smart & final stores, inc. (sfs)

by:Yucai     2020-04-27
Use these links to quickly view the content stability document of the US Securities and Exchange Commission, Washington, D. C. C. 20549FORM 10-K(Mark One)
Annual reports submitted under sections 13 or 15 (d)
Securities Trading Act for the fiscal year ended December 30, 2018 under sections 13 or 15d)
Document Number of the 19-34 Securities Trading Act on the transition period from Commission: 001-
36626 smart terminal stores(
The exact name of the registrant specified in the articles of association)Delaware(
State or other jurisdiction of company or organization)80-0862253(I. R. S.
Employee Identification Number)
600 Citadel Drive Commerce, California (
Main executive office address)90040(Zip Code)
The telephone number of the registrant, including the area code :(323)869-
7500 securities registered under section 12 (b)
Part of the act: ownership of each class name of each exchange registered with common stock, valued at $0.
PershareNew York stock exchange registered under section 12thg)
Key points of the act: if the registrant is healthy, a non-indicby check mark
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By checking the mark to indicate whether the registrant has electronically submitted each interactive data file that needs to be submitted in accordance with Rule 405 --T (§232.
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As at June 17, 2018, the subsidiary was approximately $144,005,225.
Indicates the number of outstanding shares of each class of common stock of the registrant as of the latest practicable date.
Ordinary shares were outstanding in March 12, 2019 at $0.
001parvalue76, 524,529 documents incorporated by reference: part of the final proxy statement of the 2019 annual shareholders meeting of the registrant incorporated in the Annual Report on form 10 by reference
The place of representation.
Such proxy statements will be submitted to the Securities and Exchange Commission within 120 days of the end of the registrant\'s fiscal year as at December 30, 2018.
Table contentable CONTENTSPageForward-
View statement s3 part iitem 1 business 5 item 1 factork factors17item 1 bunresolved employee comment 34 item 2 property 34 item 3 legal action s35item 4 Registrant security disclosure 35 part related shareholder matters and issuer purchase equity securities 36 items 6 Selected Financial Data 36 items 7 Management Discussion and Analysis of Financial Position and Results of Operations Section ii iiiitem 10 directors on market risk56item 8 financial statements and supplementary data Information and information Information ii, executive Officer and Corporate Governance 120 item 11 executive compensation 120 item 12 safety ownership of certain beneficial owners and management and related shareholders Matters120Item13Certain relationship and related financial statements schedule
K. Summary of content forwarding signature1262 table-
Take a look at the discussion in this Annual Report on form 10K (
This annual report)
Including forwarding under s1, 1A, 2, 3, 7 and 7A of this agreement
A statement in the sense of federal securities law.
All statements except historical fact statements contained in this annual report, including statements about Smart & Final Stores, Inc.
Subsidiaries (
\"Company\", \"we\" and \"our \")
Future operational results and financial position, business strategy and management plans and objectives for future operations are forward-looking
Look at the report.
In many cases, you can identify the forward
Statements in terms such as \"possible\", \"should\", \"expected\", \"planned\", \"expected\", \"possible\", \"intended\", \"objective, \"Project\", \"consider\", \"believe\", \"estimate\", \"forecast\", \"potential\" or \"continue\", or the negation of these terms or other similar expressions. Theforward-
The forward-looking statements contained in this annual report reflect our views on future events and are affected by risks, uncertainties, assumptions and environmental changes that may lead to our actual results, significantly different from performance or achievement expressed or implied in any forwarding --
Statement.
Despite our belief, the expectations reflected in the future
The statements in this annual report are reasonable and we cannot guarantee future events, results, performance or achievements.
Many important factors may lead to significant differences in actual results from the results indicated previously
Forward-looking statements in this year\'s report, including but not limited to those described in the \"risk factors\" of item 1a and item vii, \"Management\'s Discussion and Analysis of the financial position and results of operations\" by partII \".
Some key factors that may lead to actual results that are different from our expectations include: fierce competition in our industry, and our failure to compete successfully may adversely affect our sales, financial status and operating results;
Our growth depends on the opening of new stores, and our failure to successfully open new stores or successfully manage potential difficulties associated with store growth may adversely affect our business and share price;
Real or perceived quality or food safety issues may adversely affect our business, operational results and reputation;
We may not be able to maintain or increase similar store sales, which may adversely affect our business and share price;
Inflation and deflation may affect our net sales, inventory, cost of goods sold, and gross profit margin and operating leverage;
Our store\'s current geographic concentration and net sales increase the risk of a local or regional recession or catastrophic event;
Disruption of serious supplier relationships may adversely affect our business;
Any major disruption in the operation of our distribution center or ordinary operators may undermine our ability to deliver products in a timely manner;
We do not comply with laws, rules and regulations that affect us and our industry and may adversely affect our financial position and operational results;
Disruption or security loopholes involving our information technology systems may compromise our ability to operate our business;
We have significant debt servicing obligations and may generate additional debt in the future, which may adversely affect our financial position and operational results and our responsiveness to business changes;
The content of our debt agreement limits our operational flexibility;
If our goodwill is damaged, we may be required to charge a significant impairment fee for the income.
Readers are asked to consider these factors carefully in assessing the future.
Forward-looking statements in this year\'s report and remind against excessive reliance on these forward-looking statements
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All the strikers.
Forward-looking statements in this annual report are based on the information we have obtained on the date of this annual report.
We have no obligation to update or modify any forwarding publicly
Forward-looking statements, whether due to new information, future events or other reasons, unless otherwise required by law.
Table 4 ContentsPART iitem 1. Business.
Who are we? we are value.
Consumer-facing food retailers offer diverse and dynamic services to home and business customers through two complementarystore banners.
