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 $2.0 million and $3.7 million for the three and six months ended March 29, 2025, respectively. 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 $420.0 thousand included amortization expense of $357.0 thousand, which was included in operating and administrative expense, and $87.7 thousand of interest expense for the six months ended March 29, 2025.



Fiscal Year		Operating Leases		Finance Leases
Remainder of 2025	$	2,992,032	$	420,000
2026		5,992,190		840,000
2027		5,482,431		840,000
2028		3,943,840		840,000
2029		2,955,264		101,500
Thereafter		16,625,088		—
Total lease payments	$	37,990,845	$	3,041,500
Less amount representing interest		9,218,765		313,893
Present value of lease liabilities	$	28,772,080	$	2,727,607

Lease extensions exercised during the six months ended March 29, 2025 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $4.1 million on the Condensed Consolidated Balance Sheets as of March 29, 2025. At March 29, 2025, the weighted average remaining lease term for the Company’s operating leases was 14.1 years. The weighted average discount rates used to determine operating lease liability balances and finance lease liability balances were 4.3% and 6.0%, respectively.

At March 29, 2025, the Company owned and operated 101 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		Six Months Ended
		March 29, 2025		March 29, 2025
Rents earned on owned and subleased properties:
Base rentals	$	7,928,216	$	14,526,958
Variable rentals		78,502		157,004
Total		8,006,718		14,683,962
Depreciation on owned properties leased to others		(2,155,209)		(4,310,418)
Other shopping center expenses		(1,129,957)		(2,239,023)
Total	$	4,721,552	$	8,134,521


Fiscal Year
Remainder of 2025	$	10,371,633
2026		17,512,431
2027		14,131,226
2028		11,533,448
2029		8,356,254
Thereafter		28,183,691
Total minimum future rental income	$	90,088,683