Albertsons 2008 Annual Report Download - page 11

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The Company believes that its multi-tiered distribution network increases buying scale, improves operating
efficiencies and lowers costs of operations. The Company is continuing to work on business initiatives that will
deliver lower costs of operations. Deliveries to retail stores are made from the Company’s distribution centers by
Company-owned trucks, third-party independent trucking companies or customer-owned trucks. In addition, the
Company provides certain facilitative services between its independent retailers and vendors related to products
that are delivered directly by suppliers to retail stores under programs established by the Company. These
services include sourcing, invoicing and payment services.
Own Brands
The Company’s Own Brands, its private-label goods, are produced to the Company’s specifications by many
suppliers and compete in many areas of the Company’s stores. Own Brands include: the premium brand,
essensia™, which offers unique, premium quality products in highly competitive categories; first tier brands,
including Wild Harvest™, Flavorite™, Richfood™, equaline™, HomeLife™and several others, which provide
shoppers quality national brand equivalent products at a competitive price; and the value brand, Shopper’s
Value™, which offers budget conscious consumers a quality alternative to national brands at substantial savings.
Products
The Company offers a wide variety of grocery products, general merchandise and health and beauty care,
pharmacy, fuel and other items and services. The Company believes that it has adequate and alternative sources
of supply for most of its purchased products. The Company’s consolidated net sales include the net sales of the
Company’s own combination stores, food stores and limited assortment food stores, results of sales to limited
assortment food stores licensed by the Company and the net sales of the Company’s Supply chain services
business, including net sales to affiliated food stores, mass merchants and other customers and logistics support
services.
The amount of consolidated net sales and percentage of consolidated net sales for each group of similar products
and services were as follows:
2008 2007 2006
Grocery products 83% 83% 89%
General merchandise and health and beauty care 8 8 6
Pharmacy 6 6 2
Fuel 1 1 —
Other items and services 2 2 3
Consolidated net sales 100% 100% 100%
Trademarks
The Company offers some customers the opportunity to franchise a concept or license a service mark. This
program helps the customer compete by providing, as part of the franchise or license program, a complete
business concept, group advertising, private-label products and other benefits. The Company is the franchisor or
licensor of certain service marks such as CUB FOODS, SAVE-A-LOT, SENTRY, FESTIVAL FOODS,
COUNTY MARKET, SHOP ‘N SAVE, NEWMARKET, FOODLAND, JUBILEE, SUPERVALU and
SUPERVALU PHARMACIES.
In connection with the Acquisition, the Company entered into a trademark license agreement with Albertson’s
LLC, the purchaser of the non-core supermarket business of Albertsons, under which Albertson’s LLC may use
legacy Albertsons trademarks, such as ALBERTSONS, SAV-ON and LUCKY. Under the trademark
license agreement, Albertson’s LLC is also allowed to enter into sublicense agreements with transferees of
Albertson’s LLC stores, which allows such transferees to use many of the same legacy Albertsons trademarks.
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