Dollar General 2008 Annual Report Download - page 15

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by other risk factors described herein that reduce the results expected. Successful systemwide
implementation relies on consistency of training, stability of workforce, ease of execution, and
the absence of offsetting factors that can influence results adversely. Failure to achieve
successful implementation of our initiatives or the cost of these initiatives exceeding
management’ s estimates could adversely affect our results of operations and financial condition.
Risks associated with the domestic and foreign suppliers from whom our products
are sourced could adversely affect our financial performance.
The products we sell are sourced from a wide variety of domestic and international
suppliers. Approximately 10% of our purchases in 2008 were from The Procter & Gamble
Company. Our next largest supplier accounted for approximately 6% of our purchases in 2008.
We directly imported approximately 10% of our purchases at cost in 2008, but many of our
domestic vendors directly import their products or components of their products. Political and
economic instability in the countries in which foreign suppliers are located, the financial
instability of suppliers, suppliers’ failure to meet our supplier standards, labor problems
experienced by our suppliers, the availability of raw materials to suppliers, merchandise quality
or safety issues, currency exchange rates, transport availability and cost, inflation, and other
factors relating to the suppliers and the countries in which they are located or from which they
import are beyond our control. In addition, the United States’ foreign trade policies, tariffs and
other impositions on imported goods, trade sanctions imposed on certain countries, the limitation
on the importation of certain types of goods or of goods containing certain materials from other
countries and other factors relating to foreign trade are beyond our control. Disruptions due to
labor stoppages, strikes or slowdowns, or other disruptions, involving our vendors or the
transportation and handling industries also may negatively affect our ability to receive
merchandise and thus may negatively affect sales. These and other factors affecting our suppliers
and our access to products could adversely affect our financial performance.
All of our vendors must comply with applicable product safety laws, and we are
dependent on them to ensure that the products we buy comply with all safety standards. Our
ability to obtain indemnification from foreign suppliers may be hindered by the manufacturers’
lack of understanding of U.S. product liability or other laws, which may make it more likely that
we be required to respond to claims or complaints from customers as if we were the
manufacturer of the products.
As we increase our imports of merchandise from foreign vendors, the risks associated
with foreign imports will increase.
We are subject to governmental regulations, procedures and requirements. A
significant change in, or noncompliance with, these regulations could have a material
adverse effect on our financial performance.
Our business is subject to numerous federal, state and local laws and regulations. New
laws or regulations or changes in existing laws and regulations, particularly those governing the
sale of products, may require extensive system and operating changes that may be difficult to
implement and could increase our cost of doing business. In addition, such changes or new laws