REVENUE RECOGNITION

9 Months Ended

May 02, 2020

Revenue from Contract with Customer [Abstract]

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenues

The Company records revenue to four customer channels, which are described below:


•	Supermarkets, which include accounts that also carry conventional products, and include chain accounts, supermarket independents, and gourmet and ethnic specialty stores.


•	Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market.


•	Independents, which include single store and chain accounts (excluding supernatural, as defined above), which carry primarily natural products and buying clubs of consumer groups joined to buy products.


•	Other, which includes conventional military business, international customers outside of Canada, as well as sales to Amazon.com, Inc., e-commerce, and foodservice.

The following tables detail the Company’s revenue recognition for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly.



	Net Sales for the 13-Week Period Ended
(in millions)	May 2, 2020
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supermarkets	$	4,267	$	—	$	—		$	4,267
Supernatural	1,279		—		—			1,279
Independents	684		—		—			684
Other	441		56		(59		)	438
Total	$	6,671	$	56	$	(59	)	$	6,668

	Net Sales for the 13-Week Period Ended
(in millions)	April 27, 2019⁽¹⁾
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supermarkets	$	3,701	$	—	$	—		$	3,701
Supernatural	1,102		—		—			1,102
Independents	707		—		—			707
Other	435		62		(44		)	453
Total	$	5,945	$	62	$	(44	)	$	5,963

	Net Sales for the 39-Week Period Ended
(in millions)	May 2, 2020⁽¹⁾
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supermarkets	$	11,915	$	—	$	—		$	11,915
Supernatural	3,600		—		—			3,600
Independents	1,983		—		—			1,983
Other	1,324		158		(155		)	1,327
Total	$	18,822	$	158	$	(155	)	$	18,825

	Net Sales for the 39-Week Period Ended
(in millions)	April 27, 2019⁽¹⁾
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supermarkets	$	8,559	$	—	$	—		$	8,559
Supernatural	3,229		—		—			3,229
Independents	2,041		—		—			2,041
Other	1,104		167		(120		)	1,151
Total	$	14,933	$	167	$	(120	)	$	14,980

(1)

During the first quarter of fiscal 2020, the presentation of net sales by customer channel was adjusted to reflect reclassification of customer types resulting from management’s determination that a customer serviced by both legacy Supervalu and UNFI should be classified as a Supermarket customer given that customer’s operations. During the second quarter of fiscal 2020, the presentation of net sales by customer channel was adjusted to reflect conventional military sales within Other instead of Independents based on management’s determination to better reflect the focus of its ongoing business and the definition of customer channels above. There was no impact to the Condensed Consolidated Statements of Operations as a result of the reclassification of customer types. As a result of these adjustments, net sales to the Company’s Supermarkets channel for the third quarter of fiscal 2019 and for fiscal 2019 year-to-date increased approximately $26 million and $77 million, respectively, compared to the previously reported amounts, while net sales to the Other channel for the third quarter of fiscal 2019 and for fiscal 2019 year-to-date increased $96 million and $213 million, respectively, compared to previously reported amounts. Net sales to the Company’s Independents channel for the third quarter of fiscal 2019 and fiscal 2019 year-to-date decreased $122 million and $290 million, respectively, compared to the previously reported amounts.

The Company serves customers in the United States and Canada, as well as customers located in other countries. However, all of the Company’s revenue is earned in the U.S. and Canada, as international distribution occurs through freight-forwarders. The Company does not have any performance obligations related to international shipments subsequent to delivery to the domestic port.

Sales from the Company’s Wholesale segment to its retail discontinued operations are presented within Net sales when the Company holds the business for sale as of the end of the reporting period with a supply agreement that it anticipates the sale of the retail banner to include upon the disposal of the business. The Company recorded $273.2 million and $227.1 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in the third quarters of fiscal 2020 and 2019, respectively, and $756.9 million and $505.5 million for fiscal 2020 and 2019 year-to-date, respectively, which the Company expects will continue subsequent to the sale of certain retail banners. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No sales were recorded within continuing operations for purchases by retail banners that the Company expects to dispose of without a supply agreement, which were eliminated upon consolidation within continuing operations and amounted to $99.3 million and $134.9 million in the third quarters of fiscal 2020 and 2019, respectively, and $320.0 million and $308.0 million in fiscal 2020 and 2019 year-to-date, respectively.

Contract Balances

Accounts and notes receivable are as follows:



(in thousands)	May 2, 2020			August 3, 2019
Customer accounts receivable	$	1,264,869		$	1,063,167
Allowance for uncollectible receivables	(52,144		)	(20,725		)
Other receivables, net	19,887			23,257
Accounts receivable, net	$	1,232,612		$	1,065,699

Customer notes receivable, net, included within Prepaid expenses and other current assets	$	12,122		$	11,912
Long-term notes receivable, net, included within Other assets	$	25,472		$	34,408