Leases

As of December 28, 2024 and December 30, 2023, we leased 14 of our store locations and one warehouse location from related parties. See NOTE 11—Related Party Transactions, for additional information.

As of December 28, 2024, we had executed leases for 69 store locations that we had not yet taken possession of with total undiscounted future lease payments of $451.5 million and lease terms through 2043. For 17 of these store locations, we are pursuing termination of these leases as part of the Restructuring Plan, with total undiscounted future lease payments of $66.7 million and lease terms through 2038. See NOTE 16—Restructuring Plan for further discussion.

Based upon our initial investment in store leasehold improvements, we utilize an initial, reasonably-certain lease life of 15 years for most of our leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term from five to 15 years or more. Our leases do not include any material residual value guarantees or material restrictive covenants. We also have non-cancelable subleases with unrelated third parties with future minimum rental receipts as of December 28, 2024 totaling $2.7 million ending in various years through 2036, which have not been deducted from the future minimum lease payments.

The balance sheet classification of our right-of-use lease assets and lease liabilities was as follows (amounts in thousands):


Leases	Classification	December 28, 2024		December 30, 2023
Assets:
Operating lease assets	Operating right-of-use assets	$	1,014,678	$	945,710
Finance lease assets	Other assets	3,711		6,433
Total lease assets		$	1,018,389	$	952,143
Liabilities:
Current
Operating	Current lease liabilities	$	71,527	$	62,273
Finance	Current lease liabilities	1,378		1,501
Noncurrent
Operating	Long-term lease liabilities	1,103,647		1,033,590
Finance	Long-term lease liabilities	2,572		4,717
Total lease liabilities		$	1,179,124	$	1,102,081

The components of lease expense were as follows (amounts in thousands):


		Fiscal Year Ended
Lease Cost	Classification (1)	December 28, 2024		December 30, 2023		December 31, 2022
Operating lease cost	Selling, general and administrative expenses	$	157,300	$	141,501	$	132,065
Finance lease cost:
Amortization of right-of-use assets	Selling, general and administrative expenses	1,479		1,423		1,316
Interest on leased liabilities	Interest expense, net	347		340		341
Variable lease cost	Selling, general and administrative expenses	1,688		1,093		740

Sublease income	Selling, general and administrative expenses	(1,281)		(1,237)		(868)
Net lease cost		$	159,533	$	143,120	$	133,594

_______________________

(1)Certain supply chain related lease costs herein are included in cost of sales.

Maturities of lease liabilities as of December 28, 2024 were as follows (amounts in thousands):


	Operating Leases		Finance Leases		Total
Fiscal 2025	$	146,250	$	1,584	$	147,834
Fiscal 2026	165,542		1,145		166,687
Fiscal 2027	160,450		735		161,185
Fiscal 2028	158,115		455		158,570
Fiscal 2029	158,740		370		159,110
Thereafter	867,841		153		867,994
Total lease payments	1,656,938		4,442		$	1,661,380
Less: Imputed interest	(481,764)		(492)
Present value of lease liabilities	$	1,175,174	$	3,950

The weighted-average lease terms and discount rates of operating and finance leases were as follows:


	December 28, 2024		December 30, 2023
Weighted-average remaining lease term:
Operating leases	10.5 years		10.8 years
Finance leases	3.6 years		5.0 years
Weighted-average discount rate:
Operating leases	6.53	%	6.55	%
Finance leases	6.35	%	5.89	%

Supplemental cash flow information related to leases was as follows (amounts in thousands):


	Fiscal Year Ended
	December 28, 2024		December 30, 2023		December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	152,576	$	135,871	$	125,221
Operating cash flows from finance leases	$	344	$	344	$	332
Finance cash flows from finance leases	$	1,597	$	1,409	$	1,279
Leased assets obtained in exchange for new operating lease liabilities	$	161,688	$	131,758	$	88,681
Leased assets obtained in exchange for new finance lease liabilities	$	917	$	1,782	$	39

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Grocery Outlet Holding Corp. Leases Disclosure

About Leases Disclosures

Other Available Disclosures