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 $2.5 million for the three months ended June 29, 2024 and $7.6 million for the nine months ended June 29, 2024. 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.

Finance Leases – Finance lease cost of $630.0 thousand included amortization expense of $535.5 thousand, which was included in operating and administrative expense, and $156.9 thousand of interest expense for the nine months ended June 29, 2024.


Fiscal Year		Operating Leases		Finance Leases
Remainder of 2024	$	1,976,594	$	210,000
2025		7,820,676		840,000
2026		6,659,345		840,000
2027		5,899,762		840,000
2028		4,357,796		840,000
Thereafter		20,478,331		101,500
Total lease payments	$	47,192,504	$	3,671,500
Less amount representing interest		10,638,257		449,088
Present value of lease liabilities	$	36,554,247	$	3,222,412

On the Condensed Consolidated Balance Sheets, purchases of leased properties offset by lease extensions exercised during the nine months ended June 29, 2024 decreased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities”. At June 29, 2024, the weighted average remaining lease term for the Company’s operating leases was 13.0 years. The weighted average discount rate used to determine operating lease liability balances as of June 29, 2024 was 5.275%, and was 6.0% for finance lease liability balances.

At June 29, 2024, the Company owned and operated 97 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 Condensed 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 Condensed Consolidated Statements of Income.


		Three Months Ended		Nine Months Ended
		June 29, 2024		June 29, 2024
Rents earned on owned and subleased properties:
Base rentals	$	6,751,937	$	20,454,733
Variable rentals		50,955		152,867
Total		6,802,892		20,607,600
Depreciation on owned properties leased to others		(2,021,286)		(6,054,656)
Other shopping center expenses		(864,435)		(2,857,149)
Total	$	3,917,171	$	11,695,795


Fiscal Year
Remainder of 2024	$	5,144,208
2025		19,328,706
2026		15,603,242
2027		12,225,135
2028		9,308,601
Thereafter		32,303,185
Total minimum future rental income	$	93,913,077