Note 6 - Leases

12 Months Ended

Jul. 28, 2012

Notes

Note 6 - Leases

NOTE 6 — LEASES

Description of leasing arrangements

The Company leased twenty-four stores at July 28, 2012, including five that are capitalized for financial reporting purposes. The majority of initial lease terms range from 20 to 30 years.

Most of the Company’s leases contain renewal options at increased rents of five years each. These options enable Village to retain the use of facilities in desirable operating areas. Management expects that in the normal course of business, most leases will be renewed or replaced by other leases. The Company is obligated under all leases to pay for real estate taxes, utilities and liability insurance, and under certain leases to pay additional amounts based on maintenance and a percentage of sales in excess of stipulated amounts.

Future minimum lease payments by year and in the aggregate for all non-cancelable leases with initial terms of one year or more consist of the following at July 28, 2012:

	Capital and financing leases	Operating Leases
2013	$4,026	$10,956
2014	4,045	10,416
2015	4,284	10,117
2016	4,491	8,823
2017	4,491	6,141
Thereafter	83,963	48,689
Minimum lease payments	105,300	$95,142
Less amount representing interest	64,508
Present value of minimum lease payments	40,792
Less current portion
	$40,792

The following schedule shows the composition of total rental expense for the following years:

	2012	2011	2010
Minimum rentals	$10,625	$8,625	$8,269
Contingent rentals	882	881	933
`	$11,507	$9,506	$9,202

Related party leases

The Company leases a supermarket from a realty firm 30% owned by certain officers of Village. The Company paid rent to related parties under this lease of $640, $615, and $595 in fiscal 2012, 2011, and 2010, respectively. This lease expires in fiscal 2016 with options to extend at increasing annual rents.

The Company has ownership interests in three real estate partnerships. Village paid aggregate rents to two of these partnerships for leased stores of $801, $764, and $781 in fiscal 2012, 2011, and 2010, respectively.

One of these partnerships is a variable interest entity, which is not consolidated as Village is not the primary beneficiary. This partnership owns one property, a stand-alone supermarket leased to the Company since 1974. Village is a general partner entitled to 33% of the partnerships profits and losses.

The Company leases the Galloway and Vineland stores from Wakefern under sublease agreements which provide for combined annual rent of $1,227. Both leases contain normal periodic rent increases and options to extend the lease.