Our smart and financial stores focus on home and business customers, our smart food services (
Used to be called Cash & Carry Smart Food Service)
The store mainly focuses on business customers.
As of 2018, we are 326 convenient to operate.
Member, small size-box, warehouse-
The style stores are all over the western United States and run another 15 stores in northwestern Mexico through a joint venture.
We have a differentiated sales strategy that emphasizes high quality perishable foods, a variety of private label products, products customized for business and food service customers, and products of various product sizes, with low prices on a daily basis.
\"As of December 30, 2018, we have operated 260 smart supermarkets in California, Arizona and Nevada, offering expanded options for fresh perishable foods and daily groceries, as well as targeted food service options, packaging and cleaning products under national and private label brands.
Customers can choose from a wide range of product sizes, including a wide range of standard sizes
Large-sized products usually found in traditional grocery stores, as well as products of various sizes (
Including unique national brand products)
Warehouse club style stores are typical.
The pricing goal of our smart supermarket is to be significantly lower than the traditional grocery store and compete with the pricing of large discount store operators and warehouse clubs.
We believe that the products we offer are of higher quality and lower price than those of large discount stores.
We also believe that our smart & Finalstores offer better day-to-day value to home and business customers than typical warehouse clubs, offering more product options at competitive pricesto-shop format.
We have extra service in both the supermarket and supermarket!
There are also legacySmart & Finalstores.
Starting at the end of 2008, we launched a transformation program to convert our larger legacySmart & Finalstores to ourExtra! format.
OurExtra has a huge storefront and a wide selection of goods!
Format one-
Stop shopping experience, over 16,000 SKUs, 4,000 SKUs more than our legacySmart & Finalstores, with a focus on perishable foods and household items.
We have operated an additional 201 units as of December 30, 2018!
Of these, 105 stores represent the conversion or repositioning of legacySmart & finalstores, and 96 represent the opening of the new store.
Our additional number has increased significantly in recent years!
Mainly through our acquisition of dedicated perishable food warehouses, our acquisition of a batch of stores in fiscal 2016, and our ability to distribute and in-
Shop sales.
Continuous development of OurExtra!
Store format, relocate legacySmart & Finalstores to additional stores with additional new store openings and extensions!
The store format is expected to become the cornerstone of the future growth of supermarkets and Finalbanner.
As of December 30, 2018, we have also operated 66 smart catering service companies, focusing mainly on various other catering services such as restaurants, catering service companies and food trucks and cafes.
We provide customers with the opportunity to purchase daily catering services when they are convenient and unnecessary
Warehouse shopping environment.
The stores are located in Washington, Oregon, Northern California, Idaho, Montana, Nevada and Utah.
The price of our smart food service store has been significantly lower than our food service delivery competitors, and the price is more transparent to customers without the minimum order size.
Prices also compete with typical warehouse clubs that do not have a membership fee requirement.
Since the end of 2014, we have opened 14 new smart food service stores in existing and new market areas, and actively seek more growth opportunities for this store banner.
5 ContentsInboth store banner sheet, we are actively investing in increasing online sales including direct delivery to customers through partner services and online purchasesin-storemodels.
We offer direct delivery or pickup services as of December 30, 2018in-
Shop options that cover almost our entire geographic area, and complete these orders at more than 98% of smart financial stores and smart food service stores.
We believe that our \"daily low prices\", unique sales strategies and convenient geographic location enable us to deliver differentiated food shopping experiences for diverse and dynamic customer groups.
The company history and structure Market and Finnair are one of the longest-running food retailers in the United States and have become an iconic brand in the market we serve.
We were founded in Los Angeles in 1871 as Herman.
Haas grocery company, a company that provides wholesale groceries for businesses.
At the beginning of 1900, after we merged with Santa Ana grocery, We renamed it Smart & Final wholesale grocery, which was owned by J. S. Smart and H. D. Final.
Over the next few years, we have expanded supermarkets and supermarkets throughout California, Nevada and Arizona.
We acquired Portland, Oregon in 1998.
Chain of intelligent catering services.
We have been operating as amulets since we acquired food services.
Food retailers.
In October 5, 2012, we founded Delaware in the name of sf cc Holdings, Inc.
We changed our name to Smart & Final Stores, Inc. onJune16, 2014.
We are established by Ares Management, an affiliate fund of L. P. (
God of War management]
In November 15, 2012, we acquired all outstanding shares of smart & Final Corp.
, The former Final parent company of all our operating subsidiaries (
\"Acquisition of God of War \").
Related to the acquisition of Ares, each of the Ares Company Opportunity Fund III, LP.
Opportunity Fund 4, L with AresP. (
Together, \"Ares \")
In exchange for shares of our common stock, we have made an equity contribution.
In 2014 months, we completed the initial public offering of common stock.
As of December 30, 2018, Ares holds approximately 60% of our common stock.
We are a holding company and all our business is carried out through our operating subsidiaries, mainly Smart & Final StoresLLC and Cash & CarryStoresLLC (
Direct wholly owned subsidiary of Smart & Final StoresLLC).
Our industry intelligence and financial stores operate in the competitive USS.
The food retail industry includes a variety of distribution channels including traditional grocery stores, mass retailers, warehouse clubs, discount stores, specialty stores, online stores, etc.
Only retailers and online retail hybrid models that combine numbers and entitiesand-mortar stores.
We believe that with the popularity of digital buying, customers are becoming more and more fond of retail options that represent value and convenience, and our smart & Finalbanner stores are in a good position in the market.
Our smart food service operates primarily in the United States. S.
Food service supply industry including various distribution channels, including food service delivery company, warehouse club
Specialty stores, online retailers and other specialty stores. The U. S.
