(Operator Instructions) Welcome to the Ingles Markets Incorporated Fourth Quarter Conference Call. For opening remarks and introductions I’d like to turn the call over to the Chief Financial Officer, Mr. Ron Freeman.

Welcome to Ingles Markets 2008 Fourth Quarter and Year End Conference Call. With me today are Robert Ingle, Founder of our Company and Chief Executive Officer, Robert Ingle II, Chairman of the Board, Jim Lanning, President, and Tom Outlaw, Vice President of Sales and Marketing. Statements made on this call include forward looking statements as defined by and subject to the Safe Harbor as created by Federal Securities laws. Words such as expect, anticipate, intend, plan, believe, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed on this call. Ingles Markets, Incorporated does not undertake to update publicly any forward looking statements, whether as a result of new information, future events or otherwise. For a description of factors that could cause actual results to differ materially from that anticipated by forward-looking statements, you are referred to the company's public filings, including the Form 10-K for the fiscal year ended September 27, 2008. In accordance with the long standing company policy and in recognition of the extremely competitive nature of our industry this call will not address competitive issues or Ingle Marketing strategies other than what is included in the Form 10-K. This morning, I’ll provide you with a summary of our annual and fourth results followed by additional comments on each period. After that, we will be pleased to take your questions. Our press release issued this morning is available on our website, www.Ingles-Markets.com. Our Form 10-K will be filed later today and will be available on the website as well. For the 44th consecutive year we had record sales with this year’s increase of 13.6% resulting in sales…

(Operator Instructions) Your first question comes from Ellen Itskovitz – Lord Abbett Ellen Itskovitz – Lord Abbett: When you’re doing a lot of your renovations, etc. you said that a lot of that went into your SG&A did some put some of it in PP&E? I’m curious how much of it is expensed versus capitalized.

Typically the personnel costs that you incur for additional training and for having additional staff on hand during a store opening will go to SG&A expense. What’s capitalized typically is going to be certainly the construction costs and the equipment that goes in there. Personnel and promotional costs go directly to SG&A. Ellen Itskovitz – Lord Abbett: The SG&A was really just the personnel costs associated with it?

And the additional promotional expenses, everything that it takes to get a successful store opening.

Your next question comes from Bryan Hunt – Wachovia Bryan Hunt – Wachovia: I was wondering if you could discuss your revolver maturities and your LC facility. I believe your LC facility matures at the end of this calendar and your revolvers mature in 2010 is that correct?

It’s a little bit off. The details on that are going to be in the 10-K that we file later today. Right now everything we have is committed through this time next year, through the end of 2009 and we have maturities coming up in late 2009 and 2010. Bryan Hunt – Wachovia: Could you give us an idea of what your CapEx plan is for next year? You’ve given us an idea of what you’re going to spend and a chunk of that fell in 2008 but could you frame the dollars for us?

Fiscal 2008 we expect to be somewhere between $140 and $160 million. Bryan Hunt – Wachovia: With that level of CapEx do you feel like you’ll be able to pay down your revolver balances by the end of next year?

Yes. Bryan Hunt – Wachovia: When I look at your CapEx numbers the $140 to $160 million is there anything in there for distribution center expansion? I know you guys bought some land for that is there any planned CapEx on expanding the DC next year?

We don’t go into the details of our CapEx plans other than to talk about the number of store openings we anticipate having in the coming year. Bryan Hunt – Wachovia: If I look at your same store sales growth in Q4 could you talk about pharmacy did you experience growth in that department as well?

We don’t provide detail on pharmacy that’s included in the category with non-perishables. If it’s not in the 10-K we really can’t discuss it on the call. Bryan Hunt – Wachovia: Could you talk about general department were sales up across all departments in Q4?

Yes. Bryan Hunt – Wachovia: On your new stores and your remodels are those hitting your sales targets do you feel like you hit your ROI hurdles?

We don’t go into individual store performance. We’re pleased with the store openings we had in 2008. We’re excited with the ones we have in progress for 2009 but we’re not able to go into individual store performance. Bryan Hunt – Wachovia: Of the 12 new openings and replacements are there any geographic concentration on those stores, are they most North Carolina, South Carolina or are you doing some openings in Georgia?

Of the 12 fell six in Georgia, four in North Carolina, and two in South Carolina. It’s spread out pretty well. Bryan Hunt – Wachovia: With regards to the sales performance are there any differentials between those particular states or are you seeing pretty much general lifts across all geographies.

We look at it across all geographic lines. We really don’t distinguish one market from the next in that way. Bryan Hunt – Wachovia: If I look at your sales gains what percent of your sales are to customers with an Advantage card versus customers without a card?

I’m not sure we have that detailed number in the K. The percentage is a little bigger this year than it was last. We continue to be very pleased with the Advantage card program. Bryan Hunt – Wachovia: With regard to private label, you mentioned it in your comments that you’d gained sales year over year on private label. Could you talk about what your mix and maybe what your goal is and whether you’re introducing any new private label products this year?

We have new private label products coming on all the time and they are literally in every department in the store now. I think it’s been an industry wide trend this year given the economy that a lot of people have been purchasing more private label items. We’re no exception to that. Bryan Hunt – Wachovia: If you look at the 16 shopping centers the company does not occupy are you actively selling any of those locations?

