Albertsons 2013 Annual Report Download - page 12

Private-Label Products
The Company’s private-label products are produced to the Company’s specification by many suppliers and
compete in many areas of the Company’s stores. Private-label products include: the premium brand Culinary
Circle™, which offers unique, premium quality products in highly competitive categories; first tier brands,
including Essential Everyday™, Wild Harvest™, Flavorite™, Richfood™, equaline™, HomeLife™ and several
others, which provide shoppers quality national brand equivalent products at a competitive price; and the value
brand, Shopper’s Value™, which offers budget conscious consumers a quality alternative to national brands at
substantial savings.
Trademarks
The Company offers some independent retail customers the opportunity to franchise a concept or license a
service mark. This program helps these customers compete by providing, as part of the franchise or license
program, a complete business concept, group advertising, private-label products and other benefits. The
Company is the franchisor or licensor of certain service marks such as CUB FOODS, SAVE-A-LOT, SENTRY,
FESTIVAL FOODS, COUNTY MARKET, SHOP ’N SAVE, NEWMARKET, FOODLAND, JUBILEE,
SUPERVALU and SUPERVALU PHARMACIES. In conjunction with its licensing and franchise arrangements,
the Company maintains wholesale distribution agreements with its licensees and franchisees, primarily under the
Save-A-Lot and Cub Foods banners.
In connection with the Albertsons Acquisition, the Company entered into a trademark license agreement with
Albertson’s LLC, the purchaser of the non-core supermarket business of Albertsons, under which Albertson’s
LLC was allowed to use legacy Albertsons trademarks related to the NAI Banners that the Company sold,
such as ALBERTSONS, SAV-ON and LUCKY. Pursuant to the Stock Purchase Agreement, the Company
entered into certain cross-licensing arrangements and assignments for certain tradenames and trademarks
associated with the NAI Banner Sale, which permits each of the Company and NAI and their affiliates to use
tradenames and trademarks that are owned by the respective parties as is necessary for the operation of their
respective businesses. These tradenames and trademarks include private-label products.
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, Save-A-Lot and Independent Business segments 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 Independent Business, Retail Food and Save-A-Lot segments operate in a highly competitive
environment. The Company believes that the success of its Independent Business, Retail Food and Save-A-Lot
segments 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
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