Dollar General 2005 Annual Report Download - page 6

activity of our competitors seemed
to be an attempt to combat what
was an overall weakness in the
sector.
Secondly, in addition to exter-
nal pressures, we recognized that
weaknesses in our operations also
contributed to our fourth quarter
results. After much analysis, we
identified several internal issues
that negatively impacted our
results, and we moved quickly to
improve our effectiveness in these
areas.We firmly believe that we
now have the people and plans in
place to make those improvements
and to meet the challenges we face,
in both the short and long term.
Strategic Efforts
Three years ago during my
first year with the Company, work-
ing with your board of directors,
we established a strategic plan
that included three major priorities.
First, we decided to address the
operation of our stores. We want-
ed to improve how we operated
our stores and address several
negative trends. Secondly, we
knew that to compete in the
changing retail environment, we
had to strengthen our organiza-
tion and prepare it for new chal-
lenges. Third, we had to improve
our merchandising productivity
and make our practices more con-
temporary to compete in a chang-
ing economic environment.
Strengthening Store Operations
To address the critical issues
impacting the operation of our
stores and, thus, our customers’
experiences in the stores, we
stepped back and performed a
“soup-to-nuts” analysis of how our
stores worked. In 2004, that com-
prehensive evaluation yielded an
initiative we call “EZstore.” While
EZstore does not make working in
a Dollar General store easy, it does
make it less difficult and more pro-
ductive. EZstore reduces physical
labor for our employees, reduces
labor costs for the Company,
reduces potential damages,
reduces accidents and their costs
and, most importantly, improves
the shopping experience for our
customers. At the end of 2005,
nearly half of our stores were
EZstores.We will continue imple-
menting the concept in other
stores in 2006.
We employ
approximately
64,500 people
worldwide, and
most of them
work in our stores.These women
and men are absolutely critical to
our continued growth and success.
In addition to the improvements
realized from EZstore, we support
our people by recruiting the right
managers and by providing com-
prehensive training to new store
managers on every aspect of run-
ning a Dollar General store. In
2005, we made additional progress
toward our goal of promoting
from within the Company. Of our
197 new district managers in 2005,
63 percent were promotions from
within the Company. We also
remain committed to diversity. By
making our workforce an accurate
reflection of our customer base,
we more effectively meet diverse
customers’ needs.
Enhancing the Leadership Team
To successfully address our
challenges and opportunities, we
must have a strong, committed
management team with the right
talent, skill set and resources.That
team also must operate with the
highest level of integrity. Since
joining the Company, I have con-
tinued to assess our needs in that
regard and have worked to build
the right team of people within
the proper organizational structure.
To help me with this, in 2005, we
brought in a seasoned executive to
lead our human resources function.
Improving the shopability of our stores is one
way Dollar General caters to shoppers. Proper
merchandising helps customers find key items
faster. Senior Vice President of Store Operations
Tom Mitchell shares merchandising tips with
District Manager Lisa Buckley.
Dollar General began accepting electronic benefits transfer
cards in 2003, making shopping hassle-free for customers
on government assistance. At the same time, we make shop-
ping for all customers more convenient by accepting debit
cards and Discover Network cards.
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