for another 24 months." The news came from supermarketnews.com and here is the link to the article, and I have reprinted it below.
You can also find links to previous news items below this message that I have sent out to you and other affected members. Remember, I am committed to keeping you up to date with news as it happens about Cub Foods. As always, please contact me with any questions that you have. Please stay safe.
Matt Utecht, President, UFCW Local 663
Cub Foods, Shoppers stores to be spun off from UNFI
Legacy Supervalu retail businesses to become freestanding entity
Russell Redman 1 | Jun 10, 2020
United Natural Foods Inc. (UNFI) plans to spin off its Cub Foods and Shoppers supermarkets as a stand-alone unit, following a decision to hold off on the pending sale of the stores amid the coronavirus crisis.
UNFI picked up Cub Foods and Shoppers with its $2.9 billion acquisition of Supervalu, which closed in October 2018. Supervalu already had been divesting its retail grocery stores, and the process continued under UNFI as the two companies integrated. Last month, however, UNFI said it would put the sale of the chains on hold for 12 to 18 months so the stores could continue providing customers with groceries during the COVID-19 pandemic.
In a conference call with analysts on Wednesday, UNFI Chairman and CEO Steven Spinner said plans now call for Cub and Shoppers to be split from the company into their own operating unit, and the sale of the stores won’t be for another 24 months.
“Last month, given the state of the M&A markets, I said we’ll likely be running some Shoppers stores for an additional period of time and that same thinking applies to Cub. As an interim step, we’re in the process of separating Cub from UNFI, which means Cub will operate more as a freestanding entity than it does today, with its own dedicated resources once the separation is complete,” Spinner said in the call.
“Historically, we’ve supported Cub with shared resources that include associates splitting their time between Cub and other parts of the business. This should accelerate the diligence period and allow for a more streamlined process as we market these banners for sale. We’ve also decided to take a pause on the sale-leaseback of Cub’s owned properties,” he explained. “To maximize the value of the banner, including its owned real estate, we’ve pushed these potential transactions 24 or so months into the future.”
Shoppers currently operates 24 stores, mainly in the Washington, D.C., area. Plans call for Cub and Shoppers to shift from UNFI’s discontinued to continuing operations starting in the fourth quarter.
Currently, Cub’s retail network encompasses 52 wholly or majority-owned stores and 27 franchised or minority-owned stores in Minnesota, primarily in the Twin Cities market, and Illinois (one store). As of the end of UNFI’s fiscal 2020 third quarter on May 2, Shoppers had 24 stores, mainly in the Washington, D.C., area. Plans call for Cub and Shoppers to shift from UNFI’s discontinued to continuing operations starting in the fourth quarter. Combined sales are about $2 billion.
“The results reported in discontinued operations will only be for stores that have previously been disposed of or which we currently expect will be disposed of in the near future. What moves to continuing operations is the entire Cub banner, as well as those Shoppers stores that will run for up to 24 months,” UNFI Chief Financial Officer John Howard told analysts in the call, adding that the company will change the way it reports net sales. “Since we acquired Supervalu and its retail operations, we’ve only included wholesale sales to Cub as part of net sales. This was because our intention has always been to sell Cub with a supply agreement. In the fourth quarter, we will recast prior periods, whereby the wholesale sales to Cub and certain Shoppers [stores] will be eliminated. On a consolidated basis, we will now report the retail sales from these stores. The estimated impact of this change will increase [UNFI’s] total annual sales for fiscal 2020 by approximately $1.2 billion.”
According to Spinner, it could take up to a year for Cub/Shoppers to become a freestanding operation.
“We have a handful of Shoppers stores that have yet to be sold, but they will be sold. We’re just finishing up some of the work to do so. The rest of them will be kept and the operated underneath Cub. So Cub will actually provide the infrastructure,” he said. “We’re in the process of separating retail entirely from UNFI. Right now, it’s complicated, and we think it’s probably going to take a better part of nine to 12 months to fully separate the two companies.”
