Summary of Significant Accounting Policies

Revenue Recognition

Revenues from product sales are recognized at the point at which control of each product is transferred to the customer. The Company’s contracts contain performance obligations which are satisfied when customers have physical possession of each product. The majority of customer orders are fulfilled within a day and customer payment terms are typically 20 to 60 days from delivery. Shipping and handling activities are costs to fulfill the Company’s performance obligations. These costs are expensed as incurred and presented within operating expenses on the consolidated statements of operations. The Company offers certain sales incentives to customers in the form of rebates or discounts. These sales incentives are accounted as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and records a corresponding reduction in revenue. The Company does not expect a significant reversal in the amount of cumulative revenue recognized. Sales tax billed to customers is not included in revenue but rather recorded as a liability owed to the respective taxing authorities at the time the sale is recognized.

The following table presents the Company’s net sales disaggregated by principal product category:



	Thirteen Weeks Ended								Thirty-nine Weeks Ended
	September 28, 2018				September 29, 2017				September 28, 2018				September 29, 2017
Center-of-the-Plate	$	152,805	42.3	%	$	144,105	44.3	%	$	454,673	43.3	%	$	415,253	44.0	%
Dry Goods	65,269		18.1	%	56,442		17.4	%	185,243		17.6	%	164,023		17.4	%
Pastry	49,219		13.6	%	43,654		13.4	%	144,379		13.7	%	128,483		13.6	%
Cheese and Charcuterie	39,481		10.9	%	32,753		10.1	%	111,497		10.6	%	99,847		10.6	%
Dairy and Eggs	27,511		7.6	%	23,294		7.2	%	77,778		7.4	%	65,324		6.9	%
Oils and Vinegar	19,808		5.5	%	18,360		5.6	%	56,326		5.4	%	53,178		5.6	%
Kitchen Supplies	7,403		2.0	%	6,468		2.0	%	20,657		2.0	%	18,314		1.9	%
Total	$	361,496	100	%	$	325,076	100	%	$	1,050,553	100	%	$	944,422	100	%

The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information.

Deferred Revenue

Certain customer arrangements in the Company’s direct-to-consumer business, including gift card purchases, result in deferred revenues when cash payments are received in advance of performance. Gift cards issued by the Company do not have expiration dates. The Company records a liability for unredeemed gift cards at the time gift cards are sold and the liability is reduced when the card is redeemed, the value of the card is escheated to the appropriate government agency, or through breakage. Gift card breakage is estimated based on the Company’s historical redemption experience and expected trends in redemption patterns. Amounts recognized through breakage represent the portion of the gift card liability that is not subject to unclaimed property laws and for which the likelihood of redemption is remote.

The following table presents the changes in deferred revenue, reflected as accrued liabilities on the Company’s consolidated balance sheets:



Balance as of December 29, 2017	$	1,283
Cash payments received	11,046
Net sales recognized	(11,476		)
Balance as of September 28, 2018	$	853

Right of Return

The Company’s standard terms and conditions provide customers with a right of return if the goods received are not merchantable. Customers are either issued a replacement order at no cost, or are issued a credit for the returned goods. The Company recorded a refund liability of $288 as of September 28, 2018. Refund liabilities are reflected as accrued liabilities on the consolidated balance sheets. The Company recognized a corresponding asset of $181 as of September 28, 2018 for its right to recover products from customers on settling its refund liabilities. This asset is reflected as inventories, net on the consolidated balance sheets.

Contract Costs

Sales commissions are expensed when incurred because the amortization period is one year or less. These costs are presented within operating expenses on the Company’s consolidated statements of operations.