Item 2. Properties

At December 30, 2017, the Company operated 1,853 stores in 49 states. The Company leases approximately 93% of its stores. Store leases typically have initial terms of 10 to 15 years, with two to four renewal periods of five years each, exercisable at our option. No single lease is material to Company operations.

The following is a count of store locations by state:

Index

The following is a list of distribution locations including the approximate square footage and if the location is leased or owned:

(a) The leased facility in Hagerstown is treated as an extension of the existing owned Hagerstown location and is not considered a separate distribution center.

(b) This is a mixing center designed to process certain high-volume bulk products.

The Company’s Store Support Center occupies approximately 260,000 square feet of owned building space in Brentwood, Tennessee, and the Company’s Merchandising Innovation Center occupies approximately 32,000 square feet of leased building space in Nashville, Tennessee. The Company also leases approximately 8,000 square feet of building space for the Petsense corporate headquarters located in Scottsdale, Arizona.

In fiscal 2017, we began construction on a new northeast distribution center in Frankfort, New York, as well as an expansion of our existing distribution center in Waverly, Nebraska, which will provide additional distribution capacity once construction is completed.