CarMax 2006 Annual Report Download - page 16

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GROWTH PLAN
■We plan to open stores at an annual rate of approxi-
mately 15%-20% of our used car superstore base. In
fiscal 2007, the majority of our store openings will
be superstores in new mid-sized markets and satellite
superstores in existing markets. After fiscal 2007, we
expect to resume store growth in new large markets.
■We initially defined mid-sized markets as those with
television viewing populations ranging from 1 million
to 2.5 million. As we have refined our operations and
market data, we now believe a more appropriate defini-
tion of a mid-size market is one with a television view-
ing population between 600,000 and 2.5 million. These
markets are the easiest to enter from a real estate and
advertising perspective, and historically they are where
we have experienced the fastest store sales ramp-up
and profitability.
■We are adding satellite stores both in under-served trade
areas in existing large markets and in mid-sized markets
to increase market share. Satellite stores are highly
efficient because they are built on smaller sites and
require little-to-no incremental advertising.
■In fiscal 2007, we expect to open approximately
11 superstores, representing a 16% increase in our
used car superstore base. Store opening dates are
heavily weighted to the second half of the fiscal year.
■One of the openings will be in Charlottesville, Va.,
which has a television viewing population of approxi-
mately 185,000. This test store will help us understand
our longer-term opportunities in small markets.
■We also are opening our first appraisal-only “CarMax
Car Buying Center.” Located in the Atlanta market,
the center is staffed with CarMax buyers who conduct
appraisals and purchase vehicles using the same
processes and systems utilized in our used car super-
stores. This test store is part of our long-term program
to increase appraisal traffic and retail vehicle sourcing
self-sufficiency.
Solid Growth Opportunity
14 CARMAX 2006
SC & customers in display lot
NEW PHOTO
Superstore display lot
6