Harris Teeter 2008 Annual Report Download - page 8

4
report should not rely solely on the forward-looking statements and should consider all uncertainties and risks
throughout this report. The statements are representative only as of the date they are made, and we undertake no
obligation to update any forward-looking statement.
All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future
results may differ materially from those set forth in our forward-looking statements. We face risks that are
inherent in the businesses and the market places in which Harris Teeter and A&E operate. The following
discussion sets forth certain risks and uncertainties that we believe could cause actual future results to differ
materially from expected results. In addition to the factors discussed below, other factors that might cause our
future financial performance to vary from that described in our forward-looking statements include: (i) changes
in federal, state or local laws or regulations; (ii) cost and stability of energy sources; (iii) cost and availability
of energy and raw materials; (iv) management’s ability to predict accurately the adequacy of the Company’s
present liquidity to meet future financial requirements; (v) continued solvency of any third parities on leases
the Company has guaranteed; (vi) management’s ability to predict the required contributions to the pension
plans of the Company; (vii) the Company’s requirement to impair recorded goodwill; (viii) changes in labor and
employee benefit costs, such as increased health care and other insurance costs; (ix) ability to recruit, train and
retain effective employees and management in both of the Company’s operating subsidiaries; (x) the extent and
speed of successful execution of strategic initiatives; (xi) volatility of financial and credit markets which would
affect access to capital for the Company; and (xii) unexpected outcomes of any legal proceedings arising in the
normal course of business of the Company. Additional risks and uncertainties not presently known to us or that
we currently deem immaterial also may impair our business operations and also could cause actual results to
differ materially from those included, contemplated or implied by the forward-looking statements made in this
report, and the reader should not consider any of the above list of factors and the following discussion to be a
complete set of all potential risks or uncertainties.
Risks Related to Harris Teeter
The Supermarket Industry is Highly Competitive
The supermarket industry is characterized by narrow profit margins and competes on value, location
and service. Harris Teeter faces increased competitive pressure in all of its markets from existing competitors
and from the threatened entry by one or more major new competitors. The number and type of competitors
faced by Harris Teeter vary by location and include: traditional grocery retailers (both national and regional),
discount retailers such as “supercenters” and “club and warehouse stores,” specialty supermarkets, drug stores,
dollar stores, convenience stores and restaurants. In addition, certain Harris Teeter supermarkets also compete
with local video stores, florists, book stores and pharmacies. Aggressive supercenter expansion, increasing
fragmentation of retail formats, entry of non-traditional competitors and market consolidation have further
contributed to an increasingly competitive marketplace.
Additionally, increasingly competitive markets and economic uncertainty have made it difficult generally
for grocery store operators to achieve comparable store sales gains. Because sales growth has been difficult
to attain, Harris Teeter’s competitors have attempted to maintain market share through increased levels of
promotional activities and discount pricing, creating a more difficult environment in which to achieve consistent
sales gains. Some of Harris Teeter’s competitors have greater financial resources and could use these resources
to take measures which could adversely affect Harris Teeter’s competitive position. Accordingly, Harris
Teeter’s business, financial condition or results of operations could be adversely affected by competitive factors,
including product mix and pricing changes which may be made in response to competition from existing or new
competitors.