Family Dollar 2009 Annual Report Download - page 3

Dear Fellow Shareholder,
2009 was a year of celebration at Family Dollar. Fifty years ago, we opened our first store in Charlotte, North
Carolina. In the span of half a century, we’ve grown to more than 6,600 stores in 44 states. 2009 was also the
30th anniversary of our initial listing on the New York Stock Exchange. As if in celebration of these
anniversaries, 2009 also brought the Company record earnings.
As we commemorate these significant milestones in our history, it is important to remember those who are
responsible for our success: our customers. In today’s difficult economy, many consumers have faced severe
financial pressures and have needed, more than ever, the value and convenience that Family Dollar provides.
To serve our customers better, we made significant investments in fiscal 2009 to strengthen the appeal and
quality of our assortment and improve the shopping experience in our stores. We expanded our food assortment
by more than 200 new items, and we realigned space in more than half of our stores to accommodate more of the
consumable products that our customers need. We improved our customers’ shopping experience with stronger
merchandise adjacencies, better signage and cleaner aisles. And, we accelerated the rollout of our new point-of-
sale system, which allows us to accept food stamps and other forms of tender, giving our customers more
payment options in more of our stores.
As a result of these efforts, we are attracting new shoppers, and our core customers are shopping with us more
often and spending more each trip. While other retailers have curtailed their new store growth or closed down all
together, Family Dollar has continued to expand, opening 180 new stores in fiscal 2009.
In addition to our relentless focus on customers, we are dedicated to recruiting and retaining talented team
members to help build upon our success. We have made great strides in stabilizing our workforce, especially in
stores, where the benefit of experienced store teams has the greatest impact on customers. I am especially pleased
that, today, our store manager and assistant manager retention are at historically high levels. Recognizing the
impact of effective leadership, we continue to invest to develop strong leaders, to empower individuals to make
decisions and to build stronger teams that will meet the challenges of the next fifty years. These efforts will
continue to ensure Family Dollar’s success in a competitive retail environment.
From a shareholder perspective, fiscal 2009 was a strong year. We began fiscal 2009 with the goal of increasing
market share, mitigating inventory risk and containing costs. I am pleased to report that we made significant
strides in each of these areas.
• We expanded our market share, increasing both trips and average spend with our core, low-income customer
and more middle-income customers.
• We expanded our assortment of consumables while constraining purchases of more discretionary categories.
As a result, we reduced markdowns and lowered average inventory levels, increasing inventory
productivity.
• We managed merchandise margins better and contained costs, resulting in 95 basis points of operating
margin expansion and double-digit earnings growth.
As we move past this year’s milestones, our management team is looking to the future. Our company will
continue to grow, to evolve into a better and stronger company, but our vision will remain unchanged…to focus
our every thought and effort upon meeting the needs of our customers. With a renewed commitment to that
vision and to our mission, we are confident that Family Dollar will be a more compelling place to shop, work and
invest for the next fifty years.
Sincerely,
Howard R. Levine
Chairman of the Board and Chief Executive Officer