Dollar General 2013 Annual Report Download - page 82

Our Merchandise
We offer a focused assortment of everyday necessities, which drive frequent customer visits, and
key items in a broad range of general merchandise categories. Our product assortment provides the
opportunity for our customers to address most of their basic shopping needs with one trip. We sell
high-quality national brands from leading manufacturers such as Procter & Gamble, PepsiCo,
Coca-Cola, Nestle, General Mills, Unilever, Kimberly Clark, Kellogg’s and Nabisco, which are typically
found at higher retail prices elsewhere. Additionally, our private brand consumables offer even greater
value with options to purchase value items and national brand equivalent products at substantial
discounts to the national brand.
Our stores generally offer approximately 10,000 total SKUs per store; however, the number of
SKUs in a given store can vary based upon the store’s size, geographic location, merchandising
initiatives, seasonality, and other factors. Most of our products are priced at $10 or less, with
approximately 25% at $1 or less. We separate our merchandise into four categories: 1) consumables;
2) seasonal; 3) home products; and 4) apparel.
Consumables is our largest category and includes paper and cleaning products (such as paper
towels, bath tissue, paper dinnerware, trash and storage bags, laundry and other home cleaning
supplies); packaged food (such as cereals, canned soups and vegetables, condiments, spices, sugar and
flour); perishables (such as milk, eggs, bread, frozen meals, beer and wine); snacks (including candy,
cookies, crackers, salty snacks and carbonated beverages); health and beauty (including
over-the-counter medicines and personal care products, such as soap, body wash, shampoo, dental
hygiene and foot care products); pet (including pet supplies and pet food); and tobacco products.
Seasonal products include decorations, toys, batteries, small electronics, greeting cards, stationery,
prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies.
Home products includes kitchen supplies, cookware, small appliances, light bulbs, storage
containers, frames, candles, craft supplies and kitchen, bed and bath soft goods.
Apparel includes casual everyday apparel for infants, toddlers, girls, boys, women and men, as well
as socks, underwear, disposable diapers, shoes and accessories.
The percentage of net sales of each of our four categories of merchandise for the fiscal years
indicated below was as follows:
2013 2012 2011
Consumables .................................... 75.2% 73.9% 73.2%
Seasonal ....................................... 12.9% 13.6% 13.8%
Home products .................................. 6.4% 6.6% 6.8%
Apparel ........................................ 5.5% 5.9% 6.2%
Our seasonal and home products categories typically account for the highest gross profit margins,
and the consumables category typically accounts for the lowest gross profit margin.
The Dollar General Store
The typical Dollar General store has, on average, approximately 7,400 square feet of selling space
and is typically operated by a store manager, an assistant store manager and three or more sales
associates. Approximately 66% of our stores are in freestanding buildings and 34% are in strip
shopping centers. Most of our customers live within three to five miles, or a 10 minute drive, of our
stores.
Our typical store features a low cost, no frills building with limited maintenance capital, low
operating costs, and a focused merchandise offering within a broad range of categories, allowing us to
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