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 occupying 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 considered in computing minimum lease payments.

Operating Leases – Rent expense for all operating leases totaled $1.7 million for the three months ended December 28, 2024. 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 $45.1 thousand of interest expense for the three months ended December 28, 2024.


Fiscal Year		Operating Leases		Finance Leases
Remainder of 2025	$	4,488,048	$	630,000
2026		5,123,022		840,000
2027		4,557,095		840,000
2028		3,018,504		840,000
2029		2,029,928		101,500
Thereafter		15,641,087		—
Total lease payments	$	34,857,684	$	3,251,500
Less amount representing interest		8,706,906		356,485
Present value of lease liabilities	$	26,150,778	$	2,895,015

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 28, 2024. At December 28, 2024, the weighted average remaining lease term for the Company’s operating leases was 15.0 years. The weighted average discount rate used to determine the operating lease liability balances as of December 28, 2024 was 4.0%, and was 6.0% for finance lease liability balances.

At December 28, 2024, the Company owned and operated 100 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
		December 28, 2024
Rents earned on owned and subleased properties:
Base rentals	$	6,598,742
Variable rentals		78,502
Total		6,677,244
Depreciation on owned properties leased to others		(2,155,209)
Other shopping center expenses		(1,109,066)
Total	$	3,412,969


Fiscal Year
Remainder of 2025	$	15,344,855
2026		16,836,353
2027		13,408,795
2028		10,845,522
2029		7,708,824
Thereafter		26,541,336
Total minimum future rental income	$	90,685,685