United Natural Foods Inc. (UNFI) opened fiscal 2026 with straightforward evidence that its long-running investment in artificial intelligence (AI), automation and digital transformation is starting to reshape the distributor’s operations in meaningful ways.
While the company reported a solid earnings beat, the most significant developments of the quarter came from technology. More specifically: how it changes forecasting, fulfillment, merchandising — and the pace at which new products reach retail shelves.
UNFI ended the quarter with $7.8 billion in revenue, flat from the prior year. Meanwhile, profitability expanded sharply. Growth in natural and organic products remained standout at 11% year over year. At the same time, conventional sales declined following the company’s planned exit from its Allentown, Pennsylvania, distribution center.
UNFI taps into AI to improve forecasting and fulfillment
Much of the quarter’s operational lift stemmed from the continued rollout of Relex, which UNFI’s uses for AI-powered demand forecasting and inventory management. Now deployed across about half the company’s distribution centers, the system is already changing how UNFI procures, stocks and replenishes goods.
Executives said the platform is improving demand prediction, reducing out-of-stocks and cutting waste. All three were pain points that have long challenged grocers and their suppliers. The company expects full deployment by fiscal year end, and early results indicate the system is helping raise fill rates and improve working capital efficiency.
Automation also expanded across UNFI’s network. The company ramped operations at its new automated natural-products distribution center in Sarasota, Florida, which it built to serve one of its fastest-growing categories. At the same time, UNFI extended lean daily management to 34 distribution centers. That gives its frontline teams digital tools and workflows to resolve problems faster. Throughput — a key measure of distribution productivity — rose more than 2% from last year’s first quarter and 10% compared with 2024. That reflects both the new technology and process redesign, according to the company.
How UNFI is using data to improve its merchandising
Digital transformation also reached deeper into UNFI’s commercial organization.
UNFI is rebuilding its digital merchandising capabilities to help grocers better compete in pricing, assortment and private brands. It appointed new leadership to its private-brands program and used lean improvement workshops to overhaul supplier item-setup workflows. Those changes have shortened the time it takes for new products, particularly from emerging brands, to reach the more than 30,000 retail locations UNFI serves.
While revenue remained steady, the gains in digital performance, AI forecasting, and network automation contributed to a fundamentally stronger operating profile. The company reaffirmed full-year revenue guidance of $31.6 to $32.0 billion.
UNFI’s leadership framed the quarter as part of a broader transformation aimed at helping retailers compete with better insights, faster replenishment and more digitally driven merchandising. The company plans to detail its technology roadmap at next week’s Investor Day. That’s when executives will showcase how AI, automation and digital tools shaping the next phase of its distribution strategy.
For distributors and grocers confronting volatile demand and rising competitive pressure, UNFI’s results offer a glimpse of how AI and digital systems are beginning to change performance dynamics across the supply chain. The transformation is no longer theoretical. It is now visible in how the company operates — and increasingly reflected in its results.
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