Family Dollar 2011 Annual Report Download - page 29

categories and created more intuitive merchandise adjacencies; improved the navigational signage;
leveraged new fixtures that enhance customer sightlines, increase capacity, and simplify restocking and
recovery processes; created a warmer, more inviting shopping environment that includes a refresh of
the building façade and exterior signage; raised store standards; improved store operating processes
and leveraged technology to increase workforce productivity; and raised our customer service
standards by strengthening our Team Member engagement with enhanced training, improved
recognition programs and more consistent Team Member branding.
• To respond to customer demand, provide our customers with more value and convenience, and increase
productivity in all stores, we significantly expanded our merchandise assortment in both food and
health and beauty aids in stores that were not renovated in fiscal 2011, in addition to the stores we
renovated. Our objective was to drive traffic with an expanded selection of consumables while also
driving a larger basket with more impulse purchases and greater in-store excitement. In fiscal 2011, we
completed this expansion in more than 5,700 stores.
• We made significant progress in increasing our penetration of private brands. In fiscal 2011, private
brands sales increased by approximately 22% over fiscal 2010. Private brands consumable sales
performed especially well, increasing by 26% over fiscal 2010. In fiscal 2011, private brands sales
represented approximately 25% of total sales and approximately 16% of total consumable sales.
• We launched an initiative designed to help us leverage our workforce more effectively, improve store-
level execution and increase workforce productivity. Through this effort, we re-engineered many of our
core store processes, including shelf re-stocking, the check-out experience, store recovery and in-store
merchandising. Through the application of new technology and processes, we implemented new time
and attendance procedures, addressed workflow and task management, and improved store-level
execution. This has allowed us to more effectively manage store labor, a significant portion of our core
expenses.
Fiscal 2012 Outlook
Building on the improvements we made over the past several years, we plan to continue to execute on our
initiatives designed to deliver profitable sales growth, accelerate new store openings, and strengthen our value
and convenience proposition in fiscal 2012.
Our new store performance has improved significantly in the last several years as a result of the utilization
of stronger site selection tools as well as enhancements driven by our strategic initiatives. Our operational
improvements, combined with softening real estate markets and a growing customer base, have resulted in
additional opportunities for new store growth. During fiscal 2012, we plan to open between 450 and 500 new
stores, which we expect will achieve our goal of 5% to 7% square footage growth. During fiscal 2012, we plan to
renovate, relocate or expand more than 1,000 stores.
Building on the momentum of private brand growth in fiscal 2011, we intend to increase our penetration of
private brands even further in fiscal 2012. We expect to launch several new brands that will offer our customers
more quality and value while also refreshing a few of our existing brands to broaden their appeal. We intend to
drive greater awareness of our private brand program through increased marketing and visual merchandising
support.
To continue to deliver profitable sales, in fiscal 2012 we plan to continue to expand our Global Sourcing
teams, develop stronger processes to help us integrate our sourcing activities with our category management
efforts, and continue to expand our supplier network. We expect these efforts will continue to increase our
profitability and help to mitigate some margin pressures.
During fiscal 2012, we expect net sales to grow due to the acceleration of our new store growth and an
increase in comparable stores sales. We expect comparable store sales to increase as a result of our current
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