Inventories

6 Months Ended

Jun. 29, 2024

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

The Company’s inventories, consisting mainly of food and other food-related products, are primarily considered finished goods. Inventory costs include the purchase price of the product, freight costs to deliver it to the Company’s distribution and retail facilities, and depreciation and labor related to processing facilities and equipment and are net of certain cash or non-cash consideration received from vendors. The Company assesses the need for valuation allowances for slow-moving, excess and obsolete inventories by estimating the net recoverable value of such goods based upon inventory category, inventory age, specifically identified items, and overall economic conditions.

The Company records inventories at the lower of cost or market primarily using the last-in, first-out (“LIFO”) method. For our LIFO based inventories, the base year values of beginning and ending inventories are determined using the inventory price index computation method. This “links” current costs to original costs in the base year when the Company adopted LIFO. LIFO reserves in the Company’s Consolidated Balance Sheets were $532 million and $488 million as of June 29, 2024 and December 30, 2023, respectively. There was no change in cost of goods sold for the 13 weeks ended June 29, 2024 resulting from LIFO reserves. As a result of changes in LIFO reserves, cost of goods decreased $15 million for the 13 weeks ended July 1, 2023, and increased $45 million and $5 million for the 26 weeks ended June 29, 2024 and July 1, 2023, respectively.