Albertsons 2008 Annual Report Download - page 15

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sell products at its retail locations or to its distribution customers, (ii) decreases in sales volume due to increased
difficulty in selling the Company’s products and (iii) difficulty in attracting and retaining customers. Any of
these outcomes could adversely affect the Company’s financial condition and results of operations.
In addition, the nature and extent of consolidation in the retail food and food distribution industries could affect
the Company’s competitive position or that of the Company’s distribution customers in the markets the Company
serves. Although the retail food industry as a whole is highly fragmented, certain segments are currently
undergoing some consolidation, which could result in increased competition and significantly alter the dynamics
of the retail food marketplace. Such consolidation may result in competitors with greatly improved financial
resources, improved access to merchandise, greater market penetration and other improvements in their
competitive positions. Such business combinations could result in the provision of a wider variety of products
and services at competitive prices by such consolidated companies, which could adversely affect the Company’s
financial condition and results of operations.
Food and drug safety concerns and related unfavorable publicity may adversely affect the Company’s
sales and results of operations.
There is increasing governmental scrutiny and public awareness regarding food and drug safety. The Company
could be adversely affected if consumers lose confidence in the safety and quality of the Company’s food and
drug products. Any events that give rise to actual or potential food contamination, drug contamination or food-
borne illness could result in product liability claims and a loss of consumer confidence. In addition, adverse
publicity about these types of concerns whether valid or not, may discourage consumers from buying the
Company’s products or cause production and delivery disruptions, which could have an adverse effect on the
Company’s sales and results of operations.
If the Company fails to realize the synergies from combining the Company’s businesses with the businesses
the Company acquired from Albertsons in a successful and timely manner, it may have an adverse effect
on the Company’s business, financial condition and results of operations.
The Company may not be able to realize the synergies, business opportunities and growth prospects anticipated
in connection with the Acquisition. The Company may experience increased competition that limits the
Company’s ability to expand its business, the Company may not be able to capitalize on expected business
opportunities, including retaining the Company’s current customers, assumptions underlying estimates of
expected cost savings may be inaccurate or general industry and business conditions may deteriorate. In addition,
combining certain of the Company’s operations with the Acquired Operations has required significant effort and
expense. Personnel have left and may continue to leave or be terminated because of the Acquisition. The
Company’s management may have its attention diverted as it continues to combine certain operations of both
companies. If these factors limit the Company’s ability to combine such operations successfully or on a timely
basis, the Company’s expectations of future results of operations, including certain cost savings and synergies
expected to result from the Acquisition, may not be met. If such difficulties are encountered or if such synergies,
business opportunities and growth prospects are not realized, it may have an adverse effect on the Company’s
business, financial condition and results of operations.
The Company’s inability to open and remodel a significant number of stores as planned could have an
adverse effect on the Company’s financial condition and results of operations.
In fiscal 2009, pursuant to the Company’s 2009 capital plan, the Company expects to complete 165 major store
remodels, and open approximately 15 new traditional supermarkets and 55 to 65 limited assortment food stores,
including licensed stores. If, as a result of labor relations issues, supply issues or environmental and real estate
delays, a significant number of these capital projects do not stay reasonably within the time and financial budgets
that the Company has forecasted, the Company’s financial condition and results of operations could be adversely
affected. Furthermore, the Company cannot ensure that the new or remodeled stores will achieve anticipated
results. As a result, the Company’s inability to open and remodel a significant number of stores as planned could
have an adverse effect on the Company’s financial condition and results of operations.
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