US Foods Announces New Retail Support Strategy
ROSEMONT, IL - As retailers work to meet unprecedented demands amongst this challenging time, operators from different sectors are investing their support into the grocery sector. One of the industry’s leading foodservice distributors, US Foods, announced updates on the impact of the coronavirus (COVID-19) on the foodservice industry and its business, detailing a $1 billion strategy and extensive retail support.
“As the COVID-19 situation continues to evolve, our priority is the health and safety of our associates, customers, and communities,” said Pietro Satriano, Chairman and CEO. “While the full business impact of COVID-19 is not yet known, we are taking immediate action to reduce our costs to match the slowdown we’re seeing in restaurant, hospitality, and education-case volume. We are also leveraging our supply chain resources to support the retail industry as they experience unprecedented increases in consumer demand. Finally, I would like to thank our associates for their outstanding efforts in continuing to serve our customers during this difficult time.”
The distributor has secured new opportunities to support and sell to retail outlets like grocery stores, and to contract some of its workforce to companies experiencing increased demand. These actions are expected to partially mitigate the declines currently seen in sales to restaurants, hospitality, and education customers.
The company also said it is taking aggressive steps to reduce operating costs and strengthen its liquidity position by preserving cash, including:
- Actively managing all areas of working capital
- Eliminating all non-critical capital spend
- Temporary furloughs to match changes in demand
- Freezing hiring, deferring corporate wage increases, and reducing executive and board compensation
- The company is a long-time supplier to the healthcare industry and armed forces and continues to support these customers as they work to serve our communities in this difficult time. US Foods is also supportive of efforts to provide relief for the restaurant industry and is helping its restaurant and hospitality customers adapt to the current situation with tools and resources to build and manage carryout and delivery capabilities
Additionally, in light of the rapidly evolving impact of COVID-19 on the economy and foodservice and restaurant industries, US Foods is withdrawing its fiscal 2020 guidance.
Despite this, the company noted it has a strong balance sheet that will enable it to weather the economic impact of COVID-19. In turn, it has proactively drawn $1 billion under its existing revolving credit facilities to retain as cash on hand. According to a press release, US Foods has no debt maturing until fiscal 2022 and is actively working to explore additional financing opportunities if needed.
For more updates on COVID-19 as they pertain to our industry, keep checking in with us at AndNowUKnow.