Family Dollar 2012 Annual Report Download - page 9

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In fiscal 2012, we continued our comprehensive store renovation program 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 navigational signage and 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 and improved 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.
As of the end of fiscal 2012, more than 2,600 stores utilized this new format, and we plan to continue to
aggressively renovate more stores in our chain. During fiscal 2013, we expect to renovate, relocate or expand
approximately 850 stores. While we are maintaining an ambitious pace, it will take us several years to fully
transform the chain.
In fiscal 2012, we maintained a strong focus on increasing our relevancy with customers and driving sales
productivity in our stores by expanding our merchandise selection and adding new consumer brands to our
assortment. To drive traffic and increase our relevancy, we significantly expanded our food and health and
beauty aid assortments. In addition to these expanded assortments, we have added new consumer brands to our
stores, including Pepsi, Red Bull, and Wise Snacks. Our customers responded favorably to our expanded
consumables assortment and our consumables sales increased by more than 13% to 69% of our total sales in
fiscal 2012. We expect this trend to continue in fiscal 2013 and believe our expanded assortment in consumables
has positioned us well for continued sales growth.
Maintaining our focus on increasing our relevancy with our customer and increasing sales productivity in
our stores, 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 in more than 6,000 of our stores.
In fiscal 2012, with the comprehensive store renovation program, the significant expansion of consumables,
and the introduction of tobacco products, almost every store in our chain has been improved to serve customers
better. As a result, we have strengthened the Family Dollar brand and our customer satisfaction scores and
overall value perception remain strong (based on the results of internal customer service surveys).
Deliver profitable sales growth
Several years ago, we slowed new store growth to focus more on improving returns in existing stores and
the chain overall. Over this period, we completed an end-to-end re-engineering of our merchandising and supply
chain processes, enhanced productivity of our store teams, refreshed our store technology platform, and created a
store layout for new stores that is more convenient and easier to shop. As a result of these investments, we
upgraded our operational capabilities, increased profitability, gained productivity, and expanded our financial
returns. More importantly, these investments have provided us with a strong foundation to accelerate revenue
growth.
In fiscal 2010, we announced our intention to return to square footage growth of 5% to 7% by fiscal 2013.
With the significant progress we achieved in building the pipeline, we achieved this goal in fiscal 2012, a year
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