We hear things all the time. If the right offer comes around then we may do something. Bryan Hunt – Wachovia: Are any of those locations in the Georgia market or are they in the North Carolina, South Carolina areas?

I don’t have the detail in front of me. I can only assume that they pretty much mirror the company’s geographic presence.

Your next question comes from Todd Duvick - Banc of America

With respect to capital expenditures I appreciate the guidance and I wanted to know if you can tell us if you expect capital expenditures to be paid out of the cash flow this year to be free cash flow positive or break even?

I hesitate to go into much detail on the breakdown between internally provided and externally provided. I think the important take away here is we have a lot of revolver availability and we have a lot of unencumbered properties. We’ve had even in the tight credit environment relative ease in financing what we needed to this year and we don’t really see that changing for us in ’09.

Shifting to the income statement, it seems if you take a look at your comparable store sales growth over the last three years excluding gasoline it seems like you’re defying gravity as compared to your competition. Do you expect comparable store sales to continue at the pace you’ve set over the past few years or can you provide us any color on what you’re looking for going forward?

We don’t provide guidance on future sales. Really the CapEx level is about the only thing we provide future guidance on. We’re top line oriented, that’s where it all starts with us, and that’s what we’re going to continue to focus on. A lot can depend upon what happens in the general economy over the next 12 months. I’d hate to put a number out there.

Can you comment generally if you take a look at the underlying agricultural commodities obviously we’re seeing a lot of prices come down there and there’s speculation out there that that may ultimately impact the prices that packaged food companies are going to be able to charge going forward. How do you think that this environment is going to affect your ability to grow sales, comparable store sales going forward? Have you seen any impact on same store sales so far in the first quarter?

We really can’t talk about the first quarter since we’re not there yet. Even though we’ve had some costs coming down it take a while for the affect of that to flow all the way through purchasing and distribution and retail sales channels. Even though commodity prices come down there’s an awful lot of other factors that go into that. Distribution costs have been very difficult this year for everyone given the volatile gas prices so I don’t think you can just point to commodity cost activities and say this is the direction that retail grocery sales are going to go.

With respect to that going into next year obviously distribution the headwinds in terms of the fuel costs for distributing your own products are going to be more favorable. What would you expect for margins going forward? It looks like in the current quarter the sales of gasoline really impacted your margins. Can you talk about how gasoline you would expect it to affect the margins of the products you sell in addition to the margins because of lower delivery costs?

That’s too many factors I think to balance and try to speculate on to say this is where your margin number is going to come out. Again, our focus, while we certainly care about margin, our focus is on top line sales and being competitive. Beyond that I don’t know. What do you think?

Your next question comes from Emily Shanks – Barclays Capital Emily Shanks – Barclays Capital: Could you let us know what the amount of outstanding letters of credit were at year-end?

Yes, $23.9 million. Emily Shanks – Barclays Capital: I had a quick balance sheet question, it looks like fiscal year ’07 in the press release was restated on the cash and cash equivalent line to a lower number and then there was the equal offset in the other current liabilities line item versus what was in the 10-K. To what is this difference attributable?

That is a reclassification of outstanding checks. Emily Shanks – Barclays Capital: What type of outstanding checks?

Checks that we’ve written that haven’t cleared the bank yet. Emily Shanks – Barclays Capital: Checks that you’re paying what, your vendors?

Yes, vendors, anyone that we would pay. You’re right, it’s strictly a re-class between cash and accounts payable, and we’ve made it comparable for all years presented.

Your next question comes from Bryan Hunt – Wachovia Bryan Hunt – Wachovia: I was wondering if you could talk about your store expansion. Are all the planned store openings in current geographies for 2009 or are you moving into any new markets?

They’re in current geographies. Bryan Hunt – Wachovia: You opened a few convenience stores over the last couple of years how have those performed relative to expectations? Are there any plans for 2009 to open any additional?

The c-stores are a small part of our operation and we don’t discuss them individually. Bryan Hunt – Wachovia: Could you talk about where your RP basket is? Relative to cash with the stock down there’s definitely opportunity to buy the stock back or potentially raise the dividend considering the size where I think your RP basket is. Could you talk about what your priorities are for cash whether its buy back stock, raise the dividend or pay down debt for 2009.

Our first priority is to continue to take care of our stores, we will do that. Beyond that we’ll see how the economy turns out and what happens with interest rates and credit availability and all the other factors that can affect our cash. Bryan Hunt – Wachovia: Could you give us an idea where the RP basket underneath the notes currently?

I think its somewhere in the $30 million range, that’s not a number we calculate everyday because it doesn’t affect our day-to-day operations.

Your next question comes from Rob Magnuson – Goldman Sachs Rob Magnuson – Goldman Sachs: Can you give me depreciation and amortization for the fiscal year?

Yes, that’s in the press release so that’s already out there on the web. Depreciation and amortization expense was $69.1 million for fiscal 2008 and $60.9 million for fiscal 2007. Rob Magnuson – Goldman Sachs: In terms of attendance from your shopping mall locations have you noticed any increase in delinquencies or increased push back in terms of renegotiations with any of the tenants?

No we haven’t.

With no other questions in the queue I’d like to turn the call back to Mr. Freeman for any additional or closing comments.

Thank you all for joining us today. We wish all of our customers, employees, and shareholders a happy and safe holiday season. Thank you very much.

That does conclude today’s call again thank you for your participation have a good day.