Albertsons 2008 Annual Report Download - page 12

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The Company registers a substantial number of its trademarks/service marks in the United States Patent and
Trademark Office, including many of its private-label product trademarks and service marks. U.S. trademark and
service mark registrations are generally for a term of 10 years, renewable every 10 years as long as the trademark
is used in the regular course of trade. The Company considers certain of its trademarks and service marks to be of
material importance to its Retail food and Supply chain services businesses and actively defends and enforces
such trademarks and service marks.
Working Capital
At February 23, 2008, working capital consisted of $4,327 in current assets, calculated after adding back the
LIFO reserve of $180, and $4,607 in current liabilities. Normal operating fluctuations in these balances can result
in changes to cash flow from operations presented in the Consolidated Statements of Cash Flows that are not
necessarily indicative of long-term operating trends. There are no unusual industry practices or requirements
relating to working capital items.
Competition
The Company’s Retail food and Supply chain services businesses are highly competitive. The Company believes
that the success of its Retail food and Supply chain services businesses are dependent upon the ability of its own
stores, as well as the third-party retail stores it supplies, to compete successfully with other retail food stores.
Principal competition comes from regional and national chains operating under a variety of formats that devote
square footage to selling groceries (i.e., combination food and pharmacy stores, food stores, limited assortment
food stores, membership warehouse clubs, dollar stores, drug stores, convenience stores, various formats selling
prepared foods and other specialty and discount retailers), as well as from independent food store operators. The
Company believes that the principal competitive factors faced by its own stores, as well as the third-party retail
stores it supplies, include the location and image of the store, the price, quality and variety of products and the
quality and consistency of service.
The traditional distribution component of the Company’s Supply chain services business competes directly with
a number of grocery wholesalers. The Company believes it competes in this business on the basis of product
price, quality and assortment, schedule and reliability of deliveries, the range and quality of services provided,
service fees and the location of distribution facilities. The Company’s third-party logistics network competes
nationwide in a highly fragmented marketplace, which includes a number of large international and domestic
companies, as well as many smaller, more regional competitors. The Company believes that it competes in this
business on the basis of warehousing and transportation logistics expertise, cost and the ability to offer both asset
and non-asset based solutions as well as to design and manage a customer’s entire supply chain.
Employees
At February 23, 2008, the Company had approximately 192,000 employees. Approximately 120,000 employees
are covered by collective bargaining agreements. During fiscal 2008, 72 collective bargaining agreements
covering approximately 38,500 employees were renegotiated. During fiscal 2008, 22 collective bargaining
agreements covering approximately 7,200 employees expired without their terms being renegotiated.
Negotiations are expected to continue with the bargaining units representing the employees subject to those
agreements. During fiscal 2009, 99 collective bargaining agreements covering approximately 34,300 employees
will expire. The Company is focused on ensuring competitive cost structures in each market in which it operates
while meeting its employees’ needs for attractive wages and affordable health care and retirement benefits. The
Company believes that it has generally good relations with its employees and with the labor unions that represent
employees covered by collective bargaining agreements.
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