WEIS MARKETS INC

The Company strives to be good stewards of the environment and makes this an important part of its overall mission.  Its sustainability strategy operates under four key pillars: green design, natural resource conservation, food and agricultural impact and social responsibility.  The goal of the sustainability strategy is to reduce the Company’s overall carbon footprint by reducing greenhouse gas emissions and reducing the impact on climate change.  The Company continues to be a member of the EPA GreenChill program for advancing environmentally beneficial refrigerant management systems.  The Company currently has ten stores registered under this program and plans to expand this program to more stores.  Since 2016, the Company has replaced 86% of its tractor fleet with more fuel-efficient tractors.  The Company continues to emphasize recycling in all areas, most recently noting a decrease in store waste where the Company has diverted 40 thousand tons of waste from landfills.  These statistics and more can be found in the Company’s most recently published sustainability report, linked below in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Comparable store sales increased for all years presented.  On a comparable store sales basis all product categories, Center Store, Fresh, Pharmacy Services, and Fuel, increased in sales.  In 2019, customer acceptance of the new Low, Low Price private brand program has augmented sales, as has additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 175 store locations.  “Weis 2 Go Online” allows the customer to order on-line and have their order delivered or,  at 154 locations, pick up their order at an expedient store drive-thru.

Income taxes are inherently complex and require management’s evaluation and estimates, specifically regarding current and deferred income taxes and uncertain tax positions.  The Company reviews the tax positions taken, or expected to be taken, on tax returns to determine whether, and to what extent, a benefit can be recognized in its Consolidated Financial Statements.  The assessment of the Company’s tax position relies on the judgment of management to estimate the more likely than not merits associated with the Company’s various tax positions.

As of December 28, 2019, the Company reclassified non-service components of the Supplemental Executive Retirement Plan (SERP) benefit obligation separately from the service cost component. These non-service components in the amounts of $3.0 million, $(0.9) million and $2.1 million as of December 28, 2019, December 29, 2018 and December 30, 2017, respectively, were reclassified to “Other income (expense)”.  The Company recognizes service cost components in “Operating, general and administrative costs”.

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases effective December 30, 2018 due to the adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), using the modified retrospective transition method.