OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of Weis Markets, Inc.'s (the "Company")
financial condition and results of operations should be read in conjunction with
the unaudited Consolidated Financial Statements and related notes included in
Item 1 of this Quarterly Report on Form 10-Q, the Company's audited Consolidated
Financial Statements and the related notes included in the Company's Annual
Report on Form 10-K for the year ended December 26, 2020, filed with the U.S.
Securities and Exchange Commission, as well as the cautionary statement
captioned "Forward-Looking Statements" immediately following this analysis.
Company Summary
Weis Markets is a conventional supermarket chain that operates 198 retail stores
with approximately 24 thousand associates located in Pennsylvania and six
surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West
Virginia. Its products include groceries, dairy products, frozen foods, meats,
seafood, fresh produce, floral, pharmacy services, deli products, prepared
foods, bakery products, beer and wine, fuel and general merchandise items, such
as health and beauty care and household products. The store product selection
includes national, local and private brands and the Company promotes by using
Everyday Lower Price; Low Price Guarantee; Low, Low Price; and Loyalty programs.
The Loyalty program includes fuel rewards that may be redeemed at the Company's
fuel stations or one of its third-party fuel station partners.
On March 11, 2020, the World Health Organization declared that the novel
coronavirus (COVID-19) had become a pandemic, and on March 13, the U.S.
President declared a National Emergency concerning the disease. Additionally, in
March 2020, state governments in the Company's geographic operating area began
instituting preventative shut down measures in order to combat the novel
coronavirus pandemic. The Company's business was deemed essential and thus its
stores have remained open during this time period. The closure of other food
sources and government stimulus payments to affected individuals have been
accretive to our sales and gross profits compared to the time periods preceding
the impact of the novel coronavirus pandemic; however, the Company also faces
new and increased risks concerning its associates, government regulation, and
supply chain. The Company is not able to speculate how the ensuing economy or
unknown future related expenses will affect it after the governmental novel
coronavirus pandemic measures have ended (see Forward-Looking Statements).
The Company advertises its products and promotes its brand through weekly and
monthly printed circulars; radio ads; e-mail blasts; and on-line via its
web site, social media and mobile applications. The Company promotes by using
Everyday Lower Price, Low Price Guarantee, Low, Low Price and utilizes a loyalty
marketing program, "Weis Club Preferred Shopper," which enables customers to
receive discounts, promotions and in-store and fuel rewards.
Utilizing its own centrally located distribution center and transportation
fleet, Weis Markets self distributes approximately 68% of product with the
remaining being supplied by direct store vendors. In addition, the Company has
three manufacturing facilities which process milk, ice cream and fresh meat
products primarily for the Company's stores but serve other companies as well.
The corporate offices are located in Sunbury, PA where the Company was founded
in 1912. The Company has implemented current CDC guidelines to attempt to ensure
the continuity of its distribution center and fleet.
The Company continues to innovate and remain relevant to industry trends and
offering customer convenience by presenting
programs like "Weis 2 Go Online" ordering with curbside pickup and home
delivery. In the first quarter of 2021, the Company offered Weis 2 Go Online
curbside pickup in 184 of its locations. During the third quarter of 2018 the
Company began offering home delivery with Shipt, and currently offers this
convenience to customers in 175 different locations. Due to the surge in volume
created by the novel coronavirus pandemic, sales in the first quarter of 2021
through Weis 2 Go Online have increased over 170% percent when compared to the
same period last year.
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Table of Contents
WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
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