AutoZone 2014 Annual Report Download - page 79

9
Store Development
The following table reflects our store development during the past five fiscal years:
Fiscal Year
2014 2013 2012 2011 2010
Beginning stores ................................. 5,201 5,006 4,813 4,627 4,417
New stores ...................................... 190 197 193 188 213
Closed stores ................................... - 2 - 2 3
Net new stores................................. 190 195 193 186 210
Relocated stores .............................. 8 11 10 10 3
Ending stores ...................................... 5,391 5,201 5,006 4,813 4,627
We believe that expansion opportunities exist in markets that we do not currently serve, as well as in markets
where we can achieve a larger presence. We attempt to obtain high visibility sites in high traffic locations and
undertake substantial research prior to entering new markets. The most important criteria for opening a new store
are the projected future profitability and the ability to achieve our required investment hurdle rate. Key factors in
selecting new site and market locations include population, demographics, vehicle profile, customer buying
trends, commercial businesses, number and strength of competitors’ stores and the cost of real estate. In reviewing
the vehicle profile, we also consider the number of vehicles that are seven years old and older, or “our kind of
vehicles”; these vehicles are generally no longer under the original manufacturers’ warranties and require more
maintenance and repair than newer vehicles. We generally seek to open new stores within or contiguous to
existing market areas and attempt to cluster development in markets in a relatively short period of time. In
addition to continuing to lease or develop our own stores, we evaluate and may make strategic acquisitions.
Purchasing and Supply Chain
Merchandise is selected and purchased for all stores through our store support centers located in Memphis,
Tennessee, Monterrey, Mexico and Sao Paulo, Brazil. In fiscal 2014, one class of similar products accounted for
approximately 10 percent of our total sales, and one vendor supplied more than 10 percent of our purchases. No
other class of similar products accounted for 10 percent or more of our total sales, and no other individual vendor
provided more than 10 percent of our total purchases. We believe that alternative sources of supply exist, at
similar costs, for most types of product sold. Most of our merchandise flows through our distribution centers to
our stores by our fleet of tractors and trailers or by third-party trucking firms.
Our hub stores have increased our ability to distribute products on a timely basis to many of our stores and to
expand our product assortment. A hub store has a larger assortment of products as well as regular replenishment
items that can be delivered to a store in its network within 24 hours. Hub stores are generally replenished from
distribution centers multiple times per week.
Competition
The sale of automotive parts, accessories and maintenance items is highly competitive in many areas, including
name recognition, product availability, customer service, store location and price. AutoZone competes in the
aftermarket auto parts industry, which includes both the retail DIY and commercial do-it-for-me (“DIFM”) auto
parts and products markets.
Competitors include national, regional and local auto parts chains, independently owned parts stores, online parts
stores, wholesale distributors, jobbers, repair shops, car washes and auto dealers, in addition to discount and mass
merchandise stores, department stores, hardware stores, supermarkets, drugstores, convenience stores, home
stores, and other online retailers that sell aftermarket vehicle parts and supplies, chemicals, accessories, tools and
maintenance parts. AutoZone competes on the basis of customer service, including the trustworthy advice of our
AutoZoners; merchandise quality, selection and availability; price; product warranty; store layouts, location and
convenience; and the strength of our AutoZone brand name, trademarks and service marks.
10-K