Dollar General 2008 Annual Report Download - page 17

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We are dependent upon the smooth functioning of our distribution network, the
capacity of our distribution centers, and the timely receipt of inventory.
We rely upon the ability to replenish depleted inventory through deliveries to our
distribution centers from vendors and from the distribution centers to our stores by various
means of transportation, including shipments by sea and truck. Labor shortages in the
transportation industry could negatively affect transportation costs. In addition, long-term
disruptions to the national and international transportation infrastructure that lead to delays or
interruptions of service would adversely affect our business.
Our planned future growth will be impeded, which would adversely affect sales, if
we cannot open new stores on schedule or if we close a number of stores materially in
excess of anticipated levels.
Our growth is dependent on both increases in sales in existing stores and the ability to
open profitable new stores. Our ability to timely open new stores and to expand into additional
market areas depends in part on the following factors: the availability of attractive store
locations; the absence of occupancy delays; the ability to negotiate favorable lease terms; the
ability to hire and train new personnel, especially store managers; the ability to identify customer
demand in different geographic areas; general economic conditions; and the availability of
sufficient funds for expansion. In addition, many of these factors affect our ability to successfully
relocate stores. Many of these factors are beyond our control. In addition, our substantial debt,
particularly combined with the recent tightening of the credit markets, has made it more difficult
for our real estate developers to obtain loans for our build-to-suit stores and to locate investors
for those properties after they have been developed. If this trend continues, it could materially
adversely impact our ability to open build-to-suit stores in desirable locations.
Delays or failures in opening new stores, or achieving lower than expected sales in new
stores, or drawing a greater than expected proportion of sales in new stores from existing stores,
could materially adversely affect our growth. In addition, we may not anticipate all of the
challenges imposed by the expansion of our operations and, as a result, may not meet our targets
for opening new stores, remodeling or relocating stores or expanding profitably.
Some of our new stores may be located in areas where we have little or no meaningful
experience. Those markets may have different competitive conditions, market conditions,
consumer tastes and discretionary spending patterns than our existing markets, which may cause
our new stores to be less successful than stores in our existing markets.
Some of our new stores will be located in areas where we have existing units. Although
we have experience in these markets, increasing the number of locations in these markets may
result in inadvertent over-saturation of markets and temporarily or permanently divert customers
and sales from our existing stores, thereby adversely affecting our overall financial performance.