Dollar General 2011 Annual Report Download - page 102

10-K
PART I
ITEM 1. BUSINESS
General
We are the largest discount retailer in the United States by number of stores, with 9,961 stores
located in 39 states as of March 2, 2012, primarily in the southern, southwestern, midwestern and
eastern United States. We offer a broad selection of merchandise, including consumables, seasonal,
home products and apparel. Our merchandise includes high quality national brands from leading
manufacturers, as well as comparable quality private brand selections with prices at substantial
discounts to national brands. We offer our merchandise at everyday low prices (typically $10 or less)
through our convenient small-box (approximately 7,200 square feet) locations.
Our History
J.L. Turner founded our Company in 1939 as J.L. Turner and Son, Wholesale. We were
incorporated as a Kentucky corporation under the name J.L. Turner & Son, Inc. in 1955, when we
opened our first Dollar General store. We changed our name to Dollar General Corporation in 1968
and reincorporated in 1998 as a Tennessee corporation. Our common stock was publicly traded from
1968 until July 2007, when we merged with an entity controlled by investment funds affiliated with
Kohlberg Kravis Roberts & Co. L.P., or KKR. In November 2009 our common stock again became
publicly traded. Buck Holdings, L.P., a Delaware limited partnership controlled by KKR, continues to
beneficially own a significant percentage of our outstanding common stock.
Our Business Model
Our long history of profitable growth is founded on a commitment to a relatively simple business
model: providing a broad base of customers with their basic everyday and household needs,
supplemented with a variety of general merchandise items, at everyday low prices in conveniently
located, small-box stores. We continually evaluate the needs and demands of our customers and modify
our merchandise selections and pricing accordingly, while remaining focused on increasing profitability
for our shareholders.
Fiscal year 2011 represented our 22nd consecutive year of same-store sales growth. This growth,
regardless of economic conditions, suggests that we have a less cyclical model than most retailers and,
we believe, is a result of our compelling value and convenience proposition.
Our attractive store economics, including a relatively low initial investment and simple, low cost
operating model, have allowed us to grow our store base to current levels, and provide us significant
opportunities to continue our profitable store growth strategy.
Compelling Value and Convenience Proposition. Our ability to deliver highly competitive prices on
national brand and quality private brand products in convenient locations and our easy in and out
shopping format create a compelling shopping experience that distinguishes us from other discount,
convenience and drugstore retailers. Our slogan, ‘‘Save time. Save money. Every day!’’ summarizes our
appeal to customers. We believe our ability to effectively deliver both value and convenience allows us
to succeed in small markets with limited shopping alternatives, as well as to profitably coexist alongside
larger retailers in more competitive markets. Our compelling value and convenience proposition is
evidenced by the following attributes of our business model:
•Convenient Locations. Our stores are conveniently located in a variety of rural, suburban and
urban communities, currently with approximately 70% serving communities with populations of
less than 20,000. In more densely populated areas, our small-box stores typically serve the closely
surrounding neighborhoods. The majority of our customers live within three to five miles, or a
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