Note 3 Inventories

Merchandise inventories, as of December 31, 2016 and December 26, 2015, were valued as follows:



(dollars in thousands)		2016		2015
LIFO	$	223,294	$	181,321
Average cost		53,489		48,078
	$	276,783	$	229,399

Management believes the use of the LIFO method for valuing certain inventories represents the most appropriate matching of costs and revenues in the Company’s circumstances. If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $79,128,000 and $81,347,000 higher than as reported on the above methods as of December 31, 2016 and December 26, 2015, respectively. During 2015, the Company had certain decrements in its LIFO pools, which had an insignificant impact on the cost of sales.