United Natural Foods, the primary distributor for Amazon-owned Whole Foods Market, has been struck by outages following a cyber attack that is expected to cause disruption on supermarket shelves.
UNF, which counts on Whole Foods for close to a quarter of its $31bn in annual net sales, said it had detected “unauthorised activity” on its IT systems on June 5. The incident led it to take some systems offline, impeding its ability to fulfil and distribute customer orders.
Further “temporary” disruptions to the company’s operations were expected, UNF said in its filing with the US Securities and Exchange Commission on Monday, adding that an investigation was in its early stages and that it had notified law enforcement.
The incident is the latest among retailers which are grappling with the threat of cyber attacks. UK groups including Marks & Spencers and the Co-op were forced to shut down their systems in recent months.
For UNF, the breach jeopardises smooth supply of fresh produce and branded products to more than 30,000 locations throughout North America, including to stores of upmarket grocery chain Whole Foods.
UNF last year signed a deal with Whole Foods to extend its role as the Amazon subsidiary’s “primary distributor” until May 2032. David Garraway, vice-president of supply chains for Whole Foods, said at the time that the Rhode Island-based company played an “important role in our supply chain”.
UNF said in its most recent annual report that its largest customer, which is understood to be Whole Foods, accounted for about 23 per cent of the $31bn in net sales during its fiscal year ended August 3 2024.
UNF said it had implemented “workarounds” for some operations, seeking to minimise disruption to customers where possible, and that it was working to safely bring its systems back online. It did not say whether it was subject to a ransom request.
Shares in UNF fell as much as 9.3 per cent on Wall Street following the disclosure. The stock recovered some ground to close close 6.9 per cent lower, giving the group a market capitalisation of almost $1.6bn.
UNF’s 2024 distribution deal with Whole Foods replaced a pre-existing arrangement that was expected to expire in 2027. The group’s commercial relationship with the grocery chain predates its acquisition by Amazon in 2017 for $13.7bn.
Whole Foods did not respond to a request for comment.
UNF is set to report quarterly results on Tuesday.