The food service market continues to benefit from increased consumer spending on food. away-from-
Consumers seek greater convenience.
We believe that our intelligent catering service providers can provide quality services to our catering service customers including small restaurants, dining cars, catering service providers and day care operators.
We believe that many of these customers need smaller contenteorder s6 tables
Customers who provide room service, such as larger restaurants
The convenience and choice we offer.
What sets us apart is that we believe that as food shoppers focus more on value and convenience, the following competitive advantages enable us to continue to grow: a unique platform to attract family and business customers.
We serve customers of different groups, including families, businesses and community groups, through our complementary smart & FinalandSmart food service anners.
We focus on quality and value to provide a differentiated, highly convenient shopping experience.
We offer a simpleto-shop, no-frills, in-
Compared to the typical warehouse club, the physical footprint of the store environment is smaller, but the SKU selection is more, which simplifies the customer\'s shopping experience and speeds up the customer\'s shopping experience.
Sales staff at OurSmart & Finalstores benefit from a large number of different business customers.
Our in-house surveys and analysis show that our business customers typically shop and shop for their home and business needs, accounting for about 30% of our smart and shopping sales.
On average, these business customers spend about twice the cost of each visit (
Including purchase of householdSKUs)
As our typical family client
We believe that our family customers like to \"shop with professionals\" because it enhances the perception of value, quality, and choice.
In the smart catering service, we believe that our business customers will appreciate our convenient location and a consistent shopping experience, where they shop every day and meet additional business needs.
Features and value
Key items offered through two store banners.
Our smart and Finalstores offer a full range of grocery products at \"daily low prices\", including high quality perishable foods, a large number of private label and national brand products, and a large selection of warehouse clubspack sizes (More than 3,800 SKUs).
There are about 16,000 SKUs in ourExtra!
In our legacySmart & Finalstores, each of our smart & Finalstore formatting programs offers a wider range of products than typical warehouse clubs.
Our smart supermarket pricing goal is to be significantly lower than the traditional grocery store and compete with the pricing of large discount stores and warehouse clubs.
We believe that we offer higher quality products at lower prices compared to large discount stores.
Unlike the warehouseclubs, we do not require customers to pay membership fees.
Our differentiated sales strategy also includes a well-established private brand and a national brand portfolio of a wide range of product sizes.
In the fiscal year 2018, sales of private label products were approximately 28% of smart & finalannersales, and according to the internal survey we commissioned, we estimated that smart & Finalbanner sales were approximately 37%
Including national and own brand products)
It is not usually found in traditional grocers.
Our smart food service provides customers with approximately 8,500 key SKUs for core food service needs, including a large number of high quality perishable foods (
In the fiscal year 2018, sales of smart food services were about 47%)
National brands and private grocery products, as well as related food service equipment and supplies.
Our price target is to be significantly lower than the food service delivery company and to compete with the price of the warehouse club.
We do not need to pay membership fees or minimum purchases for our smart catering service.
We believe that our low prices, wide selection, price transparency and hand-operated capabilities are the value of our supermarket catering service customers.
Choose perishable products.
In addition, we believe that our customers value the convenience of shopping at the time that best suits their business, rather than receiving delivery according to the dealer\'s schedule.
Our commercial customers also frequently use supermarket food services as a convenient source for basic supply or \"filling\"
Products that are missing from the delivery of regular food services, or products of insufficient quantity and/or quality.
We believe that our differentiated sales strategy and continued focus on delivery value enable us to generate loyalty, referrals, and duplication of business.
The continuous development of digital commerce products to provide customers with more convenience.
We are committed to meeting the changing needs of our customers by developing our digital commerce products to meet the needs of consumers for more convenient shopping choices.
We offer these products in a third way.
And our own internal management platform.
Our smart and Finalstores products are available through Instacart, Google Express, and our in-house managed site siteshop. smartandfinal.
Com powered by Instacart.
Our smart food service store products are available through Instacart and our own in-house managed online storein-
Shop click and carry program.
Delivery and pickup as of December 30, 2018
Over 98% of our smart and financial and smart food service stores have up options. Well-
Store positioning, flexible real estate strategy.
As of December 30, 2018, we have operated 326 stores in neighboring states in the western United States. S.
Including 261 stores in the huge and growing California market.
Our long operating history enables us to build a store footprint that is difficult to repeat and provides us with deep institutional knowledge of the local real estate market we operate in.
We have a flexible real estate strategy that we believe enables our stores to achieve strong results in a range of locations.
Our store model is suitable for a wide range of potential websites, including new developments, \"second use\" space previously occupied by other retailers, and non-
Retail sites for retail use.
In addition, our stores attract a wide range of customers in the market we serve, which are often characterized by race and society
Diversified population and economy.
This broad appeal allows us to make a profit in a range of urban and suburban areas, but we usually aim for a highly concentrated trade area.
Our stores, operations and staff all of our stores are designed for convenience, clean, organized, cluttered --free.
Our concrete floors, bright lights, high ceilings and wide shopping passages highlight our warehouse
We focus on efficiency and value.
Typical smart and financial customers drive not far from their home, business and park directly outside our store.
Customers can move quickly and intentionally through our departments and aisles.
In each of our store forms, our products are organized by product category. Our high-
Arrange quality agricultural products in farmers\' markets
The style display, as well as our other home and business items, is organized on the shelves, extending from the floor to about the height of the eye.
Usually, in bulk
Sizedproduct is in stock on the floor-
Club shelves-
Product in the middle shelf and on a single shelf for packing size
Unit items on eyeslevel shelves.
Discounted products, such as our \"buy more, savemore\" discount products, are marked with bright, clear signs.
