320431--12/14/2007--UNIFIED_WESTERN_GROCERS

related topics

{loss, insurance, financial}

{customer, product, revenue}

{cost, operation, labor}

{cost, regulation, environmental}

{system, service, information}

{product, market, service}

{product, liability, claim}

{condition, economic, financial}

{control, financial, internal}

{investment, property, distribution}

{tax, income, asset}

{personnel, key, retain}

{acquisition, growth, future}

The markets in which we operate are highly competitive, characterized by high volume and low profit margins, customer incentives, including pricing, variety, and delivery, and industry consolidation. The Company may experience reduced sales if Members lose market share to fully integrated chain stores, warehouse stores and supercenters that have gained increased market share. This trend is expected to continue. We will continue to be subject to the risk of loss of Member and non-member customer volume. The Company may experience reduced sales if Members purchase directly from manufacturers. We are vulnerable to changes in general economic conditions. Litigation could lead to unexpected losses. We are subject to environmental laws and regulations. We are exposed to potential product liability claims and potential negative publicity surrounding any assertion that the Company s products caused illness or injury. Our insurance reserves may be inadequate if unexpected losses occur. We may not have adequate resources to fund our operations. The value of our benefit plan assets and liabilities is based on estimates and assumptions, which may prove inaccurate. A system failure or breach of system or network security could delay or interrupt services to our customers or subject us to significant liability. Our success depends on our retention of our executive officers, senior management and our ability to hire and retain additional key personnel. The successful operation of our business depends upon the supply of products, including raw materials, and marketing relationships from other companies, including those supplying our corporate brand products. Increased energy, diesel fuel and gasoline costs could reduce our profitability. Strike or work stoppage by our union employees could disrupt our business. The inability to negotiate acceptable contracts with the unions could result in a strike or work stoppage and increased operating costs resulting from higher wages or benefits paid to union members or replacement workers. If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our financial results accurately, which could harm our business and we could be subject to regulatory scrutiny. A loss of our cooperative tax status could increase tax liability. A failure to successfully integrate the operations of AG could reduce our profitability.

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320431--12/14/2007--UNIFIED_WESTERN_GROCERS_INC