Dollar General 2015 Annual Report Download - page 78

10-K
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:
2015 2014 2013
Consumables ..................................... 75.9% 75.7% 75.2%
Seasonal ........................................ 12.4% 12.4% 12.9%
Home products ................................... 6.3% 6.4% 6.4%
Apparel ......................................... 5.4% 5.5% 5.5%
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 is operated by a store manager, one or more assistant store
managers, and three or more sales associates. Our stores generally feature 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 deliver low retail prices while generating strong cash flows
and investment returns. Our stores average approximately 7,400 square feet of selling space and
approximately 70% of our stores are located in towns of 20,000 or fewer people. We generally have had
good success in locating suitable store sites in the past, and we believe that there is ample opportunity
for new store growth in existing and new markets. In addition, we believe we have significant
opportunities available for our relocation and remodel programs.
Our store growth over the past three years is summarized in the following table:
Stores at Net
Beginning Stores Stores Store Stores at
Year of Year Opened Closed Increase End of Year
2013 ....................... 10,506 650 24 626 11,132
2014 ....................... 11,132 700 43 657 11,789
2015 ....................... 11,789 730 36 694 12,483
Our Customers
Our customers seek value and convenience. Depending on their financial situation and geographic
proximity, customers’ reliance on Dollar General varies from fill-in shopping, to making periodic trips
to stock up on household items, to making weekly or more frequent trips to meet most essential needs.
We generally locate our stores and plan our merchandise selections to best serve the needs of our core
customers, the low and fixed income households often underserved by other retailers, and we are
focused on helping them make the most of their spending dollars. At the same time, however, loyal
Dollar General shoppers from a wide range of income brackets and life stages appreciate our quality
merchandise as well as our attractive value and convenience proposition.
Our Suppliers
We purchase merchandise from a wide variety of suppliers and maintain direct buying relationships
with many producers of national brand merchandise. Despite our broad offering, we maintain only a
limited number of items per category, giving us a pricing advantage in dealing with our suppliers. Our
largest and second largest suppliers each accounted for approximately 7% of our purchases in 2015.
4