Typical smart food service consumers visit our stores on their way to and from their business, complete a full shopping trip, or meet \"shopping needs\"
Requirements during \"working days.
Like our intelligence and Finalstores, customers can move quickly and intentionally through our departments and aisles, often loading their products onto low-rise tablets
Style trolley for full case products and large \"sub\"
The original cut of meat.
Our products are organized by product category and customers can choose their products directly from our monitors, including high quality perishable foods.
Our checkout counter is open and does not require our customers to unload their products onto the conveyor belt;
Instead, our employees use their hands.
Handheld scanners scan products quickly to help our customers get the shopping experience as efficiently as possible.
In December 30, 2018, we operated 326 stores in the western United States, including 260 smart stores in California, Arizona and Nevada and 66 smart food service stores in Washington state, Oregon, Southern California and Idaho, montana, Nevada and Utah.
In addition, a joint venture in northwestern Mexico operates 15 legacySmart & Finalstores.
Our stores are mainly located in areas with high concentration of small and medium-sized enterprises.
Shopping malls and boothsalone sites.
We believe that our customer service orientation, and our focus on value pricing and shopping convenience, help us encourage more frequent shop visits than warehouse clubs and average purchase size than traditional grocery stores
The management of our smart and financial store understands the needs of home and business customers, and we emphasize cross-cutting
Functional training to improve our ability to meet customer needs.
The management and staff of our smartfood service estore also focus on customer service, and our more focused business and catering service customer goals allow a higher level of expertise to meet the needs of our customers.
Our culture emphasizes teamwork, responsibility, integrity and respect, and we believe that all of this contributes to our growth and success.
Our training programs cover store operations at all levels from entry level to management, and highlight sales techniques, management and leadership skills, and customer service objectives to ensure the high quality and productivity of employees.
We reward outstanding performance and motivate employees through incentive compensation programs.
We believe that well trained and motivated employees contribute to our consistent high service standards, which helps us maintain our existing stores and successfully open by expanding our operating culture
We believe that we are an attractive place to provide important career development opportunities for our employees.
To support career development, we actively promote and fund continuing education among our employees.
We offer competitive salaries and benefits and believe that active, educated and dedicated staff contribute to customer satisfaction.
Our products and pricing we have a differentiated sales strategy that emphasizes high quality perishable foods and a variety of high quality private label products and national brands, all of which are in a wide range of product sizes
We believe our sales strategy will be attractive and difficult. to-
Match the store experience.
We are committed to \"daily low prices\", which helps to position our smart & FinalandSmart food service store as the preferred destination for our customers.
In our legacySmart & Final, what is their mix ratio for extra sales!
For the fiscal year 2018, Smart and finalsmartfood service stores are as follows: Smart & finalsmartfood service extra!
Legacyperiles36 % 28% 47% yy34 % 36% 33% Beverage17 % 19% 4% paper and packaging 8% 10% 11% restaurant equipment and cleaning supplies 5% 7% 5% Smart and Final store in our national brand sku of smart and Finalstores, including national brand SKUs that we think are home customers buying the most frequently.
Our product selection is designed to meet the regular shopping needs of family customers and the more frequent purchases of commercial customers, basic groceries, produce, 9 catalogues, meat, drinks, food services, packaging and cleaning supplies are included.
Customers can choose from a wide range of product sizes, including a wide range of standard sizes
Usually large size products can be found in traditional grocery stores, and there is a large amount of bulk foodSize products (
Including unique national brand products)
Bigger and more typical
Box Warehouse club designed to provide significantly economical prices.
Our smart and Finalstores have the following departments: production.
We offer a variety of fresh, high-quality fruits and vegetables at the Farmers Market
Style display and expiration-focusedmulti-packs.
We also offer packaged products such as a national brand salad mix and our Sun Harvest®Own brand.
At selected stores, our product department also includes a range of key organic product SKUs. Meat and Deli.
We offer a wide range of national brands and quality beef, poultry, pork and seafood products under our private brand First Street®.
Our meat selection is available in a variety of cutting sizes including individual cutting and hard cuttingto-[Find big words】 sub-
The \"original cut\" is aimed at our catering service customers, but our family customers also like it.
In addition, our deli offers a wide range of ovens.
Grilled chicken, salad and other fresh and delicious meals.
Milk and cheese.
We offer a wide range of milk, yogurt, fresh cheese, ice cream and other dairy products that are sold both at the national brand and First Street, our signature private brand®The Sun of harvest®Simple value®Label. Grocery.
We offer a variety of daily foods including pasta, rice, bread, canned fruits and vegetables, biscuits, spices and oils.
Customers can choose from a variety of product sizes, including individual units, clubs-
Packaging and bulk food.
We sell grocery products under national brands and a variety of our own brands, including First Street®La Roman. ®Montesito®The Sun of harvest®Natural and organic products, simple value®.
We also offer a range of personal care items under the national brand and our Iris®Private label. Beverage.
We offer a wide range of beverage products including hot drinks, bottled water, juice, sports and energy drinks, carbonated soft drinks, and beer, wine and spirits from most of our stores.
We sell products under national brands, on our first Street®And atmosphere®Own brand.
Paper and Packaging.
We offer a wide range of packaging, disposable table top and take out products including paper bags, butter paper, aluminum pans and trays, plastic cups, table top coverings, party gifts and other disposable food containers.
Our products are sold under national and own brand FirstStreet®Simple value®.
Restaurant Equipment and cleaning supplies.
We offer a wide range of restaurant equipment including cookware, cutlery, hot pot and supplies.
We also offer a wide range of cleaning items including mops, brooms and other cleaning items.
We offer products from national brands and our own brands. ®Simple value®.
Intelligent catering service store products we offer a variety of SKUs in the smart catering service store, which are customized according to the core needs of catering service enterprises such as catering, catering and other catering service providers, corporate and community organizations.
Our intelligent food service department has the following departments: the production department.
We offer a variety of fresh, high quality fruits and vegetables arranged in large Walk
In a cold box, large trolleys are installed.
We believe our customers value our ability.
Choose their product, which is a feature that the food service delivery company generally cannot provide.
10 tables of meat and deli.
We offer a wide range of quality beef and pork products.
Our meat selection was also shown on a large walk
There are a variety of cutting sizes in the refrigerator, including separate cutting and large \"sub\"primal cuts.
\"We believe our customers value our capabilities.
Choose their meat products to suit a specific recipe or presentation.
We also offer a full set of frozen partial control products that allow the catering service users to control the cost of the menu.
In addition, our deli offers a wide range of cooked meat and bulk products.
Milk and cheese.
We offer a wide range of fresh cheeses and other dairy products with national brands and our signature private labelbrand First Street®. Grocery.
We offer a wide range of groceries including flour, sugar, spices, rice, fruits and vegetables, sauces and seasonings.
Customers can choose from a wide range of product sizes, including the number of cases and individual units.
We sell grocery products under national brands and a variety of our own brands, including First Street®La Roman. ®Montesito®Simple value®. Beverage.
We offer a wide range of hot and cold drinks including bottled water, juice, soda, sports drinks and energy drinks as well as other products used in the food service industry, syrup supplements include flavored coffee syrup, soda fountain and bar supplies.
We offer products from national brands and our own brands. ®And atmosphere®.
Paper and Packaging.
We offer a wide range of packaging, disposable table top and take out products including paper bags, butter paper, aluminum pans and trays, plastic cups, table top coverings, party gifts and other disposable food containers.
Our products are sold under national and own brands®Simple value®.
Restaurant Equipment and cleaning supplies.
We offer a wide range of restaurant equipment including cookware, cutlery, hot pot, bar and drinks.
We also offer a wide range of cleaning items including mops, brooms and other cleaning items.
We offer products with national brands and our private brands®Simple value®.
Our smart food service store offers a \"number of cases\" or a single flexible combination
Unit sourcing provides a strong differentiator for our food service delivery competitors, who typically only provide \"number of cases \".
Because typical smart food service consumers buy ingredients for further processing into finished products, our customers often buy the same item, but may need different numbers of individual SKUs.
Private label products our private label products are developed to provide our customers with a variety of items unique to our store.
We seek to offer the equivalent or superior quality to national brands at a lower price.
We offer a variety of categories of private label products, over 3,100 SKUs, and our first street label accounts for about 84% of private label sales for the fiscal year 2018.
We believe that our ability and competitive ability to develop high-quality self-branded products is an important part of our products.
Private label products account for 28% of the net sales of our smart and financial stores, and 16% of the net sales of our smart food service stores in 2018 and 2017.
We have a special one.
The home product development team, which focuses on continuing our own brand growth, aims to ensure that we get the right product at the right quality and cost.
Over the past few years, we have invested in strengthening and upgrading our own brands to meet the needs of our family and business customers.
We believe that our smart and financial stores maintain a price position to compete with other value retailers.
Our smart supermarket pricing goal is to be significantly lower than the traditional grocery store and compete with the pricing of large discount stores and warehouse clubs.
We believe that we offer higher quality products at lower prices compared to large discount stores.
We conduct regular price surveys of our main competitors, strive to maintain prices that compete with warehouse clubs and discount stores, and adopt more positive prices for high-quality products to build higher customers
We also believe that our smart & Finalstores offer better day-to-day value to home and business customers than typical warehouse clubs, offering more product options at competitive pricesto-shop format.
Our smart catering service pricing goal is to be much lower than the catering service delivery company, with higher price transparency to customers and no minimum order size.
Direct delivery of our food services competitors usually adjust their customers
Horizontal pricing of higher cost structures including delivery costs.
Prices also compete with typical warehouse clubs and do not require membership fees.
We seek competitive pricing for our products with our stores
Based on competition, we encourage our target customers to buy more demand from our store.
We conduct regular price surveys on our main stores
Base competition including warehouse clubs and warehouses
Food service retailer.
Marketing and advertising our store banner maintains separate marketing and advertising plans for its primary target customers. OurExtra!
LegacySmart & Finalstores share a common marketing and advertising platform with different versions of ads depending on the type and location of the store.
In our store banner, our main way of advertising isand-
Price information designed to enhance the breadth of our product selection and value-
Price positioning of our store.
We advertise across multiple print and digital channels, focusing primarily on the distribution of weekly print notices with the goal of reaching potential customers at subsidiaries
Zip code level based on the trading area defined by each store.
We make different versions of notices for stores in different geographic and competitive areas, newly opened or remodeled stores and special promotional purposes.
In addition to weekly notifications, we also take advantage of the supplementary bi-
Monthly distribution of a separate printed notice for commercial customers.
This commercial Circular contains key commercial SKUs and pricing, with a focus on a wide range of price-sensitive goods for catering services and other commercial customers.
We have one, too.
Store marketing plan that includes the \"label and logo\" program, \"buy more, save more\" discount and special logo for aisle banners.
In addition, we maintain our website, www. smartandfinal.
We offer or promote special offers and coupons.
In order to support our market positioning and drive a visit to smart and financial stores, we take advantage of radio and television commercials during major food holidays.
We are continuing to expand and refine our digital and social media business with a focus on customer identification and positioning and activating customer purchases through our digital commerce platform.
For the new store, the extension of legacySmart & Finalstores will be added extra!
The relocation of stores and stores, we organize a special grand opening activities.
Grand opening usually includes special promotional prices for community reception and specific periods after opening.
We believe that our grand opening event will help familiarize the community of our trade zone with the differentiated products and pricing of ourExtra! stores.
Our main ad is through bi-
Weekly distribution of \"hot orders\" to potential keyfood service customers, which includes pricing specials on key food service 12 Contentsitems.
The distribution is aimed at customers based on the type of business and the proximity to our smart food service store.
We also mail flyers directly to potential customers for special events and distribute them at our smart food service store to attract buyers of specific products.
On our website.
Intelligent catering service
Com, we provide vendor promotions, industry information, videos of successful customers, and a catalog of creating shopping lists.
Include our website address in this annual report, excluding or by reference to information on our website or by access to information through our website, in this annual report.
Product sourcing and distribution product sourcing we manage the purchase of the products we sell and set the standard, we purchase our products from more than 1,200 suppliers and suppliers.
We believe that our scale is sufficient to generate meaningful cost savings in product acquisitions, which is reflected in the commitment of all our stores to \"daily low prices.
We have a lot.
Maintain a long-term partnership with national and own brand suppliers and believe our supplier relationship is strong.
Our strong supplier relationships support our differentiated sales strategy.
Many of our national brands and private brand suppliers have provided us with clubs-pack and bulk-
They don\'t have the size sku available to traditional grocery stores other than single
What we offer is not the unit product sold by the warehouse club.
These products enable us to provide a wider range of product sizes than our competitors and provide significant savings to our customers.
Our smart and Finalstores purchase products from the network of national brand companies, regional and local brands, as well as private label suppliers purchased strategically.
We seek to obtain high quality products at acquisition cost, thus maintaining our pricing target.
We strive to maintain a close working relationship with key suppliers to reduce product and distribution costs, and we believe that our sales volume and growth provide a unique opportunity to achieve continuous synergies.
Our smart and Finalstores do not rely on any individual supplier, and in the fiscal year 2018, no product supplier accounted for more than 2% of our smart and Finalbanner sales costs.
For our 66 smart food service companies, we use a hybrid procurement model to achieve operational efficiency.
Smartfood service agreement specifies all products for our store and we operate under the agreement with the unified grocery store(
Unified Grocer]
Subsidiaries of Supervalu, Inc.
Therefore, the Unified Grocer is the main sourcing and warehouse supplier for our groceries and perishable products.
Where applicable, a unified grocery store purchases products and maintains inventory in its warehouse facilities, filling out orders for smart food service stores as needed.
This arrangement leverages the purchasing power of the unified grocery store and allows our smart food service store to transfer maintenance of warehouse inventory to third parties.
About 81% of product demand (
Measured by cost)
In fiscal 2018 and 2017, our smart food service stores were all made through our relationship with the unified grocery store.
Our smart food service store also buys certain products by reaching an agreement with two other suppliers based on more traditional suppliers.
We believe that these relationships can be replicated in similar economics if necessary.
Product distribution we support our smart supermarkets in California, Arizona and Nevada through our corporate network
Control distribution facilities.
Companies including leasingand-
Special rental facilities operated by third parties
Third party logistics company and sharing third partyParty operation.
Approximately 60% of smart & Finalstore SKUs including perishable products from approximately 66% of California Contentsinour stores
445,000 square feet dry goods distribution center in California commercial and our company-
Operate 241,000 square feet perishableswarehouse at University of California Riverside
Balance of our products (
Including frozen food, deli and selected dry goods)
Provided by a third party-
Operate the distribution system of the distribution center or the manufacturer\'s direct store.
Designed to be flexible, our distribution center and third-party operations network can support growth in the number of SKUs and the number of additional cases.
Buy our store from the company-
Fleet Control warehouse consisting of companies-
Owned and Leased trucks and supplemented by third parties
Transport supplier.
Products delivered by direct stores are delivered by their respective product suppliers.
We regularly evaluate the relative cost of maintaining a product in our distribution system or delivering it through direct store delivery to maintain competitive product sourcing costs.
Our smart food service store provides services mainly through contract service agreements with the unified grocery store, and our store is mainly composed of three unified supermarkets in Portland, Oregon, Seattle, Washington and Stockton, California.
By design, our distribution centers and third-party operations networks have the flexibility to support our expected growth.
We believe we have new store growth opportunities in ourExtra! format.
We have confirmed.
Long-term growth opportunities in our existing markets
Long-term opportunities in neighboring markets.
We believe that our flexible approach to the size of our stores and the ability to leverage a variety of existing real estate provides us with the flexibility to choose a site, including entering new development projects, \"Second-use\" store space previously operated by other retailers, such as traditional grocery stores, office supply stores and e-retailers, and non-
Retail store website for retail stores.
We believe that our value positioning enables us to serve customers of different groups of people, allowing us to flexibly select new websites.
We have strict procedures for the location of new stores, including
Conduct an in-depth analysis of regional demographics, competition, growth potential, modes of transport, grocery consumption and other key criteria.
We have a dedicated, experienced real estate sourcing and development team that is supervised by our senior management members, including our CEO and CFO.
Our senior management members have also gone on.
Conduct on-site inspections prior to approval of any new location.
We are eager to open up a new smart and ultimate extra feature!
Store and relocate one or two legacySmart & Finalstores to an extra location!
Format the store for fiscal 2019 and plan to continue opening more new stores in the foreseeable future.
At the same time, we also plan to expand opportunities on the basis of intelligent catering services.
We expect to open four new smart food service stores in the fiscal year 2019, and continue to open more new stores in the foreseeable future.
Our typical customers are looking for a mix of national brands and private label products on both store banners for sale in a convenient, easy way \"daily low price\"to-shop locations.
