Dollar General 2008 Annual Report Download - page 29

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Our fourth priority is to strengthen and expand Dollar General's culture of serving others.
For customers this means helping them Save Time. Save Money. Every Day. For employees,
this means creating an environment that attracts and retains key employees throughout the
organization. For communities, this means giving back to our store communities.
In 2009, we plan to continue to focus on these same four operating priorities. We will
continue to refine and improve our store standards, focusing on achieving a consistent look and
feel across the chain, and plan to measure customer satisfaction in 2009. We expect to complete
the process of raising the height of our merchandise fixtures, allowing us to better utilize our
store square footage. We will continue to focus on reducing inventory shrink by implementing
additional analytical tools and expanding the utilization of surveillance equipment. We have
identified additional opportunities to reduce labor and other costs in our distribution centers. In
addition, we plan to continue to expand our private brand consumables offerings and to increase
and upgrade our private brand merchandise in the home and seasonal categories. We intend to
make strides in expanding our foreign sourcing efforts and expect to begin seeing a greater
impact from this initiative in late 2009.
With regard to leveraging information technology and process improvements to reduce
costs, we will continue to focus on making improvements that benefit our merchandising and
operations efforts, including projects such as pricing and profitability analysis, merchandise
selection and allocation and labor scheduling. By the end of 2009, we expect each of our store
managers to have access to a back office computer which will improve reporting and
communications with the stores and, consequently, should assist us in improving store
productivity.
Finally, in 2009, we plan to open 450 new stores within the 35 states in which we
currently operate, and to remodel or relocate an additional 400 stores. With regard to planned
new store openings, our criteria are based on numerous factors including, among other things,
availability of appropriate sites, expected sales, lease terms, population demographics,
competition, and the employment environment. We use various real estate site selection tools to
determine target markets and optimum site locations within those markets. With regard to new
store expansion in fiscal 2009, our plans include expansion only within our existing markets.
With respect to store relocations, we begin to evaluate a store for relocation opportunities
approximately 18 months prior to the store’ s lease expiration using the same basic tools and
criteria as those used for new stores. Remodels, which require a much smaller investment, are
determined based on the need, the opportunity for sales improvement at the location and an
expectation of a desirable return on investment. The majority of 2009’ s new store sites have
been identified and terms agreed to. However, due to uncertainties in the economy and its
potential impact on commercial real estate sites and developers, there is a heightened level of
risk that these stores may not open as scheduled.
We expect to continue to face difficult economic issues in 2009 which will restrict our
customers’ ability to spend and, therefore, will challenge our efforts to increase sales and gross
profit. We also believe that competitive pricing, promotions, and advertising will continue and
are likely to increase if overall retail sales continue to decline. We remain committed to our