Albertsons 2012 Annual Report Download - page 83

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NOTE 14—SEGMENT INFORMATION
Refer to the Consolidated Segment Financial Information for financial information concerning the Company’s
operations by reportable segment.
The Company’s operating segments reflect the manner in which the business is managed and how the Company
allocates resources and assesses performance internally. The Company’s chief operating decision maker is the
Chief Executive Officer.
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 Independent business. 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 two retail
operating segments, which are organized based on format (traditional retail food stores and hard-discount food
stores), based on similar quantitative and qualitative characteristics.
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 both 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 Independent business
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”).
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
Independent business to independent retail customers. The amounts and percentages of Net sales for each group of
similar products sold in the Retail food and Independent business segments consisted of the following:
2012 2011 2010
Retail food:
Nonperishable grocery products (1) $ 15,062 42% $ 15,546 41% $ 17,233 43%
Perishable grocery products (2) 7,797 22 8,076 22 8,655 21
Pharmacy products 2,353 6 2,391 6 2,541 6
General merchandise and health and beauty care
products (3) 1,654 5 1,794 5 2,081 5
Fuel 564 1 596 2 581 2
Other 476 1 508 1 546 1
27,906 77 28,911 77 31,637 78
Independent business:
Product sales to independent retail customers 8,182 23 8,400 22 8,788 22
Services to independent retail customers 12 — 223 1 172 —
8,194 23 8,623 23 8,960 22
Net sales $ 36,100 100% $ 37,534 100% $ 40,597 100%
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