XML 31 R16.htm IDEA: XBRL DOCUMENT
v3.20.2

LEASES | 12 Months Ended
--- | ---
Jul. 25, 2020
Leases [Abstract] |
LEASES | LEASES Description of leasing arrangements The Company leases 33 retail stores, as well as a production distribution center (the "PDC"), the corporate headquarters and equipment at July 25, 2020. The majority of initial lease terms range from 20 to 30 years. Most of the Company’s leases contain renewal options at increased rents of five years each at the Company’s sole discretion. These options enable Village to retain the use of facilities in desirable operating areas. Each renewal option is evaluated when recognizing the lease right-of-use assets and liabilities, and the Company utilizes the lease term for which it is reasonably certain to use the underlying asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company is obligated under all leases to pay for real estate taxes, utilities and liability insurance, and under certain leases to pay additional amounts based on maintenance and a percentage of sales in excess of stipulated amounts. The Company accounts for rent holidays, escalating rent provisions, and construction allowances on a straight-line basis over the term of the lease. The composition of total lease cost is as follows:
|  |  | Years ended |  |
| Consolidated Statement of Operations Classification |  | July 25, 2020 |  |
Operating lease cost | Operating and administrative expense |  | $ | 22,911 |  |  |
Finance lease cost |  |  |  |  |
Amortization of leased assets | Depreciation and amortization |  | 947 |  |  |
Interest on lease liabilities | Interest expense |  | 2,059 |  |  |
Variable lease cost | Operating and administrative expense |  | 16,473 |  |  |
Total lease cost |  |  | $ | 42,390 |  |  |
As of July 25, 2020, finance lease right-of-use assets of $13,753 are included in property, equipment and fixtures, net in the Company's consolidated balance sheet. Maturities of operating and finance lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, are as follows as of July 25, 2020:
|  | Operating leases |  | Finance leases |  | Total
2021 |  | $ | 34,103 |  |  | $ | 2,689 |  |  | $ | 36,792 |
2022 |  | 35,555 |  |  | 2,689 |  |  | 38,244 |
2023 |  | 35,186 |  |  | 2,689 |  |  | 37,875 |
2024 |  | 33,298 |  |  | 2,689 |  |  | 35,987 |
2025 |  | 31,950 |  |  | 2,820 |  |  | 34,770 |
Thereafter |  | 242,775 |  |  | 29,081 |  |  | 271,856 |
Total lease payments |  | 412,867 |  |  | 42,657 |  |  | 455,524 |
Less amount representing interest |  | 95,719 |  |  | 19,113 |  |  | 114,832 |
Present value of lease liabilities |  | $ | 317,148 |  |  | $ | 23,544 |  |  | $ | 340,692 |
The Company has approximately $16,671 of future payment obligations related to lease agreements that have not yet commenced but have been executed as of July 25, 2020. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate as the discount rate implicit within its leases is generally not determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis, and incorporates the term and economic environment of the lease. As of July 25, 2020, the Company's lease terms and discount rates are as follows:
| July 25, 2020
Weighted-average remaining lease term (years) |
Operating leases | 13.3
Finance leases | 15.4
Weighted-average discount rate |
Operating leases | 3.9 | %
Finance leases | 8.5 | %
Supplemental cash flow information related to leases is as follows:
|  | 2020 |  |  |  |  |
Cash paid for amounts in the measurement of lease liabilities |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 21,287 |  |  |  |  |  |
Operating cash flows from finance leases |  | 2,059 |  |  |  |  |  |
Financing cash flows from finance leases |  | 572 |  |  |  |  |  |
In the first quarter of fiscal 2020, the Company adopted ASU 2016-02, and as required, the following disclosure is provided for periods prior to adoption. Future minimum lease payments by year and in the aggregate for all non-cancelable leases with initial terms of one year or more consisted of the following at July 27, 2019:
| Capital and financing leases |  | Operating leases
2020 | $ | 5,173 |  |  | $ | 13,573 |
2021 | 5,240 |  |  | 12,972 |
2022 | 5,240 |  |  | 10,348 |
2023 | 5,305 |  |  | 9,747 |
2024 | 5,342 |  |  | 7,457 |
Thereafter | 43,708 |  |  | 61,043 |
Minimum lease payments | 70,008 |  |  | $ | 115,140 |
Less amount representing interest | 28,233 |  |  |
Present value of minimum lease payments | 41,775 |  |  |
Less current portion | 1,022 |  |  |
| $ | 40,753 |  |  |
Related party leases The Company leases a supermarket from a realty firm 30% owned by certain officers of Village. The Company paid rent to related parties under this lease of $688 in both fiscal 2020 and 2019, and has a related lease obligation of $3,772 at July 25, 2020. This lease expires in fiscal 2021 with options to extend at increasing annual rent. The Company has ownership interests in three real estate partnerships. Village paid aggregate rents to two of these partnerships for leased stores of $1,556 and $1,455 in fiscal 2020 and 2019, respectively, and has related aggregate lease obligations of $13,179 at July 25, 2020. One of these partnerships is a variable interest entity, which is not consolidated as Village is not the primary beneficiary. This partnership owns one property, a stand-alone supermarket leased to the Company since 1974. Village is a general partner entitled to 33% of the partnership's profits and losses. The Company subleases the Galloway and Vineland stores from Wakefern under sublease agreements which provided for combined annual rents of $1,355 in both fiscal 2020 and 2019, and has related aggregate lease obligations of $3,521 at July 25, 2020. Both leases contain normal periodic rent increases and options to extend the lease.
