Albertsons 2011 Annual Report Download - page 12

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
Normal operating fluctuations in working capital 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 and stores licensed by the Company, as well as the stores of independent retail customers it
supplies, to compete successfully with other retail food stores. Principal competition comes from traditional
grocery retailers, including regional and national chains and independent food store operators, and non-
traditional retailers, such as supercenters, membership warehouse clubs, specialty supermarkets, drug stores,
discount stores, dollar stores, convenience stores and restaurants. The Company believes that the principal
competitive factors faced by its own stores and stores licensed by the Company, as well as the stores of
independent retail customers it supplies, include price, quality, assortment, brand recognition, store location,
in-store marketing and merchandising, promotional strategies and other competitive activities.
The traditional wholesale distribution component of the Company’s Supply chain services business competes
directly with a number of traditional grocery wholesalers. The Company believes it competes in this business
on the basis of price, quality, assortment, schedule and reliability of deliveries, service fees and distribution
facility locations.
Employees
As of February 26, 2011, the Company had approximately 142,000 employees. Approximately
88,000 employees are covered by collective bargaining agreements. During fiscal 2011, 61 collective
bargaining agreements covering approximately 17,000 employees were renegotiated and 37 collective
bargaining agreements covering approximately 2,000 employees expired without their terms being
renegotiated. Negotiations are expected to continue with the bargaining units representing the employees
subject to those expired agreements. During fiscal 2012, 59 collective bargaining agreements covering
approximately 26,000 employees will expire. The majority of employees covered by these expiring collective
bargaining agreements are located in the Southern California and Pennsylvania markets. 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 healthcare 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. Upon the expiration of collective bargaining
agreements with employees, work stoppages could occur if we are unable to negotiate new contracts. A
prolonged work stoppage at a significant number of stores may have a material impact on the Company’s
business, financial condition or results of operations.
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