Responding to an analyst’s question, Spinner said investment in the stores will continue, including remodels and systems.
“We certainly have a cadence of store renovations that we will continue to do. We’re also investing in technology to update their platform, to give them better access to data, among other things,” he said. “So there is some nominal spending that’s going to take place in retail, certainly over the next two years until we sell it.”
Though the retail M&A environment has been poor, Spinner said, the strong performance of Cub and Shoppers and the stores’ value to customers during the pandemic played a key role in postponing their divestiture.
“When you look at the results of our retail banners, our teams have just done spectacular work. They’re an important part of the communities. The communities rely on them. They’re doing really well,” he told analysts. “We don’t want to own retail forever; we’ve said that publicly. But we just don’t feel like it’s the best interests of our shareholders — it’s just not the right time to do it. We’ll wait until there’s stability in the market and there’s demand for really healthy retailers, in the case of Cub, with No. 1 market share. Now, it’s not the right time to disturb the communities and everything that’s going on with the retailing of food.”
Most recently, in December, Lidl US agreed to acquire six Shoppers stores from UNFI, including five in Maryland and one in Virginia. That deal came just days after UNFI announced the sale of 13 of its then 43 Shoppers stores to three retail grocery operators.
I want to pass along to you today’s news that UNFI is putting the sale of Cub Foods on hold for 12 to 18 months. The news came from Supermarketnews.com and here is the link to the article, and I have reprinted it below.
I am committed to keeping you up to date with news as it happens about Cub Foods. As always, please feel free to contact me with any questions you have.
Matt Utecht, President, UFCW Local 663
UNFI CEO: Recession, new consumer habits could last 24 months
Company puts sale of Cub Food and Shoppers stores on hold
Victoria A.F. Camron | May 14, 2020
National food distributor United Natural Foods Inc. (UNFI) has a long history of serving both natural retailers and conventional grocers. In the coronavirus pandemic, it's the conventional business that is winning out, the company says.
“Today, conventional growth — conventional demand at wholesale — is outpacing natural 3-to-1,” UNFI CEO Steven Spinner said Wednesday.
He and Chief Financial Officer John Howard took questions from Kelly Bania, a managing director and analyst at BMO Capital Markets. BMO's 15th annual Farm to Market Conference was conducted online, with Bania, Howard and Spinner apparently logging in from their homes.
Spinner said he expects the recession that COVID-19 started to last another 18 to 24 months. Consumers will continue to prepare food and eat at home, and look for values in the conventional stores.
“The primary focus is getting products into our customers’ hands so they can get to the end consumer in this type of environment,” Howard said.
Because UNFI is the largest publicly traded distributor of natural, organic and conventional foods in the United States — and it has some of the country’s biggest retailers on its list of customers — it has been able to reduce the number of out-of-stock products retailers want.
“We have been able to secure supply, because of our size and scale, and make those products available to the independents,” Spinner said.
Since natural and organic use a wider variety of suppliers, those products are less likely to be delayed. In conventional, 19 companies produce 70% of purchased foods, he said.
Pandemic justifies Supervalu purchase
Yet again, Spinner pointed out that market forces such as the pandemic-related shopping surge justify the distributor’s 2018 purchase of competing distributor Supervalu.
‘COVID and the dramatic [increase in] volume proved out once and for all that our strategy to acquire a big, conventional wholesaler worked and was appropriate,” Spinner declared. “Had we not done it, our results would have looked much different.”
On Wednesday, UNFI’s stock closed at $22.59, its highest since it closed at $23.00 on Nov. 19, 2018.
Besides gaining conventional customers and numerous distribution centers, UNFI picked up extensive services with the purchase of Supervalu. Those services, which include technology, finances and data, are valued at $200 million a year, Spinner said.
“That’s going to be a big part of our strategy moving forward,” he said.
Retail sale on hold
Another part of UNFI’s strategy has changed: The recession has put on hold its plans to sell the grocery retailers it acquired from Supervalu, Spinner said. The company currently owns 79 Cub Foods stores in the Minneapolis market and about two dozen Shoppers stores in the Washington, D.C., area.
