Albertsons 2016 Annual Report Download - page 103

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NOTE 15—SEGMENT INFORMATION
Refer to the Consolidated Segment Financial Information for financial information concerning the Company’s operations and
financial position 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 three reportable segments: Wholesale,
Save-A-Lot and Retail. These reportable segments are three distinct businesses, each with a different customer base, marketing
strategy and management structure. The Company reviews its reportable segments on an annual basis, or more frequently if
events or circumstances indicate a change in reportable segments has occurred.
The Wholesale reportable segment derives revenues from wholesale distribution and services to independently owned retail
food stores and other customers (collectively referred to as “independent retail customers”). The Save-A-Lot reportable
segment derives revenues from the sale of groceries at retail locations operated and licensed by the Company (both the
Company’s own stores and stores licensed by the Company to which the Company distributes wholesale products). The Retail
reportable segment derives revenues from the sale of groceries and other products at retail locations operated by the Company.
Substantially all of the Company’s operations are domestic.
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 owned, licensed and franchised retail stores to shoppers and through its Wholesale segment to
independent retail customers. The following table provides additional detail on the amounts and percentages of Net sales for
each group of similar products sold in the Wholesale, Save-A-Lot and Retail segments, and service agreement revenue in
Corporate:
2016 2015 2014
Wholesale:
Nonperishable grocery products(1) $ 5,753 33% $ 5,939 33% $ 6,000 35%
Perishable grocery products(2) 2,025 12 2,099 12 1,951 11
Services to independent retail customers and other 157 1 160 1 151 1
7,935 45% 8,198 46% 8,102 47%
Save-A-Lot:
Nonperishable grocery products(1) $ 2,956 17% $ 2,989 17% $ 2,823 17%
Perishable grocery products(2) 1,597 9 1,587 9 1,373 8
Services to licensees and other 70 — 65 — 59 —
4,623 26% 4,641 26% 4,255 25%
Retail:
Nonperishable grocery products(1) $ 2,607 15% $ 2,677 15% $ 2,600 15%
Perishable grocery products(2) 1,549 9 1,574 9 1,463 9
Pharmacy products 511 3 510 3 491 3
Fuel 67 — 83 — 67 —
Other 35 — 40 — 34 —
4,769 27% 4,884 27% 4,655 27%
Corporate:
Transition services revenue $ 202 1% $ 194 1% $ 240 1%
Net sales $ 17,529 100% $ 17,917 100% $ 17,252 100%
(1) Includes such items as dry goods, dairy, frozen foods, beverages, general merchandise, home, health and beauty care and candy
(2) Includes such items as meat, produce, deli and bakery
Segment operating earnings include revenues and costs attributable to each of the respective business segments and allocated
corporate overhead, based on the segment's estimated consumption of corporately managed resources. Variances to planned
corporate overhead allocated to business segments remain in Corporate because allocated corporate overhead affecting segment