LEASES | LEASES Description of leasing arrangements The Company leases 33 retail stores, as well as a production distribution center (the "PDC"), the corporate headquarters and equipment at July 25, 2020. The majority of initial lease terms range from 20 to 30 years. Most of the Company’s leases contain renewal options at increased rents of five years each at the Company’s sole discretion. These options enable Village to retain the use of facilities in desirable operating areas. Each renewal option is evaluated when recognizing the lease right-of-use assets and liabilities, and the Company utilizes the lease term for which it is reasonably certain to use the underlying asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company is obligated under all leases to pay for real estate taxes, utilities and liability insurance, and under certain leases to pay additional amounts based on maintenance and a percentage of sales in excess of stipulated amounts. The Company accounts for rent holidays, escalating rent provisions, and construction allowances on a straight-line basis over the term of the lease. The composition of total lease cost is as follows:
|  |  | Years ended |  |
| Consolidated Statement of Operations Classification |  | July 25, 2020 |  |
Operating lease cost | Operating and administrative expense |  | $ | 22,911 |  |  |
Finance lease cost |  |  |  |  |
Amortization of leased assets | Depreciation and amortization |  | 947 |  |  |
Interest on lease liabilities | Interest expense |  | 2,059 |  |  |
Variable lease cost | Operating and administrative expense |  | 16,473 |  |  |
Total lease cost |  |  | $ | 42,390 |  |  |
As of July 25, 2020, finance lease right-of-use assets of $13,753 are included in property, equipment and fixtures, net in the Company's consolidated balance sheet. Maturities of operating and finance lease liabilities, including options to extend lease terms that are reasonably certain of being exercised, are as follows as of July 25, 2020:
|  | Operating leases |  | Finance leases |  | Total
2021 |  | $ | 34,103 |  |  | $ | 2,689 |  |  | $ | 36,792 |
2022 |  | 35,555 |  |  | 2,689 |  |  | 38,244 |
2023 |  | 35,186 |  |  | 2,689 |  |  | 37,875 |
2024 |  | 33,298 |  |  | 2,689 |  |  | 35,987 |
2025 |  | 31,950 |  |  | 2,820 |  |  | 34,770 |
Thereafter |  | 242,775 |  |  | 29,081 |  |  | 271,856 |
Total lease payments |  | 412,867 |  |  | 42,657 |  |  | 455,524 |
Less amount representing interest |  | 95,719 |  |  | 19,113 |  |  | 114,832 |
Present value of lease liabilities |  | $ | 317,148 |  |  | $ | 23,544 |  |  | $ | 340,692 |
The Company has approximately $16,671 of future payment obligations related to lease agreements that have not yet commenced but have been executed as of July 25, 2020. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate as the discount rate implicit within its leases is generally not determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis, and incorporates the term and economic environment of the lease. As of July 25, 2020, the Company's lease terms and discount rates are as follows:
| July 25, 2020
Weighted-average remaining lease term (years) |
Operating leases | 13.3
Finance leases | 15.4
Weighted-average discount rate |
Operating leases | 3.9 | %
Finance leases | 8.5 | %
Supplemental cash flow information related to leases is as follows:
|  | 2020 |  |  |  |  |
Cash paid for amounts in the measurement of lease liabilities |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 21,287 |  |  |  |  |  |
Operating cash flows from finance leases |  | 2,059 |  |  |  |  |  |
Financing cash flows from finance leases |  | 572 |  |  |  |  |  |
In the first quarter of fiscal 2020, the Company adopted ASU 2016-02, and as required, the following disclosure is provided for periods prior to adoption. Future minimum lease payments by year and in the aggregate for all non-cancelable leases with initial terms of one year or more consisted of the following at July 27, 2019:
| Capital and financing leases |  | Operating leases
2020 | $ | 5,173 |  |  | $ | 13,573 |
2021 | 5,240 |  |  | 12,972 |
2022 | 5,240 |  |  | 10,348 |
2023 | 5,305 |  |  | 9,747 |
2024 | 5,342 |  |  | 7,457 |
Thereafter | 43,708 |  |  | 61,043 |
Minimum lease payments | 70,008 |  |  | $ | 115,140 |
Less amount representing interest | 28,233 |  |  |
Present value of minimum lease payments | 41,775 |  |  |
Less current portion | 1,022 |  |  |
| $ | 40,753 |  |  |
Related party leases The Company leases a supermarket from a realty firm 30% owned by certain officers of Village. The Company paid rent to related parties under this lease of $688 in both fiscal 2020 and 2019, and has a related lease obligation of $3,772 at July 25, 2020. This lease expires in fiscal 2021 with options to extend at increasing annual rent. The Company has ownership interests in three real estate partnerships. Village paid aggregate rents to two of these partnerships for leased stores of $1,556 and $1,455 in fiscal 2020 and 2019, respectively, and has related aggregate lease obligations of $13,179 at July 25, 2020. One of these partnerships is a variable interest entity, which is not consolidated as Village is not the primary beneficiary. This partnership owns one property, a stand-alone supermarket leased to the Company since 1974. Village is a general partner entitled to 33% of the partnership's profits and losses. The Company subleases the Galloway and Vineland stores from Wakefern under sublease agreements which provided for combined annual rents of $1,355 in both fiscal 2020 and 2019, and has related aggregate lease obligations of $3,521 at July 25, 2020. Both leases contain normal periodic rent increases and options to extend the lease.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration