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The following information should be read together with other information contained in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
−Removed: Coronavirus (COVID-19) Pandemic Impact
−Removed: We are unable to predict the ongoing impact of the coronavirus (COVID-19) pandemic on Company traffic, sales and profitability.
−Removed: The coronavirus (COVID-19) pandemic was declared a national emergency on March 13, 2020 and the Company was classified as an essential business.
−Removed: Since that time the Company has had to continuously alter certain operating procedures to accommodate isolation/social distancing, school and restaurant closures, reduced leisure travel, and increased remote work.
−Removed: At times, some of the Company’s stores were subject to capacity limits, masking requirements, and social distancing measures that incorporated enhanced cleaning, additional protective equipment and the closure of self-service food bars plus in-house dining.
−Removed: During fiscal year 2021, vaccines became widely available and are currently administered in all our pharmacies.
−Removed: As the economy began to recover, we have experienced labor shortages in our stores and distribution center.
−Removed: Truck driver shortages and supply chain disruptions have resulted in occasional product shortages in our stores.
−Removed: Inflation in food and fuel costs have reached levels not experienced in many years.
−Removed: Our sales continue to be above pre-pandemic levels.
−Removed: At the present time, we do not know how long the ongoing impact of the pandemic will influence our daily operations.
−Removed: Any of the foregoing factors, or other effects of the pandemic that are not currently foreseeable, may materially increase costs, negatively impact sales and adversely affect the Company’s financial condition, results of operations, cash flows and its liquidity position
Risks Related to Our Business and Industry
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The Company’s compliance with these regulations may require additional capital expenditures and could adversely affect the Company’s ability to conduct the Company’s business as planned.
−Removed: The Company is subject to federal, state and local laws and regulations relating to zoning, land use, workplace safety, public health, community right-to-know, beer and wine sales, country of origin labeling of food products, pharmaceutical sales and gasoline station operations.
+Added: The Company is subject to federal, state and local laws and regulations relating to zoning, land use, workplace safety, public health, community right-to-know, beer and wine sales, country of origin labeling of food products, pharmaceutical sales and fuel station operations.
Furthermore, the Company’s business is regulated by a variety of governmental agencies, including, but not limited to, the U.S.
Food and Drug Administration, the U.S.
−Removed: Department of Agriculture, and OSHA.
+Added: Department of Agriculture, and the Occupational Safety and Health Administration.
Employers are also subject to laws governing their relationship with employees, including minimum wage requirements, overtime, working conditions, insurance coverage, disabled access, and work permit requirements.
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The Company attempts to increase its energy efficiency during store construction and remodeling using energy-saving equipment and construction.
+Added: Our business, financial condition and results of operations may be materially adversely affected by a resurgence of the COVID-19
+Added: The unprecedented global outbreak of the novel coronavirus (COVID-19) that began in the first quarter of 2020 has adversely impacted economic activity and conditions worldwide, including workforces, liquidity, capital markets, consumer behavior, supply chains and macroeconomic conditions.
+Added: While the COVID-19 pandemic was officially declared to have ended in May 2023,and while the direct effects of the COVID-19 pandemic on our business have significantly lessened during the fiscal year ended September 30, 2023, some effects have continued through the fiscal year ended September 30, 2023, and we may continue to be impacted by the continuing effects of the COVID-19 pandemic, including resurgences and variants of COVID-19 or outbreaks of any new viruses or contagions.
+Added: These impacts may include difficulties and delays in sourcing, transporting and stocking products:
+Added: inabilities to staff our stores and warehouse and distribution facilities at adequate levels to conduct our operations, resulting in store closures or operating hour reductions;
+Added: and incurring significant costs in support of our front-line store team members for enhanced benefits, safety measures and government-mandated wage increases.
+Added: The extent to which a future COVID-19 outbreak could impact our business and operating results in the future depends on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and variants of the virus and the actions to contain or treat their impact, as well as the impact of any new federal, state and local mandates or other regulations associated with COVID-19.
The Company is subject to risks related to information systems and data security.
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These complex systems are an important part of ongoing operations.
−Removed: If the Company were to experience disruption in these systems, did not maintain existing systems properly, or did not
−Removed: implement new systems appropriately, operations could suffer.
+Added: If the Company were to experience disruption in these systems, did not maintain existing systems properly, or did not implement new systems appropriately, operations could suffer.
The Company is currently undergoing a systematic program to enhance its information technology abilities.
The Company has implemented procedures to protect its information technology systems and data necessary to conduct ongoing operations.
−Removed: The Company cannot however, be certain that all of these systems and data are entirely free from vulnerability to attack.
+Added: The Company cannot, however, be certain that all these systems and data are entirely free from vulnerability to attack.
Compliance with tougher privacy and information security laws and standards, including protection of customer debit and credit card information, may result in higher investments in technology and changes to operational processes.
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This trend places a higher reliance on effective and efficient information systems.
−Removed: The Company is affected by the availability and wholesale price of gasoline and retail gasoline prices, all of which can fluctuate quickly and considerably.
+Added: The Company is affected by the availability and wholesale price of fuel and retail fuel prices, all of which can fluctuate quickly and considerably.
The Company operates fuel stations at 108 of its store locations.
−Removed: While the Company obtains gasoline and diesel fuel from several different suppliers, long-term disruption in the availability and wholesale price of gasoline for resale could have a material adverse effect on the Company’s business, financial condition and/or results of operations.
+Added: While the Company obtains gasoline and diesel fuel from several different suppliers, long-term disruption in the availability and wholesale price of fuel for resale could have a material adverse effect on the Company’s business, financial condition and/or results of operations.
Fluctuating fuel costs could adversely affect the Company’s operating costs which depend on fuel for the Company’s fleet of tractors and trailers which distribute goods from the Company’s distribution facility and for the Company’s fluid dairy operations.
−Removed: Furthermore, fluctuating fuel costs could have an adverse effect on the Company’s total gasoline sales (both in terms of dollars and gallons sold), the profitability of gasoline sales, and the Company’s plans to develop additional fuel centers.
+Added: Furthermore, fluctuating fuel costs could have an adverse effect on the Company’s total fuel sales (both in terms of dollars and gallons sold), the profitability of fuel sales, and the Company’s plans to develop additional fuel centers.
Also, retail gas price volatility could diminish customer usage of fueling centers and, thus, adversely affect customer traffic at the Company’s stores.
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Inflation could impact the Company’s operations.
−Removed: As the economy recovers from the initial impact of the COVID-19 pandemic, inflation has recently reached levels not experienced in decades.
−Removed: Food and energy costs have increased, reflecting a tight labor market and supply chain/transportation issues.
The following table from the United States Bureau of Labor Statistics lists annualized changes in the Consumer Price Index that could have an effect on the Company’s operations.
One of the Company’s significant costs is labor, which increases with general inflation.
−Removed: Inflation or deflation in energy costs affects the Company’s gasoline sales, distribution expenses and plastic supply costs.
+Added: Inflation or deflation in energy costs affects the Company’s fuel sales, distribution expenses and plastic supply costs.
During fiscal year 2023, inflation reached its highest level in a number of years, impacting food costs, transportation costs, and labor costs.
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UNRESOLVED STAFF COMMENTS
+Added: CYBERSECURITY
+Added: Not currently applicable.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.