Harris Teeter 2008 Annual Report Download - page 6

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2
long-range goals, in strengthening management personnel and their operations and financing. Management of
each subsidiary is responsible for implementing operating policies and reports directly to management of the
Company.
Harris Teeter
As of September 28, 2008, Harris Teeter operated 176 supermarkets located in North Carolina (127),
Virginia (28), South Carolina (9), Maryland (3), Tennessee (3), Delaware (2), District of Columbia (2), Florida (1)
and Georgia (1). These supermarkets offer a full assortment of groceries, produce, meat and seafood, delicatessen
items, bakery items, wines and non-food items such as health and beauty care, general merchandise and floral.
In addition, Harris Teeter operated pharmacies in 112 of their supermarkets as of September 28, 2008. Retail
supermarket operations are supported by two company-owned distribution centers and one company-owned
dairy production facility. Other than milk and ice cream produced by the company-owned facility, Harris Teeter
purchases most of the products it sells, including its private label brands, from outside suppliers or directly from
the manufacturers. Harris Teeter’s sales constituted 92% of the Company’s consolidated sales in fiscal 2008
(91% in fiscal 2007 and 89% in fiscal 2006).
The supermarket industry is highly competitive. Harris Teeter competes with local, regional and national
food chains along with independent merchants. In addition to the more traditional food stores, Harris Teeter
also competes with discount retailers (including supercenters that carry a full line of food items), many of which
are larger in terms of assets and sales. In the past several years, considerable consolidation of competitors has
taken place in the supermarket industry which has reduced the number of local food chains and independent
merchants. Additionally, some discount supercenter operators, such as Wal-Mart and Target, are continuing
to expand and offer more items typically found in supermarket formats. As a result, Harris Teeter is likely to
compete with more, larger food chains in its markets. Principal competitive factors include store location, price,
service, convenience, cleanliness, product quality and product variety. No one customer or group of related
customers has a material effect upon the business of Harris Teeter.
As of September 28, 2008, Harris Teeter employed approximately 10,300 full-time and 11,800 part-time
individuals, none of whom were represented by a union. Harris Teeter considers its employee relations to be
good.
American & Efird, Inc.
A&E is one of the world’s largest global manufacturers and distributors of industrial sewing thread,
embroidery thread and technical textiles, produced from natural and synthetic fibers. Manufacturers of apparel,
automotive materials, home furnishings, medical supplies and footwear rely on A&E industrial sewing thread
to manufacture their products. A&E’s primary products are industrial sewing thread, embroidery thread and
technical textiles sold through its employed sales representatives, commissioned agents and distributors. A&E
also distributes sewing supplies manufactured by other companies. A&E sales constituted 8% of the Company’s
consolidated sales in fiscal 2008 (9% in fiscal 2007 and 11% in fiscal 2006).
A majority of A&E’s sales are industrial thread for use in apparel products. The apparel market is made up
of many categories servicing both genders and diverse age groups, including jeanswear, underwear, menswear,
womenswear, outerwear, intimate apparel, workwear and childrenswear. A&E also manufactures industrial
thread for use in a wide variety of non-apparel products including home furnishings, automotive, footwear,
upholstered furniture, sporting goods, caps and hats, gloves, leather products, medical products and tea bag
strings.
Headquartered in Mt. Holly, North Carolina, the company operated six modern manufacturing facilities
in North Carolina and six distribution centers strategically located in the United States as of the fiscal year
ended September 28, 2008. The manufacturing facilities have been designed for flexibility and efficiency to
accommodate changing customer product demands.