<SEC-DOCUMENT>0001193125-12-038864.txt : 20120315
<SEC-HEADER>0001193125-12-038864.hdr.sgml : 20120315
<ACCEPTANCE-DATETIME>20120203161941
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-12-038864
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120203

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INGLES MARKETS INC
		CENTRAL INDEX KEY:			0000050493
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-GROCERY STORES [5411]
		IRS NUMBER:				560846267
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			0929

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
		BUSINESS PHONE:		7046692941

	MAIL ADDRESS:	
		STREET 1:		P O BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">February&nbsp;3, 2012 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Andrew D. Mew </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accounting Branch Chief </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Donna Di Silvio </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Staff Accountant </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">United States Securities and Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mail Stop 3561 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 F Street N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington, DC 20549-7010
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Mew and Ms.&nbsp;Di Silvio: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We are in receipt of your letter dated January&nbsp;12, 2012 regarding our Form 10-K for the fiscal year ended September&nbsp;24, 2011 filed December&nbsp;2, 2011. Our responses to your comments are
provided below. We have repeated each of your comments in full and the response to each such comment is noted directly below the quoted comment. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations, page 20 </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Critical Accounting Policies, page 21 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note that you consider the policies and estimates applicable to self insurance reserves to be among your critical accounting policies and estimates. Please expand
your discussion to indicate how accurate your estimates have been in the past and whether they are likely to change in the future. See Item V of SEC Release Nos. 33-8350/34-48960. Also, please revise the notes to your financial statements to provide
a table showing year end balances of the reserve and additions, subtractions and adjustments made during the year. Conversely, you may provide such information as part of your analysis of reserve accounts included in Schedule II to your financial
statements. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: As disclosed in Note 1 of the footnotes to our financial statements the identified
error resulted in the understatement of our self-insurance liabilities over multiple fiscal years through September&nbsp;25, 2010. Although the impact of the errors was not material to any individual year, we believe this indicates that our estimate
of future claim settlements was understated. We have revised our methods for calculating loss development factors that are applied to claims data and believe that the revised methods will result in a more accurate estimate in future years. In
addition to the disclosures in Note 1, our Note 5, &#147;Supplementary Balance Sheet Information &#150; Accrued Expenses and Current Portion of Other Long-Term Liabilities,&#148; lists the year end balances of our
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">February 3, 2012 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"> Page
 2
 </FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
self-insurance liabilities at September&nbsp;24, 2011 and September&nbsp;25, 2010, and total employee insurance expense for each of the fiscal years ended September 2011, 2010 and 2009. We
believe these disclosures meet the requirements of Regulation S-X for financial statements disclosures and schedules. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In
response to the staff&#146;s comment and Item V of SEC Release Nos. 33-8350/34-48960, in future filings we will revise our critical accounting policy for self-insurance to include the following statement: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In fiscal 2011 the Company refined its methods for calculating self-insurance liabilities which resulted in a significant increase to
the previously reported estimate. The Company believes the amounts accrued under the revised method are adequate; however, future accruals may fluctuate if historical trends are not predictive of the future. </I></FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Item&nbsp;9A. Controls and Procedures, page 36 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Please tell us if you considered whether or not your original disclosures in management&#146;s annual report on internal controls over financial reporting continue to
be appropriate in light of the restatement of previously reported consolidated financial statements disclosed beginning on page 50 as well as whether you reevaluated the appropriateness of your prior disclosures regarding the effectiveness of your
disclosure controls and procedures. Please revise to supplement your disclosure with any necessary revisions. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: As disclosed in Note 1 to our financial statements, the error in our self-insurance estimate resulted from the
inappropriate application of our loss development factors to claims administrator data and represented 0.7% of total liabilities and reduced net income by approximately 3% in 2009 and 2010. We concluded, based on our evaluation of relevant
quantitative and qualitative factors, that the identified corrections were immaterial to our individual prior period consolidated financial statements. We also considered the impact of the corrections on our disclosures included in our annual report
on internal controls over financial reporting and our disclosures regarding the effectiveness of our disclosure controls and procedures. When making our evaluation of quantitative and qualitative factors we considered the magnitude of the
misstatement resulting from the deficiency; the nature of the deficiency; and the effectiveness of other internal controls over financial reporting. Based on our analysis of these and other factors we determined that the disclosures regarding the
effectiveness of our disclosure controls and procedures continued to be appropriate. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We also note that our independent
auditors are required to assess our internal controls over financial reporting at each year and are required to modify their report if, among other things, elements of our annual report on internal controls are incomplete or improperly presented.
The independent auditors&#146; report as of September&nbsp;24, 2011 did not include any such modification. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">February 3, 2012 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"> Page
 3
 </FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Financial Statements and Notes </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Note 5. Supplementary Balance Sheet Information, page 56 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Refer to the Other Long-Term Liabilities table. Please tell us and disclose the nature of the line item &#147;Non-qualified investment plan liability&#148; within other
long-term liabilities total. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: The Non-qualified investment plan liability relates to our
non-qualified investment plan discussed in Note 9, &#147;Employee Benefit Plans&#148;. The plan provides benefits to certain employees subject to limited participation in our 401(k) feature of our Investment Profit Sharing Plan also described in
Note 9. Cumulative employee and employer contributions to the Nonqualified Investment Plan are recorded in Other Long-Term Liabilities on our Balance Sheet in accordance with plan provisions. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company acknowledges that: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(1) the Company is responsible for the adequacy and accuracy of the disclosure in its filings with the Commission; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(2) the staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to any filing; and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you have any questions or comments regarding the foregoing responses, please contact
the undersigned at 828-669-2941, Ext. 223. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Very truly yours,</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ingles Markets, Incorporated</FONT></P></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Ronald B. Freeman</FONT></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ronald B. Freeman</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></P></TD></TR>
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