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 and $5.2 million for the three and nine months ended June 27, 2026, 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 $649.4 thousand included amortization expense of $552.4 thousand, which was included in operating and administrative expense, and $97.0 thousand of interest expense for the nine months ended June 27, 2026.


Fiscal Year		Operating Leases		Finance Leases
Remainder of 2026	$	1,413,688	$	249,200
2027		5,527,431		996,800
2028		4,092,000		996,800
2029		3,088,424		258,300
2030		1,709,164		156,800
Thereafter		15,742,641		120,394
Total lease payments	$	31,573,348	$	2,778,294
Less amount representing interest		8,048,227		250,352
Present value of lease liabilities	$	23,525,121	$	2,527,942

Lease extensions exercised during the nine months ended June 27, 2026 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $1.9 million on the Condensed Consolidated Balance Sheet as of June 27, 2026. At June 27, 2026, the weighted average remaining lease term for the Company’s operating leases was 15.2 years and, the weighted average discount rates used to determine operating lease and finance lease liability balances were 4.3% and 6.0%, respectively.

At June 27, 2026, the Company owned and operated 102 shopping centers in conjunction with its supermarket operations, including one of the three stores located in a shopping center that remains temporarily closed as a result of damage sustained during Hurricane Helene. 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 27, 2026		June 27, 2026
Rents earned on owned and subleased properties:
Base rentals	$	6,797,397	$	21,731,875
Variable rentals		35,262		105,786
Total		6,832,659		21,837,661
Depreciation on owned properties leased to others		(2,352,645)		(7,067,937)
Other shopping center expenses		(1,416,876)		(3,674,102)
Total	$	3,063,138	$	11,095,622


Fiscal Year
Remainder of 2026	$	5,663,706
2027		20,136,388
2028		17,193,161
2029		13,715,567
2030		11,019,895
Thereafter		50,202,601
Total minimum future rental income	$	117,931,318