The company’s leadership considers it “immoral” to sell the retail business and potentially create a food desert during this time of high demand. Therefore, UNFI will likely keep the retailers for another 12 to 18 months, he said.
BMO's Bania asked both executives about UNFI’s preliminary Q3 earnings, which were released Tuesday.
The third quarter, which ended May 2, showed net sales growth of 12%; net income growth of about 54%; and an adjusted EBITDA increase of about 32%. A full report will be released in early June, Howard said Wednesday.
“When you think about sales growth, remember that COVID didn't happen until halfway through our quarter, so that 12% growth is somewhat muted by the fact that we only had it for half the quarter,” Spinner said. UNFI’s third quarter began Feb. 2, but COVID-19 began appearing in March.
The earnings report noted that UNFI paid $290 million of its debt in the quarter. Howard said that for the fiscal year, it has paid $330 million — even though it hasn't sold some Supervalu properties such as Cub Foods and the Tacoma, Wash., distribution center. Proceeds from those sales are allocated for debt reduction.
The company is still on track to reach its 2022 goal of saving $185 million through synergies with Supervalu, he said.
I want to pass along this article from the Star Tribune about UNFI’s plans to sell the real estate of 15 Cub Food stores. I am committed to keeping you up to date with news as it happens about Cub Foods.
As always, please feel free to contact me with any questions you have.
Matt Utecht, President, UFCW Local 663
The deal is expected to have no noticeable effect on operations at the Twin Cities' largest grocery chain.
By John Ewoldt Star Tribune MARCH 12, 2020 — 10:37AM
UNFI is selling the real estate at 15 Cub Foods stores to raise cash to pay down debt.
Unable so far to sell the 79 Cub Foods stores it owns, United Natural Foods Inc. has found an alternative to glean cash from the supermarket chain.
UNFI chief executive Steve Spinner announced on Wednesday that it will sell the real estate of 15 Cub stores for $170 million. The sale represents 1.1 million square feet of retail space. It is expected to close by August.
As part of an agreement with the unidentified buyer, UNFI will then pay rent on the store spaces.
"There won't be any noticeable changes in the stores," said UNFI spokesman Mike Wilken. "It's just the real estate changing ownership."
Until the sale closes, UNFI is not releasing the locations of the 15 stores.
UNFI purchased Eden Prairie-based Supervalu for $2.9 billion in 2018, chiefly to bolster its wholesale business with Supervalu's. But it also gained the firm's retail chains — the biggest of which is Cub, the market leader in the Twin Cities — and Supervalu's debt. Both have been burdensome to UNFI and its executives have sold most of Supervalu's other retail assets, including Shop 'n Save and Farm Fresh in St. Louis and the mid-Atlantic states. Last year St. Cloud-based Coborn's purchased the Hornbacher's chain in the Fargo Moorhead area.
In a conference call with investors on Wednesday, Spinner said the proceeds from the real estate deal will be used to "repay outstanding debt."
The timeline for the sale of the stores, which Spinner expected to occur in early 2020, has now been extended to the end of 2020.
"You don't have to be a rocket scientist to figure out that this is a really tough climate to sell retail and Cub is an incredibly strong banner," Spinner said. "It's number-one market share, makes a lot of money, it throws off a lot of cash. And so we're just not going to give it away. The process is taking longer than I think we had expected, just because of the general climate within retail."
In addition to Cub, UNFI also owns the Shoppers grocery chain. In the last several months it sold 19 of 43 Shoppers stores, located in the Washington D.C. and Baltimore areas. Fifty-three Cub stores are corporate-owned. The remainder are independent.
##### END OF MARCH 12 COMMUNICATION#####
SPANISH TRANSLATION OF UFCW PRESS RELEASE ON PORK LINE SPEED BELOW
Monday, October 7, 2019
Para publicación inmediata:
October 7, 2019
Abraham White (202) 341-1899
UFCW presenta demanda para detener la peligrosa regla de velocidad de la línea de cerdo del USDA
El sindicato del sector privado más grande de Estados Unidos, que representa a 30.000 trabajadores porcinos, desafía la política del USDA que pone en peligro la seguridad de los alimentos y los trabajadores
MINNEAPOLIS, MN – Hoy, United Food and Commercial Workers (UFCW) Union International, junto con Ciudadano Public y UFCW Locales 663, 440 y 2 presentaron una demanda federal en la corte del Distrito de los Estados Unidos por el Distrito de Minnesota tratando de detener la nueva norma de modernización de la matanza porcina del Departamento de Agricultura de los Estados Unidos (USDA) que elimina los límites de velocidad de línea en las plantas de matanza de carne de cerdo y convierte la inspección de nuestros alimentos en las empresas que los producen.
"Miles de nuestros miembros trabajan duro todos los días en las plantas de cerdo de Estados Unidos para ayudar a las familias de todo el país a poner comida sobre la mesa. El aumento de las velocidades de las líneas de las plantas de cerdo no es sólo un sorteo imprudente para las corporaciones gigantes, sino que pondrá a miles de trabajadores en peligro", dijo marc Perrone, presidente internacional de UFCW. "Esta nueva regla también debilitaría dramáticamente las protecciones críticas de las que dependen los estadounidenses para poder seleccionar alimentos seguros y saludables para alimentar a sus familias todos los días. La seguridad de los alimentos y los trabajadores de Estados Unidos no está a la venta y esta demanda busca asegurar que esta peligrosa regla sea anulada y estas empresas sean responsables".
"Sorprendentemente, el USDA admitió en su gobierno que simplemente ignoró los montículos de evidencia que mostraban que sus acciones dañarán a los trabajadores, mientras se inclinaba hacia atrás para ayudar a las empresas. Eso viola los principios básicos del derecho administrativo", dijo Adam Pulver, un abogado con Ciudadano Publico, que representa a UFCW y a los tres locales en el caso.
La demanda alega que la nueva norma viola la Ley de Procedimiento Administrativo, porque no está respaldada por una decisión razonada de las decisiones.
“Impulsamos el USDA a considerar cómo inseguro esta regla haría nuestros lugares de trabajo, pero se negaron”, dijo el Presidente Matt Utecht de UFCW local 663 en Minnesota. "No tuvimos más remedio que ir a la corte para detener una regla que pondrá en peligro la salud y los medios de vida de miles de miembros de UFCW".
"Estamos muy orgullosos de los productos que producen nuestros miembros", dijo Leo Kanne, presidente de UFCW Local 440 en Iowa. "Esta regla erosionará la calidad y la seguridad de los alimentos que elaboramos y alimentamos a nuestras propias familias".
"El USDA afirma que esta regla hará que nuestra comida sea más segura", dijo Martin Rosas, presidente de UFCW Local 2, en Kansas."Pero nuestros miembros, que han trabajado en la industria durante años, saben de primera mano que hace tanto los alimentos que fabrican como las plantas que trabajan en menos seguros. Escuchemos a los expertos de primera mano que trabajan en estas plantas todos los días, en lugar de grandes corporaciones que buscan ganar aún más dinero".
En cuanto al USDA, se publicó una nueva norma para las inspecciones de carne de cerdo que elimina los límites a las velocidades de las líneas en las plantas de matanza de puerco y entrega las principales tareas de inspección de la carne de los inspectores federales a las empresas de carne.
UFCW representa a unos 250,000 trabajadores en las industrias de empaque de carne y procesamiento de alimentos y 30,000 trabajadores en plantas de cerdo. Los miembros de UFCW manejan el 71 por ciento de todos los cerdos matados y procesados en los Estados Unidos.
En mayo de 2018, más de 6,500 miembros de UFCW que trabajan en plantas de cerdo enviaron comentarios al USDA en oposición a la regla propuesta que aumentaría la velocidad de línea donde trabajan, amenazando tanto a ellos como a los consumidores a los que sirven.
Todos los locales de UFCW, quienes estan involucrados en la demanda que representa trabajadores de la matanza de carne de cerdo. UFCW Local 663 se basa en Brooklyn Center, Minnesota; UFCW Local 440 se basa en Denison, Iowa; y la UFCW Local 2 se basa en Bel Aire, Kan.
La Modernización de la regla de Inspección de la Matanza de Cerdos hará daño a trabajadores a través del país.
Riesgos de modernización de regla de inspección de la matanza de cerdos:
La Modernización de la regla de Inspección de la Matanza de Cerdos quita todas las limitaciones en línea velocidades en fábricas de la matanza del cerdo que pondrán en peligro salud y seguridad de decenas de miles de trabajadores en la industria de la matanza del cerdo.
Incluso a las velocidades actuales de la línea, que los trabajadores enfrentan muchos trabajo riesgos que puede conducir a graves heridas, enfermedad y muerte.
No hay evidencia de que los aumentos de la velocidad de la línea se puedan hacer de una manera que garantice la seguridad de los alimentos y los trabajadores.
En 1997, el USDA creó un programa piloto llamó el Proyecto de Modelos Inspector Basado en HACCP (HIMP) que permitió que cinco plantas de la matanza del cerdo probaran un nuevo programa de la seguridad alimentaria. El programa piloto de la matanza del cerdo reveló cuestiones de seguridad serias incluso una planta de la comida de Clemens en Pensilvania que relató heridas bastante severas que fueron hospitalizados dos trabajadores, y uno sufrió una amputación.
La Modernización de la regla de Inspección de la Matanza de Cerdos no incluye ningún requisito o financiando para entrenar a empleados de la planta en técnicas inspectores que fueron realizadas antes por inspectores USDA y son ahora su responsabilidad.
El aumento de las velocidades de las líneas perjudicará desproporcionadamente a las mujeres y a las personas de color.
Hechos clave sobre trabajadores de plantas de cerdos:
Trabajadores de plantas de matanza trabajan en frías, mojadas, ruidosas, y resbaladizas donde hacen decenas de miles de movimientos reiterativos dificiles en cada turno.
Las investigaciones muestran que el ritmo rápido en las plantas de cerdo, junto con la naturaleza dificil y repetitiva de la mayoría de los trabajos, conduce a altas tasas de heridas y problemas de salud.
Los trabajadores de plantas de matanza son heridos a 2.4 veces el precio de otras industrias. Estas heridas causan tiempo perdido o restricciones a tres veces el precio de otras industrias y están enfrente de precios de la enfermedad a 17 veces el precio de otras industrias.
La velocidad de la línea máxima anterior para cerdos era 1,106 cerdos por hora.
Friday, October 4, 2019
Dear Local 663 Members,
I wanted to pass along this article from Supermarket News about UNFI’s plan to sell Cub Foods. Just like I have kept you up to date with news as it happens, this article states what I have been communicating with you that UNFI plans to sell Cub by next year.
As always, please feel free to contact me with any questions you have. I look forward to seeing you at the monthly membership meeting on Monday, October 7.
President, UFCW Local 663
Thursday, August 8, 2019
Local 663 Members,
This morning, Coborn’s announced it will stop deliveries in the metro area, and direct its customers to use Cub Foods delivery and pickup service instead. UFCW Local 663 always applauds the use of union shops such as Cub, and our Local 663 members are proud to bring out groceries to customers in parking lots of Cub Foods.
I’m committed to updating you with news as soon as I find out and protecting our rights to better wages, benefits and lives because we work union. While today’s news doesn’t directly affect our union membership, it is important to note what is happening and to be on top of it.
Make no mistake, it is because we stand together as UFCW Local 663 that we are able to win better wages and benefits, take on tough employers, represent members on the job, and raise industry standards.
President, UFCW Local 663