Dollar General 2003 Annual Report Download - page 5

American households and 49% of all households earning annual
income greater than $70,000 shopped at a dollar store last year. The
fast pace of our customers’ lifestyles has also increased the impor-
tance of convenience in their shopping requirements. We think we
are well-positioned to be a store of choice for those customers look-
ing for convenience as well as great value. Finally, the aging popu-
lation in the U.S. means there are more people on fixed incomes.
These customers typically find Dollar General stores particularly
appealing and frequently shop with us.
With that background, let’s talk about our future. Our vision for the
future of Dollar General is quite simple. We want to become one of
the leading providers of highly consumable basic products for under-
served customers regardless of geography or demography. Today,
dollar stores are becoming more mainstream. Even though Dollar
General is the oldest and largest player in the dollar channel, we are
still growing very rapidly. As we grow, we will continue to provide
our customers unique assortments of products at low prices through
our growing network of conveniently located small stores. We will
remain focused on meeting the needs of the underserved customer.
We will continue to compete on price and convenience –– our points
of differentiation. Our reputation for delivering tremendous value to
our customers and for placing many stores where other big-box
retailers will not is well-deserved, and we plan to continue to think
of our customers’ needs first when we source our products and when
we choose sites for our stores.
To accomplish our vision, we must continue to grow. The opportu-
nity to grow our footprint at a rapid pace certainly exists, and we
plan to take advantage of it. In 2003, we were in 27 states, having
just opened stores in Michigan, New York and New Jersey within the
past four years. In 2004, we plan to open stores in New Mexico,
Arizona and Wisconsin for the first time. Finally we continue to test
new formats that will allow us to present variations of our model and
increase the breadth of our product offerings.
At Dollar General, we have rededicated ourselves to improving our
customers' shopping experience. We are committed to providing a
friendly, fun and easy place for our customers to purchase those
products they need on a regular basis. To that end, we have begun
our "EZstore" project that is focused on making our stores "EZer" to
shop and "EZer" to operate. We are also committed to scouring the
world for unique values and reinventing the "treasure hunt" dimen-
sion of our merchandise mix. It is also imperative that we remain a
leader in the use of technology to further develop our supply
chain.
We enjoy strong relationships with our vendors around the
world. We have many major national and international brands
in our mix as well as our own private label brands. Providing
a dependable, branded merchandise mix at everyday low
prices is a cornerstone of our business model. Quality remains
a passion at Dollar General, and we plan to keep it that way.
This year, we are focused on preparing for a strong future. Our
retail sector is growing, and we are planning to take advan-
tage of the growth opportunities. We will build on our four key
core competencies which we believe will allow us to continue
to compete successfully in this environment. They are:
• Our ability to open a large number of well-located new
stores,
• Our ability to successfully run a large network of profitable
stores,
• Our ability to provide a unique and diversified mix of products
that our customers need, and
• Our ability to resupply our stores efficiently through our supply
chain.
By capitalizing on these
competencies, we can
better serve our existing
customers, attract new
customers and signifi-
cantly grow our busi-
ness. We have also
planned several impor-
tant initiatives for 2004,
a big investment year
for us, to help achieve
our goals as quickly
as possible. While I
am excited about
each of these initiatives
and their long-term
prospects, there is an
element of risk associ-
ated with their imple-
mentation in 2004. We
will work diligently to
minimize these risks.
I personally consider it a privilege to lead this company at this point
in its history and am dedicated to growing shareholder value. We
have a competitive business model and a great team working on
your behalf. Thank you for your investment in Dollar General
Corporation and your continued support.
Kindest regards,
David A. Perdue
Chairman and Chief Executive Officer
March 31, 2004
"We are probably in here
twice a week, and we know
everybody in here. I find
what I'm looking for and
more – usually too much!
We buy lots of milk and
ice cream, and every-
thing is always fresh.
It helps to be able to
get a lot for so little."
3
2001 2002 2003
$319.9
$300.2
$141.6
Cash Flow Before
Financing Activities
Fiscal years
(Dollars in millions)
1999 2000
$96.5
$57.7