We believe that our customers were initially attracted to our stores by our compelling value proposition, a wide selection of home and business products, and shopping convenience.
We also believe that our customer service and unique brand name and private label products are the key factors to retain our customers.
Our smart and Finalstores target home and business customers who account for 70% and 30% of banner sales for the fiscal year 2018, respectively.
We believe that while sales to our business customers of smart & Finalbanner, including restaurant owners, catering suppliers, institutional consumers, offices and community organizations, are lower than sales to home customers, business customers provide 14 Content listings in our store\'s portfolio.
The resulting portfolio creates an environment where both home and business customers have the opportunity to purchase eskus from unique merchandise sales products to meet the greater needs of customers.
Our smart catering service is mainly for commercial customers, including restaurants, catering service providers and various other catering service providers.
We believe that business customers account for 90% of our banner sales in the fiscal year 2018, and for many of them we are the main source of supply.
While our smart catering service is not the main customer target, it also provides services to home customers, which are estimated to account for 10% of our total sales for the fiscal year 2018.
We believe that customers of our smart food services company enjoy our \"daily low price\", our extensive SKU selection, our price transparency, and purchase more quantities at \"case discount\" prices
As of December 30, 2018, Mexico was a party to a joint venture agreement related to the operation of 15 Smart & Finalstores in northwestern Mexico.
We have a 50% interest in the joint venture, and we use equity accounting.
Ourjoint joint venture partner, Grupo Calimax S. A. de C. V.
Run a grocery chain in northwestern Mexico.
TheseSmart & Finaljoint storesare operates in a style similar to our legacySmart & Finalformat store.
We are a party to the product supply agreement with the joint venture under which we supply certain products, mainly private label products, to its stores.
Revenue and other financial information for our two operating departments, Please see note 13 of the audited consolidated financial statements for other parts of this year\'s report, segment information.
The food retail and food service industries are large in scale, highly competitive and highly fragmented.
The competition in our industry is very fierce, and if we can\'t compete successfully, it may adversely affect our sales, financial situation and operating results.
\"Our main competitors include traditional grocery stores such as Albertsen/sifway and Kroger, warehouse clubs such as Costco and Aldi, food service delivery companies such as mass sysco and American food such as Walmat and Target, online retailers such as Amazon and other stores.
Each of these companies competes with us in terms of price, product selection, product quality, convenience, customer service, store form and location or any combination of these factors.
Some of our competitors may have more financial or marketing resources than we do, and may be able to use more resources for sourcing, promoting and selling their products.
These competitors can take advantage of these advantages to take certain measures, including price reduction, which may adversely affect our competitive position, business, financial position and operational results.
Seasonal sales in our business reflect moderate seasonality.
Our average weekly sales fluctuated throughout the year, usually the highest in the second and third fiscal quarters and the lowest in the first fiscal quarter.
15 content insurance and risk management form we use a combination of insurance and self-management
The insurance plan specifies the potential liability and general liability for workers\' compensation (
Including legal procedures related to legal procedures described under \"Risk Factors\", legal procedures may adversely affect our business, financial position and operational results)
Property Insurance, director and officer liability insurance, vehicle liability and employee health-care benefits.
The liability portion associated with the risk we retain is estimated by taking into account historical claims experience, demographic factors, severity factors, and other actuarial assumptions.
Where we keep risk through ourselves
We use insurance or similar arrangements.
Assist management in assessing the financial impact of risk retention.
If future occurrences and claims differ from those assumptions and historical trends, our results may be adversely affected by claims and other costs associated with these plans and policies.
We believe that our intellectual property rights are of great value and contribute to the success of our business.
In particular, our trademarks, including Smart & Final, which we have registered®Smart last Extra!
®Smart catering service with cash®Atmosphere®First Street®Iris. ®La Roman. ®Montesito®Simple value®And harvest the sun®Trademarks are valuable assets and we do not believe in the customer\'s affection for our store.
In addition to our trademarks, we believe in our trade clothing, including the layout, color scheme and other physical features of our store and product display, this is a big part of the atmosphere we create in the store, enabling customers to differentiate our stores and products from the stores and products of their competitors.
For certain risks related to our trademarks and other intellectual property rights, see \"Risk Factors \". We may not be able to fully protect our intellectual property rights, which may harm our business, our finances
\"Information technology systems we have invested heavily in information technology infrastructure, including procurement, reception, inventory, point of sale, digital commerce, warehousing, distribution, accounting, reporting and financial systems.
We will also continue to invest in supply chain systems to increase operational efficiency and scalability and support the flexibility of our growth and sales channels.
All of our stores operate under an integrated information technology platform and we plan to continue to invest in information technology to further strengthen our technology infrastructure.
We are bound by regulations enacted by federal, state and local regulators, including the United StatesS.
Food and Drug Administration and the United StatesS.
Ministry of Agriculture.
These regulations include, but are not limited to, trade practices, pricing practices, labor, health, safety, transportation, environmental protection, including sales with alcoholic beverages, milk, agricultural products, meat products and other foods and hazardous waste disposal and regulations related to distribution.
Compliance with these regulations has historically not had a significant impact on our financial position or on the results of our operations.
In December 30, 2018, we had 12,232 employees, 3,610 of them.
Time and part 8,622-time employees.
Of this total of 10,248 employees, 836 are employed in our smart food service store, 692 are employed in our warehouse and distribution center, and 456 are employed in our companysupport roles.
As of the 30 th, 2018 and 219 employees of smart food services were 16 international members of truck drivers (\"Truck Driver \")
And covered by collective bargaining agreements.
We think we have a good relationship with our employees.
