Why This Matters to Distributors: Sysco is building a multichannel model that combines broadline delivery with cash and carry locations, giving restaurant operators more purchasing options. If successful, the strategy could increase competitive pressure on regional distributors by expanding Sysco’s reach, convenience, and purchasing scale.
Sysco Corp. outlined how its pending acquisition of Jetro Restaurant Depot will expand its reach among independent restaurant operators, detailing plans to grow the cash and carry chain, cross-selling customers and strengthen its position across multiple purchasing channels.
CEO Kevin Hourican and interim CFO Brandon Sewell discussed the strategy during the Deutsche Bank Access Global Consumer Conference in Paris on June 2, according to a transcript filed with the U.S. Securities and Exchange Commission.
Sysco announced the acquisition March 30. The transaction remains under review after federal antitrust regulators issued a second request for information, with the company expecting the deal to close in approximately nine months. Hourican said Sysco expects the acquisition to be approved because the two companies have limited customer overlap and the company does not plan to raise prices at Restaurant Depot following the transaction.
Restaurant Depot operates 167 cash and carry warehouse locations serving independent restaurants and foodservice operators. Executives said the business generated $16 billion in annual revenue, $2.1 billion in EBITDA and $2 billion in free cash flow. The company has increased sales in 28 of the past 30 years and profit every year during that period, including through the COVID 19 pandemic.
Executives attributed Restaurant Depot’s 13% EBITDA margin, more than double Sysco’s standalone 5.2% margin, to its low-cost operating model. Customers select, load, and transport their own purchases, eliminating the need for delivery fleets, in store selectors and sales commissions.
Sysco said the acquisition is expected to increase companywide revenue by 20%, adjusted EBITDA by 45% and free cash flow by 55%. The company expects to generate $250 million in annual cost synergies through procurement and payment processing savings while reiterating that the integration will not include workforce reductions.
Rather than integrating Restaurant Depot into its existing operations, Sysco plans to use the chain to complement its delivery network. The company has identified at least 125 additional U.S. markets where it believes the Restaurant Depot format can expand. Hourican said the analysis does not include Canada, where Sysco sees additional long-term opportunity.
Executives also outlined plans to cross sell between the two customer bases. Sysco intends to offer Restaurant Depot customers specialty products, including custom cut proteins, while using the chain’s locations to help delivery customers replenish inventory between scheduled deliveries. Hourican said Cheesecake Factory has already expressed interest in using Restaurant Depot locations as a backup supply source.
Separately, Sysco said its core U.S. broadline business continues to improve despite flat restaurant traffic. The company expects local case volume growth of at least 2.5% during the current quarter, a 120-basis point improvement on a two-year stacked basis from the previous quarter. Executives credited stronger sales execution, improved retention of sales associates and the rollout of AI 360, an artificial intelligence application that helps sales representatives prioritize customer visits and product recommendations.
Sysco also reported its international business posted a second consecutive quarter of 4% volume growth and a 10th straight quarter of double-digit operating income growth. The company said it plans to provide additional details on the Restaurant Depot integration and its broader technology strategy, including AI 360, when it issues fiscal 2027 guidance during its fourth quarter earnings call.
If approved, the Restaurant Depot acquisition would give Sysco a stronger presence with independent restaurants by combining traditional broadline distribution with a national cash and carry network, broadening its reach beyond the conventional delivery model.
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