Dollar General 2015 Annual Report Download - page 85

10-K
other factors relating to foreign trade and port labor agreements are beyond our control. These and
other factors affecting our suppliers and our access to products could adversely affect our business and
financial performance. As we increase our imports of merchandise from foreign vendors, the risks
associated with these imports also will increase, and we may be exposed to additional or different risks
as we increase imports of goods produced in countries other than China.
Product liability and food safety claims could adversely affect our business, reputation and financial
performance.
Despite our best efforts to ensure the quality, safety and freshness of the products that we sell in
all of our stores, we may be subject to product liability claims from customers or actions required or
penalties assessed by government agencies relating to products, including but not limited to food
products that are recalled, defective or otherwise alleged to be harmful. Such claims may result from
tampering by unauthorized third parties, product contamination or spoilage, including the presence of
foreign objects, substances, chemicals, other agents, or residues introduced during the growing, storage,
handling and transportation phases.
All of our vendors and their products must comply with applicable product and food safety laws,
and we are dependent on them to ensure that the products we buy comply with all applicable safety
standards. We seek but may not be successful in obtaining contractual indemnification and insurance
coverage from our suppliers. If we do not have adequate contractual indemnification or insurance
available, such claims could have a material adverse effect on our business, financial condition and
results of operations. Our ability to obtain indemnification from foreign suppliers may be hindered by
the manufacturers’ lack of understanding of U.S. product liability or other laws, which may result in
our having to respond to claims or complaints from customers as if we were the manufacturer. Even
with adequate insurance and indemnification, such claims could significantly damage our reputation and
consumer confidence in our products. Our litigation expenses could increase as well, which also could
have a materially negative impact on our results of operations even if a product liability claim is
unsuccessful or is not fully pursued.
We are subject to governmental regulations, procedures and requirements. A significant change in, or
noncompliance with, these regulations could have a material adverse effect on our financial performance.
Our business is subject to numerous and increasing federal, state and local laws and regulations.
We routinely incur significant costs in complying with these regulations. The complexity of the
regulatory environment in which we operate and the related cost of compliance are increasing due to
expanding and additional legal and regulatory requirements and increased enforcement efforts. New
laws or regulations, particularly those dealing with environmental compliance, product safety, food
safety, information security and privacy, and labor and employment, among others, or changes in
existing laws and regulations, particularly those governing the sale of products or employee wages, may
result in significant added expenses or may require extensive system and operating changes that may be
difficult to implement and/or could materially increase our cost of doing business. Untimely compliance
or noncompliance with applicable regulations or untimely or incomplete execution of a required
product recall, can result in the imposition of penalties, including loss of licenses or significant fines or
monetary penalties, class action litigation or other litigation, in addition to reputational damage.
Additionally, changes in tax laws, the interpretation of existing laws, or our failure to sustain our
reporting positions on examination could adversely affect our effective tax rate.
Litigation may adversely affect our business, results of operations and financial condition.
Our business is subject to the risk of litigation by employees, consumers, suppliers, competitors,
shareholders, government agencies and others through private actions, class actions, administrative
proceedings, regulatory actions or other litigation. Nationally, the number of employment-related class
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