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Leases and Rental Expense

12 Months Ended

Sep. 28, 2024

Leases and Rental Expense [Abstract]

5. Leases and Rental Expense

The Company conducts part of its retail operations from leased facilities. The initial term of the leases is generally 20 years. The majority of the leases include one or more renewal options and provide that the Company pay property taxes, utilities, repairs and certain other costs incidental to occupation of the leased premises. Several leases contain clauses calling for percentage rentals based upon gross sales of the supermarket occupying the leased space. Step rent provisions, escalation clauses, capital improvements and other lease concessions are taken into account in computing lease payments. Operating lease expense is recognized on a straight-line basis over the minimum lease term.

Operating Leases - Rent expense for all operating leases of $9.7 million, $10.6 million and $10.9 million for fiscal years 2024, 2023 and 2022, respectively, is included in operating and administrative expenses. These amounts 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. Sub-lease rental income of $0.3 million for each of fiscal years 2024, 2023 and 2022, was included as a reduction of rental expense.

Finance Leases – Fiscal year 2024 finance lease cost of $318.5 thousand included amortization expense of $275.6 thousand, included in operating and administrative expense, and $82.3 thousand of interest expense. Finance lease cost of $270.7 thousand included amortization expense of $231.3 thousand, included in operating and administrative expense, and $87.2 thousand of interest expense for fiscal year 2023. No finance lease cost was incurred during fiscal year 2022.

Future maturities of lease liabilities as of September 28, 2024 were as follows:



Fiscal Year		Operating Leases		Finance Leases
2025	$	6,065,926	$	840,000
2026		5,171,179		840,000
2027		4,602,012		840,000
2028		3,060,046		840,000
2029		2,082,223		101,500
Thereafter		17,897,558		—
Total lease payments		38,878,944		3,461,500
Less amount representing interest		9,606,289		401,562
Present value of lease liabilities	$	29,272,655	$	3,059,938

On the Consolidated Balance Sheets, lease extensions exercised during fiscal year 2024 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $6.2 million each during the year ended September 28, 2024. The weighted average remaining lease term for the Company’s operating leases is 14.9 years. No new financing leases were entered into during fiscal year 2024. The weighted average discount rate used to determine operating lease liability balances as of September 28, 2024 was 3.9%, and was 6.0% for finance lease liability balances.