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GOURMET NEWS DECEMBER 2018 www.gourmetnews.com NEWS & NOTES 8 Consumers to Spend 4.1 Percent More Than Last Year During Winter Holidays Consumers say they will spend an average of $1,007.24 during the holiday season this year, up 4.1 percent from the $967.13 they said they would spend last year, ac- cording to the annual survey by the Na- tional Retail Federation and Prosper Insights & Analytics. "The holidays are just around the corner and consumers are ready to shop," NRF President and CEO Matthew Shay said. "Confidence is near an all-time high, un- employment is the lowest we've seen in decades and take-home wages are up. All of that is reflected in consumers' buying plans. Retailers expect strong demand this year, and are prepared with a wide array of merchandise while offering strong deals and promotions during the busiest and most competitive shopping season of the year period." Tariffs on a wide range of consumer goods from China took effect last month, but Shay noted that retailers imported record volumes of merchandise ahead of the tariffs this summer and said any effect on pricing during the holiday season is ex- pected to be minimal. The consumer survey comes on top of NRF's annual holiday spending forecast, which takes into account a variety of eco- nomic factors to project overall spending rather than per-consumer spending. The forecast estimated that holiday retail sales in November and December will be up be- tween 4.3 percent and 4.8 percent over 2017 for a total between $717.45 billion and $720.89 billion. Consumers will spend in three main cat- egories during the holidays – gifts, at $637.67; non-gift holiday items such as food, decorations, flowers and greeting cards, at $215.04; and other non-gift pur- chases that take advantage of the deals and promotions throughout the season, at $154.53. Holiday shoppers are planning to spread their shopping across multiple channels and types of stores: An equal number (55 percent) will shop online and in depart- ment stores while 51 percent will go to dis- count stores, 44 percent to grocery stores, 33 percent to clothing stores and 24 per- cent to electronics stores. The mix of chan- nels was further evident with 50 percent of those shopping online saying they will pick up their purchases in-store. Of online shop- pers who want the package to come to their home or office, 94 percent will take advan- tage of free shipping, 16 percent will choose expedited shipping and 11 percent will use same-day delivery. Most holiday shoppers (60 percent) are waiting until at least November to begin browsing and buying items for the season. However, 21 percent planned to start in Oc- tober and 18 percent said they began in September or earlier. Of the early shoppers, 61 percent said they were trying to spread out their budgets while 47 percent wanted to avoid the crowds and stress of last- minute shopping. While sales and discounts remained the largest factor in choosing a particular re- tailer, cited by 71 percent, quality and se- lection of merchandise were the next-largest factor (cited by 60 percent), followed by free shipping (47 percent) and convenient location (45 percent). "Consumers will be scouring through re- tailers' ads to make sure they are getting the best deal possible," Prosper Insights Exec- utive Vice President of Strategy Phil Rist said. "Although sales will remain an impor- tant factor, shoppers want good quality and want to be able to find what they're looking for." For the 12th year in a row, gift cards re- main the most popular items on wish lists, requested by 60 percent of those surveyed, followed by clothing and accessories at 53 percent, books/movies/music (37 percent), electronics (29 percent), home décor (23 percent), jewelry (22 percent), personal care or beauty items (19 percent), sporting goods (18 percent) and home improvement items (17 percent). The survey of 7,313 adult consumers was conducted October 1-11 and has a margin of error of plus or minus 1.2 per- centage points. GN United Fresh to Present Lifetime Achievement Award to Ron Carkoski United Fresh Produce Association will present its Lifetime Achievement Award to Ron Carkoski, Chief Executive Of- ficer, Four Seasons Family of Com- panies, at Fresh Start 2019, the United Fresh Start Foundation's an- nual conference, golf tournament and Gala Dinner January 15, at the La Quinta Resort & Club, La Quinta, California. "As Ron plans his retirement after nearly three decades of service to the fresh pro- duce industry, I can't think of a more de- serving individual to recognize with the Lifetime Achievement Award," said United Fresh President and Chief Executive Offi- cer Tom Stenzel. "I know that communities throughout the produce supply chain will want to join in honoring a friend who has touched so many across our in- dustry." Carkoski joins a distinguished group of past recipients, including Hugh Topper, Bruce McEvoy, Rick and Tonya Antle, Mike Cavallero, Joe Procacci, Reggie Griffin, Frieda Ca- plan and Bob Grimm (posthumously). Carkoski currently serves as the Chief Executive Officer of the Four Seasons Family of Companies which includes Four Seasons Produce, Earth Source Trading, Sunrise Logistics, and Sunrise Transport. Ron's leadership is known to follow "The Golden Rule" which is epit- omized by the mission of Four Seasons Produce: "Growing Ideas – Producing Excellence." He drives the company through integrity, dynamic leadership, exceptional partnerships and a winning culture, all pillars that support the com- pany's success. Throughout his career, Ron has been active in the industry, serving as Chair- man of the United Fresh Board of Direc- tors, and Chairman of its Wholesale-Distributor Board. In his community, he has served on the board of directors of the Delaware Valley Floral Group and Chairman of the Delaware Valley Floral Group's Talent and Human Resources Committee. Most recently, Ron was elected to the Peninsula Music Festival Foundation Board of Trustees and is a member of the Make-A-Wish of Philadelphia and Susquehanna Valley Board of Directors. Ron was honored as "Produce Man of the Year" by The Packer in 2015 and received the Corporate Citizenship Award presented by the Central Pennsylvania Business Jour- nal. After living in Pennsylvania for the past 24 years, he and his wife, Patricia, have recently relocated to their new home in Egg Harbor, Wisconsin. GN UNFI Completes Acquisition of SUPERVALU United Natural Foods, Inc. has completed the previously announced acquisition of SUPERVALU INC. for $32.50 per share in cash, or approximately $2.9 billion, includ- ing the assumption of outstanding debt and liabilities. The completion follows the sat- isfaction of all closing conditions including approval of the transaction by SUPERVALU shareholders and receipt of all necessary antitrust approvals. In connection with the completion of the transaction, SUPER- VALU's common stock ceased trading prior to market open on October 22, 2018. "Today is an important milestone for UNFI. We will take the best from both businesses to create North America's pre- mier food wholesaler with significant scale, reach and choices for our customers. We are pleased to welcome our new colleagues from SUPERVALU as well as their cus- tomers and suppliers to UNFI. Our compa- nies share customer-centric cultures and dedicated associates who are committed to continuous improvement, which will help drive our integration programs," said Steve Spinner, UNFI's Chairman and Chief Exec- utive Officer. "We are excited to continue to further build out the store to a more diverse cus- tomer base across the country, with both broad better-for-you natural, organic brands and fresh perimeter offerings, as we capitalize on opportunities to cross-sell and realize the benefits of the greater scale we now have as a combined company," said Sean Griffin, Chief Executive Officer of SU- PERVALU and Head of the Integration Committee. "Work has already begun for the company to realize the significant pro- jected run-rate cost synergies associated with this transaction – more than $175 mil- lion by year three and more than $185 mil- lion by year four – and we are committed to improving profitability into the future. We believe that we can achieve these tar- gets and leverage scalable systems to streamline our processes, more efficiently meet the needs of our customers and re- duce future capital expenditures. We look forward to providing an update on our in- tegration efforts at our January 16, 2019 in- vestor day." Executive Leadership Team UNFI's Chairman and Chief Executive Of- ficer Steve Spinner will lead the combined entity, supported by Chris Testa, President of UNFI; Danielle Benedict, Chief Human Resources Officer; Eric Dorne, Chief Ad- ministrative Officer & Chief Information Officer; Paul Green, Chief Supply Chain Of- ficer; Jill Sutton, Chief Legal Officer, Gen- eral Counsel & Corporate Secretary; and Mike Zechmeister, Chief Financial Officer. Sean Griffin, previously UNFI's Chief Operating Officer, will serve as Chief Exec- utive Officer of SUPERVALU and Head of the Integration Committee. This committee includes executives from both companies to drive the implementation of best prac- tices from each company and delivery of synergies as well as a rapid and smooth in- tegration. Anne Dament, Executive Vice President, Retail, Marketing and Private Brands, and Mike Stigers, Executive Vice President, Wholesale will report to Griffin to support the SUPERVALU business oper- ations. Financing the Transaction As previously noted, the transaction will be primarily debt financed. UNFI finalized new credit facility agreements including a $2.1 billion asset-based revolving credit fa- cility, up to $1.475 billion of which is avail- able at closing, and a $1.950 billion senior secured first lien term loan facility agree- ment consisting of a $1.8 billion term loan "B" tranche and a $150 million 364-day tranche. In addition, UNFI's existing asset- based revolving credit facility was termi- nated upon close. GN

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