Dollar General 2011 Annual Report Download - page 115

10-K
Natural disasters (whether or not caused by climate change), unusual weather conditions, pandemic
outbreaks, terrorist acts, and global political events could cause permanent or temporary distribution center or
store closures, impair our ability to purchase, receive or replenish inventory, or decrease customer traffic, all
of which could result in lost sales and otherwise adversely affect our financial performance.
The occurrence of one or more natural disasters, such as hurricanes, fires, floods, and earthquakes
(whether or not caused by climate change), solar flares, unusual weather conditions, pandemic
outbreaks, terrorist acts or disruptive global political events, such as civil unrest in countries in which
our suppliers are located, or similar disruptions could adversely affect our operations and financial
performance. To the extent these events result in the closure of one or more of our distribution centers,
a significant number of stores, or our corporate headquarters or impact one or more of our key
suppliers, our operations and financial performance could be materially adversely affected through an
inability to make deliveries or provide other support functions to our stores and through lost sales. In
addition, these events could result in increases in fuel (or other energy) prices or a fuel shortage, delays
in opening new stores, the temporary lack of an adequate work force in a market, the temporary or
long-term disruption in the supply of products from some domestic and overseas suppliers, the
temporary disruption in the transport of goods from overseas, delay in the delivery of goods to our
distribution centers or stores, the temporary reduction in the availability of products in our stores and
disruption of our utility services or to our information systems. These events also can have indirect
consequences such as increases in the costs of insurance if they result in significant loss of property or
other insurable damage.
Material damage or interruptions to our information systems as a result of external factors, staffing
shortages and unanticipated challenges or difficulties in updating our existing technology or developing or
implementing new technology could have a material adverse effect on our business or results of operations.
We depend on a variety of information technology systems for the efficient functioning of our
business. Such systems are subject to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, security breaches and natural disasters. Damage or
interruption to these systems may require a significant investment to fix or replace them, and we may
suffer interruptions in our operations in the interim. Any material interruptions may have a material
adverse effect on our business or results of operations.
We also rely heavily on our information technology staff. Failure to meet these staffing needs may
negatively affect our ability to fulfill our technology initiatives while continuing to provide maintenance
on existing systems. We rely on certain vendors to maintain and periodically upgrade many of these
systems so that they can continue to support our business. The software programs supporting many of
our systems were licensed to us by independent software developers. The inability of these developers
or us to continue to maintain and upgrade these information systems and software programs would
disrupt or reduce the efficiency of our operations if we were unable to convert to alternate systems in
an efficient and timely manner. In addition, costs and potential problems and interruptions associated
with the implementation of new or upgraded systems and technology or with maintenance or adequate
support of existing systems could also disrupt or reduce the efficiency of our operations.
Failure to attract and retain qualified employees, particularly field, store and distribution center
managers, and to control labor costs, as well as other labor issues, could adversely affect our financial
performance.
Our future growth and performance depends on our ability to attract, retain and motivate qualified
employees, many of whom are in positions with historically high rates of turnover such as field
managers and distribution center managers. Our ability to meet our labor needs, while controlling our
labor costs, is subject to many external factors, including competition for and availability of qualified
personnel in a given market, unemployment levels within those markets, prevailing wage rates,
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