Albertsons 2011 Annual Report Download - page 68

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’s business is classified by management into two
reportable segments: Retail food and Supply chain services. These reportable segments are two distinct
businesses, one retail and one wholesale, each with a different customer base, marketing strategy and
management structure. The Retail food reportable segment is an aggregation of the Company’s retail operating
segments, which are organized based on format (traditional retail food stores and hard-discount food stores).
The Retail food operating segments are aggregated as the products sold in the grocery stores are substantially
the same, focusing on food and related products; the customer or potential customer for each of the retail
operating segments is the same, any consumer of food and related products; each of the retail operating
segments use the same distribution method for its products, the sale of items through grocery stores; and all of
the Company’s retail operating segments are subject to similar regulation. Additionally, the retail operating
segments are aggregated into one Retail food reportable segment as they have similar economic characteristics
and are expected to have similar long-term financial performance, based on operating earnings as a percent of
sales.
The Retail food reportable segment derives revenues from the sale of groceries at retail locations operated by
the Company (both the Company’s own stores and stores licensed by the Company). The Supply chain services
reportable segment derives revenues from wholesale distribution to independently owned retail food stores,
mass merchants and other customers (collectively referred to as “independent retail customers”) and logistics
support services.
The Company offers a wide variety of nationally advertised brand name and private-label products, primarily
including grocery (both perishable and nonperishable), general merchandise and health and beauty care,
pharmacy and fuel, which are sold through the Company’s own and licensed retail food stores to shoppers and
through its Supply chain services business to independent retail customers. The amounts and percentages of
Net sales for each group of similar products sold in the Retail food and Supply chain services segments
consisted of the following:
2011 2010 2009
Retail food:
Nonperishable grocery products
(1)
$ 15,546 41% $ 17,233 43% $ 18,031 41%
Perishable grocery products
(2)
8,076 22 8,655 21 9,963 23
General merchandise and health and beauty care products
(3)
1,794 5 2,081 5 2,738 6
Pharmacy products 2,391 6 2,541 6 2,701 6
Fuel 596 2 581 2 645 1
Other 508 1 546 1 586 1
28,911 77 31,637 78 34,664 78
Supply chain services:
Product sales to independent retail customers 8,400 22 8,788 22 9,595 21
Services to supply chain customers 223 1 172 — 305 1
8,623 23 8,960 22 9,900 22
Net sales $ 37,534 100% $ 40,597 100% $ 44,564 100%
(1) Includes such items as dry goods, beverages, dairy, frozen foods, and candy
(2) Includes such items as meat, produce, deli and bakery
(3) Includes such items as household products, over-the-counter medication, beauty care, personal care, seasonal items and
tobacco
NOTE 15—DIVESTITURE
During the fourth quarter of fiscal 2011, the Company divested the Total Logistic Control business for $205 in
cash and recognized a $62 pre-tax gain. The gain is related to the Supply chain services segment and was
recorded as a component of Selling and administrative expenses in the Consolidated Statements of Earnings.
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