The Company conducts part of its retail operations from leased facilities. The initial terms of the leases are generally 20 years. The majority of the leases include one or more renewal options and require that the Company pay property taxes, utilities, repairs and certain other costs incidental to occupation of the premises. Several leases contain clauses that require rental payments based on a percentage of gross sales of the supermarket occupying the leased space. Step rent provisions, escalation clauses and lease incentives are taken into account in computing minimum lease payments.

Operating lease cost for all operating leases totaled $2.7 million for the three months ended March 25, 2023 and $5.3 million for the six months ended March 25, 2023. This amount included short-term (less than one year) leases, common area expenses, and variable lease costs, all of which are insignificant. Cash paid for lease liabilities in operating activities approximates operating lease cost.


Fiscal Year
Remainder of 2023	$	4,369,583
2024		8,030,542
2025		7,229,835
2026		5,947,887
2027		5,097,637
Thereafter		22,704,055
Total lease payments	$	53,379,539
Less amount representing interest		11,234,963
Present value of lease liabilities	$	42,144,576

The weighted average remaining lease term for the Company’s operating leases is 12.7 years. The weighted average discount rate used to determine lease liability balances as of March 25, 2023 was 3.51%, based on our incremental borrowing rate.

At March 25, 2023, the Company owned and operated 92 shopping centers in conjunction with its supermarket operations. The Company leases to others a portion of its shopping center properties. The leases are non-cancelable operating lease agreements for terms ranging up to 20 years.

Rental income is included in the line item “Net sales” on the Consolidated Statements of Income. Depreciation on owned properties leased to others and other shopping center expenses are included in the line item “Cost of goods sold” on the Consolidated Statements of Income.


		Three Months Ended		Six Months Ended
		March 25, 2023		March 25, 2023
Rents earned on owned and subleased properties:
Base rentals	$	5,825,202	$	11,942,079
Variable rentals		41,723		83,445
Total		5,866,925		12,025,524
Depreciation on owned properties leased to others		(1,754,831)		(3,334,553)
Other shopping center expenses		(910,994)		(1,537,965)
Total	$	3,201,100	$	7,153,006


Fiscal Year
Remainder of 2023	$	9,120,094
2024		16,911,437
2025		15,097,395
2026		11,617,994
2027		8,847,337
Thereafter		31,848,431
Total minimum future rental income	$	93,442,688