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 Leases – Rent expense for all operating leases totaled $2.4 million for the three months ended December 30, 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.

Finance Leases – Finance lease cost of $210.0 thousand included amortization expense of $178.5 thousand, which was included in operating and administrative expense, and $54.7 thousand of interest expense for the three months ended December 30, 2023.


Fiscal Year	Operating Leases		Finance Leases
Remainder of 2024	$	6,370,366	$	630,000
2025		7,744,643		840,000
2026		6,583,312		840,000
2027		5,823,729		840,000
2028		4,281,763		840,000
Thereafter		19,744,204		101,500
Total lease payments	$	50,548,017	$	4,091,500
Less amount representing interest		11,181,366		551,344
Present value of lease liabilities	$	39,366,651	$	3,540,156

There were no lease extensions exercised to increase the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” on the Condensed Consolidated Balance Sheets during the three months ended December 30, 2023. At December 30, 2023, the weighted average remaining lease term for the Company’s operating leases was 13.0 years. The weighted average discount

rate used to determine the operating lease liability balances as of December 30, 2023 was 5.6%, and was 6.0% for finance lease liability balances.

At December 30, 2023, the Company owned and operated 96 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
	December 30, 2023
Rents earned on owned and subleased properties:
Base rentals	$	6,881,658
Variable rentals		50,956
Total		6,932,614
Depreciation on owned properties leased to others		(1,996,250)
Other shopping center expenses		(789,604)
Total	$	4,146,760


Fiscal Year
Remainder of 2024	$	14,872,994
2025		18,259,167
2026		14,703,033
2027		11,473,245
2028		8,751,955
Thereafter		29,603,922
Total minimum future rental income	$	97,664,316