Harris Teeter 2009 Annual Report Download - page 6

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2
Harris Teeter
As of September 27, 2009, Harris Teeter operated 189 supermarkets located in North Carolina (132),
Virginia (33), South Carolina (11), Maryland (3), Tennessee (4), 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 118 of their supermarkets as of September 27, 2009. 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 store brand products, from outside suppliers or directly from
the manufacturers. Harris Teeter’s sales constituted 94% of the Company’s consolidated sales in fiscal 2009
(92% in fiscal 2008 and 91% in fiscal 2007).
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. The consolidation of competitors within the supermarket industry that has
occurred over the past several years 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 27, 2009, Harris Teeter employed approximately 10,000 full-time and 11,900 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 6% of the Company’s
consolidated sales in fiscal 2009 (8% in fiscal 2008 and 9% in fiscal 2007).
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, A&E operated six modern manufacturing facilities in
North Carolina and four distribution centers strategically located in the United States as of the fiscal year
ended September 27, 2009. Subsequent to the end of fiscal 2009, A&E completed the consolidation of one
of its manufacturing facilities into one of its other North Carolina operations, thus reducing the number of
manufacturing facilities in North Carolina to five. The manufacturing facilities have been designed for flexibility
and efficiency to accommodate changing customer product demands.
A&E also has wholly-owned operations in Canada, China, Colombia, Costa Rica, El Salvador, England,
Honduras, Hong Kong, Italy, Mexico, Malaysia, The Netherlands, Turkey, Poland and Slovenia; majority-owned
joint ventures in China (two), Dominican Republic and South Africa; minority interest in ventures with ongoing
operations in Bangladesh, Brazil, India and Sri Lanka; and a 50% ownership interest in a joint venture in China.