VILLAGE SUPER MARKET, INC.
733 Mountain Avenue
Springfield, New Jersey 07081
Phone: (973) 467-2200
April 10, 2009
H. Christopher Owings, Assistant Director
U.S. Securities and Exchange Commission
Division of Corporation Finance
Washington, DC 20549-0404
RE: Village Super Market, Inc.
Form 10-K for Fiscal year Ended July 26, 2008
Filed October 8, 2008
Proxy Statement on Schedule 14A
Filed October 31, 2008
File No. 001-33360
Dear Mr. Owings:
Thank you for your comments regarding the above-referenced filings. We
appreciate your assistance in ensuring our filings comply with the applicable
disclosure requirements. Set forth below are the Staff's comments followed
by our responses:
Comment:
Form 10-K for the Fiscal Year Ended July 26, 2008
Annual Report to Shareholders
Management's Discussion and Analysis of Financial Condition and Results
of Operations, page 4
1. Please expand this section to discuss known material trends and
uncertainties that will have, or are reasonably likely to have, a
material impact on your revenue or income or result in your
liquidity decreasing or increasing in any material way. Please
provide additional analysis concerning the quality and variability of
your earnings and cash flows so that investors can ascertain the
likelihood of the extent past performance is indicative of future
performance. Please discuss whether you expect levels to remain at
this level or to increase or decrease. Also, you should consider
discussing the impact of any changes on your earnings. Further,
please discuss in reasonable detail:
- Economic or industry-wide factors relevant to your company,
- Material opportunities, challenges, and
- Risk in short and long term and the actions you are taking to
address them.
Refer to SEC Release No. 33-8350, available at http://www.sec.gov/rules/interp/
33-8350.htm, and Item 303(a) of Regulation S-K.
Response:
Historically, the Company has considered material trends and uncertainties
in the Results of Operations, Liquidity and other sections of our Form 10-K.
In addition, the Company has, when applicable, discussed items affecting the
quality and variability of earnings and cash flows, such as impairment charges
and gains from the sale of assets, in the Results of Operations section. In
response to the Staff's comment, beginning with our quarterly report on Form
10-Qfor the period ending April 25, 2009, the Company will expand the Overview
section and include an Outlook section in Management's Discussion and Analysis
of Financial Condition and Results of Operations to include additional
discussion of known material trends and uncertainties, relevant economic and
industry factors, opportunities, challenges and short and long term risks.
We expect this discussion would vary each period depending on current
circumstances, but could include the impact on the Company of current economic
conditions, consumer confidence, competitive activity, situations unique to the
supermarket industry, expansion opportunities, inflation trends, any items in
the current period that affect the quality and variability of earnings and cash
flows, risks and uncertainties. In addition to the above topics, below are
samples of the types of items from past filings that may be topics for
discussion in the Overview or Outlook sections in our future filings:
- Sales were negatively impacted in the second half of fiscal 2008 by
increased sale item penetration and trading down, as consumers
appeared to be more cautious due to concerns about the economy and
rising gas and food prices.
- The distribution of economic stimulus checks during the fourth
quarter of fiscal 2008 increased same store sales.
- The supermarket business is highly competitive and characterized by
narrow profit margins. Results of operations therefore may be
materially adversely impacted by competitive pricing and promotional
programs and competitor store openings.
- The Company's stores are concentrated in New Jersey. We are
vulnerable to economic downturns in New Jersey in addition to those
that may affect the country as a whole. Economic conditions such as
interest rates, energy costs and unemployment rates may adversely
affect our sales.
- Village has budgeted approximately $30 million for capital
expenditures in fiscal 2009. Planned expenditures include
construction costs and equipment for a replacement store in
Washington, New Jersey and a new store in Marmora, New Jersey.
- Construction of the Washington replacement store was delayed as the
approvals obtained were contested by a third party. Construction
began in September 2008 with an expected opening in spring 2009. The
Company began construction of the replacement store in Washington,
New Jersey, which is land leased, despite a pending appeal of the
approvals received from the Township. Management believes, based on
an opinion obtained from a prominent land use attorney, there is
only a slim possibility of the approvals obtained being overturned
and the Company's expenditures and assets being at risk.
- The Company maintains significant amounts of cash and cash
equivalents at financial institutions that are in excess of
federally insured limits. Given the current instability of financial
institutions, the Company cannot be assured that we will not
experience losses on these deposits. In addition, in the current
environment, the Company cannot be assured that Village's $20 million
revolving credit line will be available for borrowing, or that
Village will be able to replace the credit line upon its expiration
on September 16, 2009. We do not anticipate drawing on the credit
line prior to its expiration, except for letters of credit to insure
construction performance guarantees to municipalities.
Comment:
Proxy Statement on Schedule 14A
Executive Compensation, page 7
Compensation Discussion and Analysis, page 7
2. We note that individual officer performance is an important factor
in determining compensation. Please discuss how the specific forms
of compensation are structured and implemented to reflect each
named executive officer's individual performance and/or individual
contribution to the registrant's performance, describing the
elements of individual performance and/or contribution that are
taken into account. See Item 402(b)(2)(vii) of Regulation S-K.
Response:
As described on pages 7 and 8 of the proxy statement, as part of its
annual review of executive compensation, the Compensation Committee considers
several factors, including individual officer performance in determining
compensation. The Compensation Committee review is not structured in a way
that allocates specific weightings to elements of individual performance used
to determine each form of compensation.
In future filings, we will clearly state that the Committee's assessment
of individual performance for purposes of setting salary, annual bonus and
equity awards involve subjective qualitative assessments. Assuming the
Committee does not change its process for setting compensation, we expect
this disclosure would read substantially as follows:
The Compensation Committee subjectively determines, without the use of
performance targets, individual performance in the following areas: increased
responsibilities, performance of departments under the executive's control,
leadership, execution of strategic initiatives and decision making abilities.
In the event compensation decisions are materially affected by a specific
factor, the Company will disclose such factor and its affect on compensation.
Comment:
3. Please tell us whether you use financial or other performance
targets to determine salary increases, annual bonuses or equity
awards. If so, please provide a quantitative discussion of the
specific terms of the necessary targets to be achieved. Please
disclose or, to the extend you believe disclosure of these
financial and operational targets is not required because it could
result in competitive harm, provide us on a supplemental basis a
detailed explanation for this conclusion. See instruction 4 to
Item 402(b). If disclosure would cause competitive harm, please
discuss further how difficult it will be for the named executive
officer or how likely it will be for you to achieve the target
levels or other factors. See Item 402(b)(2)(v) of Regulation S-K.
Further, please discuss any discretion that may be exercised in
granting these increases, bonuses or awards absent attainment of
the stated performance goals.
Response:
The Compensation Committee does not use financial or other performance
targets to determine salary increases, annual bonuses or equity awards. In
future filings, the Company will change its description on pages 7 and 8 of the
proxy statement to clarify that although financial performance of the Company
is a factor in setting executive compensation, financial and other performance
targets are not utilized.
The Company acknowledges that:
- The Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
- Staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect
to the filings; and
- The Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
We appreciate your assistance in ensuring the Company provides appropriate
disclosures in its public filings. Should you have any questions about the
above responses, please feel free to contact the undersigned at (973) 467-2200.
/s/ Kevin Begley
Kevin Begley
Chief Financial Officer
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