The main executive office of company InformationOur is located in Castle 600, commercial, California 90040 and our telephone number is (323)869-7500.
Our website address is www. smartandfinal. com.
Information on our website or accessed through our website is not incorporated into this year\'s report by reference or any other report or document we submit to the Securities and Exchange Commission. Item1A. Risk Factors.
Certain factors may have a significant adverse effect on our business, financial position, operating results or prospects.
You should carefully consider the risks and uncertainties described below, as well as all other information in this year\'s report, including our consolidated financial statements and related notes.
Any of the following risks may adversely affect our business, financial position, operating results or prospects and lead to a decline in the value of our common stock, which may result in you losing all or part of your investment.
The competition in our industry is very fierce, and if we can\'t compete successfully, it may adversely affect our sales, financial situation and operating results.
We do business in the highly competitive food retail and food service industries.
We compete on a combination of factors such as price, product selection, product quality, convenience, customer service, store format and location, and digital business options.
In our industry, prices are an important driver of consumer choice.
We want our competitors to continue to put pricing pressure, which may adversely affect our ability to maintain margins and sales levels.
We determine our consumer prices based on a number of factors, including a survey of certain competitor prices.
If our competitors change their cost structure and make it impossible for us to compete effectively on a price basis, our financial position and operating results may be adversely affected.
Consumer choice is also driven by product selection and quality, and our success depends to a certain extent on our ability to identify market trends and deliver products that meet customer preferences.
No such trend was found, providing such products or accurately predicting changing customer preferences could lead to a decrease in the number of customer transactions in our store and a decrease in the amount of consumption when customers visit our store.
We are trying to create a convenient and engaging shopping experience for our customers in terms of customer service, store format and location, and digital business options.
If we are not able to provide a convenient and engaging shopping experience, our sales, profit margins and market share may decline, thus adversely affecting our financial position and operating results.
Some of our competitors are actively expanding their number of stores close to our stores in our major market areas, as well as their digital commerce products.
As our competitors increase or expand their physical and digital products, our financial position and operating results may be adversely affected by loss of sales, a decline in market share or an increase in operating costs.
Our main competitors include traditional grocery stores such as Albertsen and Kroger, discount stores and warehouse clubs such as Costco, mass retailers such as Wal-Mart and Target, food such as Sysco, American food and Performance Food Group, Amazon, etc. online retailers and other specialty stores.
Some of our competitors may have more financial or marketing resources than we do, and may be able to use more resources for sourcing, promoting and selling their products.
In addition, some of our competitors do not have Labor organized by the Union, which may reduce labor and welfare costs.
These competitors can take advantage of these advantages to take 17 measures, including price reduction, which may adversely affect our competitive position, business, financial position and operational results.
In addition, significant changes have taken place in retail supermarkets and food services over the past few decades.
Companies such as Wal-Mart, Costco and Aldi have developed a lower cost structure than traditional grocery stores to provide customers with a \"daily low price\" service.
In addition, wholesale stores such as restaurant warehouses provide additional low-cost services
Cooperate in the market they serve.
If our competitors adopt the \"daily low price\" strategy more, we may be forced to lower the price, which will require us to achieve additional cost savings to offset these cuts.
We may not be able to change our cost structure and pricing practices quickly enough to compete successfully in this environment.
Similarly, the retail supermarket industry is experiencing the evolution of digital commerce and delivery options, with several of our competitors adding or expanding online shopping options for their customers.
We may need to invest heavily on digital commerce platforms and execute on them to maintain our competitive position and respond to consumer demand trends.
Our growth depends to a certain extent on the opening of new stores, and our failure to successfully open new stores or successfully manage potential difficulties associated with store growth may adversely affect our business and share prices
Our growth depends to a certain extent on our ability to open new stores and successfully run new ones.
The successful implementation of our growth strategy depends on many factors, many of which are beyond our control, including our ability to effectively find the right place for new stores, negotiate and execute on acceptable terms to ensure and manage the inventory required for the start-up and operation of our new store, hire, train and retain skilled store personnel, promote and market new stores, address competitors, distribution and other challenges in expanding new geographic areas and markets.
Delays or failures in opening new stores or achieving lower than expected sales in new stores may adversely affect our growth.
Even though we believe in the US governmentS.
The market can support additionalSmart and the last special!
We cannot assure you when or if any new stores will be opened.
We may not have the level of cash flow or financing we need to achieve additional growth.
In the event of such a store opening, we cannot assure you that these new stores will be successful or will result in greater sales and profitability.
In addition, our growth will put more demands on our operational, management and administrative resources.
These increased demands may result in us not being able to operate our existing business effectively, which in turn may adversely affect the financial position and results of our existing stores.
In addition, opening new stores in the market of our existing stores may lead to a decrease in sales of these existing stores.
We may also not be able to successfully manage the potential difficulties associated with store growth, including access to scale efficiency, improvement of our systems, ongoing cost discipline, and maintaining the appropriate level of store labor, as well as disciplined product and real estate options, this can lead to stagnation or decline in our operating profits.
If, due to these difficulties, our financial position and results of operations are so declining, we may slow down or stop opening stores, or we may close stores that are not profitable.
Some of our new stores may be located in areas where we are inexperienced or lack brand recognition.
These markets may have different competitive conditions, market conditions, consumer tastes and discretionary consumption patterns compared to our existing markets, which may lead to these new stores being inferior to our existing markets
If we fail to successfully implement our 18 content growth strategies, including the opening of new stores, our financial position and operational results may be adversely affected.
Our continued growth also depends to a certain extent on whether we can successfully extend some of our legacySmart & Finalstores to ourExtra!
Format and relocate some of our intelligence and Finalstores to new locations. stores.
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