Family Dollar 2012 Annual Report Download - page 30

• We renovated, relocated or expanded 854 stores under our comprehensive store renovation program.
This program is intended to increase our competitiveness and sales productivity by transforming the
customer’s shopping experience in a Family Dollar store. As a part of this program, we: expanded key
consumable 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.
• With a strong focus on increasing our relevancy with customers and driving sales productivity, we
significantly expanded our merchandise selection in both food and health and beauty aids and added
new consumer brands.
• We added tobacco products to our assortment in fiscal 2012. Based on our customer research, our
customers are more likely to use tobacco products, and our customers who smoke make more shopping
trips per year. With the addition of tobacco products to our assortment, we expect that we will drive
trips to our stores to not only purchase tobacco products, but other products from our existing
assortment while customers are in the store. At the end of fiscal 2012, tobacco products were being
sold in more than 6,000 of our stores.
• We made significant progress in increasing our penetration of private brands. In fiscal 2012, private
brands sales increased by approximately 9% over fiscal 2011. Private brands consumable sales
performed especially well, increasing by 16% over fiscal 2011. In fiscal 2012, private brands sales
represented approximately 25% of total sales and approximately 17% of total consumable sales.
Fiscal 2013 Outlook
Building on the improvements we made over the past several years, we plan to continue to execute on our
initiatives designed to increase our relevancy with customers, deliver profitable sales growth, and strengthen our
value and convenience proposition in fiscal 2013.
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. During fiscal 2013, we
plan to open approximately 500 new stores, which we expect will sustain our square footage growth goal of 5%
to 7%, which we achieved in fiscal 2012. During fiscal 2013, we plan to renovate, relocate or expand
approximately 850 stores.
In fiscal 2012, we formed a six year, exclusive partnership with McLane Company, Inc., a highly successful
supply chain services company. This partnership will allow us to carry a consistent assortment and improve our
in-stock levels in our refrigerated and frozen merchandise, consolidate a fragmented network of many regional
wholesalers to one national wholesaler, and distribute tobacco products to our stores efficiently. All of these
improvements are expected to drive additional trips into our stores. McLane will also distribute selected
categories outside of refrigerated and frozen merchandise, providing flexibility to our distribution network for
potential new SKUs. McLane began delivering merchandise to our stores in September 2012.
Building on the momentum of private brands growth in fiscal 2012, we intend to increase our penetration of
private brands even further in fiscal 2013. 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 brands program through increased marketing and visual merchandising
support.
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