Revenue Recognition

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Revenue recognition

REVENUE RECOGNITIONThe Company recognizes revenue when the performance obligation is satisfied, which occurs when a customer obtains control of the promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services. The Company generates substantially all of its revenue from the distribution and sale of food and food-related products and recognizes revenue when title and risk of loss passes to the customer

and the customer accepts the goods, which occurs at delivery. Customer sales incentives, such as volume-based rebates or discounts, are treated as a reduction of revenue at the time the revenue is recognized. Sales taxes invoiced to customers and remitted to governmental authorities are excluded from Net sales. Shipping and handling costs are treated as fulfillment costs and included in distribution, selling and administrative costs.

The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of July 2, 2022 or January 1, 2022. Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $1.8 billion and $1.5 billion as of July 2, 2022 and January 1, 2022, respectively.

The Company has certain customer contracts under which incentives are paid upfront to its customers. These payments have become industry practice and are not related to financing any customer’s business, nor are these payments associated with any distinct good or service to be received from any customer. These incentive payments are capitalized in prepaid expenses and other assets and amortized as a reduction of revenue over the life of the contract or as goods or services are transferred to the customer. The Company’s contract assets for these upfront payments were $27 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of both July 2, 2022 and January 1, 2022, and $29 million and $26 million included in other assets in the Company’s Consolidated Balance Sheets as of July 2, 2022 and January 1, 2022, respectively.

The following table presents the disaggregation of revenue for each of the Company’s principal product categories:

	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Meats and seafood	$	3,286	$	2,951	$	6,236	$	5,213
Dry grocery products	1,485		1,272		2,818		2,365
Refrigerated and frozen grocery products	1,315		1,141		2,494		2,135
Dairy	938		737		1,699		1,359
Equipment, disposables and supplies	895		797		1,706		1,490
Beverage products	431		389		807		713
Produce	477		376		865		683
Total Net sales	$	8,827	$	7,663	$	16,625	$	13,958