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 includes one or more renewal options and requires 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 $2.6 million for the three months ended June 24, 2023 and $7.9 million for the nine months ended June 24, 2023. This amount included short-term (less than one year) leases, common area expenses, and variable lease costs, all of which were insignificant. Cash paid for lease liabilities in operating activities approximates operating lease cost.


Fiscal Year
Remainder of 2023	$	2,184,792
2024		8,529,542
2025		7,728,835
2026		6,446,887
2027		5,596,637
Thereafter		23,702,054
Total lease payments	$	54,188,747
Less amount representing interest		11,191,758
Present value of lease liabilities	$	42,996,989

On the Condensed Consolidated Balance Sheets, lease extensions exercised less leased properties purchased during fiscal year 2023 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $8.1 million each during the nine months ended June 24, 2023. The weighted average remaining lease term for the Company’s operating leases is 12.4 years. The weighted average discount rate used to determine lease liability balances as of June 24, 2023 was 3.51%, based on the most recent Company financings collateralized by store properties.

At June 24, 2023, the Company owned and operated 94 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		Nine Months Ended
		June 24, 2023		June 24, 2023
Rents earned on owned and subleased properties:
Base rentals	$	6,253,778	$	18,195,857
Variable rentals		41,722		125,167
Total		6,295,500		18,321,024
Depreciation on owned properties leased to others		(1,687,761)		(5,022,314)
Other shopping center expenses		(1,153,180)		(2,691,145)
Total	$	3,454,559	$	10,607,565


Fiscal Year
Remainder of 2023	$	4,638,034
2024		17,266,469
2025		15,472,751
2026		11,984,528
2027		9,207,995
Thereafter		32,202,357
Total minimum future rental income	$	90,772,134