Family Dollar 2013 Annual Report Download - page 11

During fiscal 2013, we continued to increase our organizational focus on being more store-centric. We
created cross-functional teams to identify opportunities to improve service to stores, including the pallet delivery
program. In support of this initiative the Corporate Office was renamed the Store Support Center. This year we
also implemented a Field Human Resources (HR) Support team consisting of HR Managers to provide our field
leadership with support in areas such as talent development and team relations.
In fiscal 2013, we also continued to strengthen our management team, with key changes in Merchandising,
Marketing, Store Operations and Real Estate. We continued to refine and enhance our semi-annual succession
planning process. We expanded our leadership development program to stores and distribution centers, where a
talent pipeline is needed to support ongoing growth and team stabilization. We also introduced a centralized
learning platform through which all Team Members can develop their leadership competencies, business acumen
and job skills to help them plan and advance their careers. We continue to invest in leadership training, with a
strong emphasis on coaching and communication skills to stabilize our store teams, which is critical to our future
success.
Overview of our Business Operations
Our Customers
Our strategy of providing customers with value and convenience continues to attract customers in a wide
range of income brackets, ethnicity groups, and life stages. Our offerings are particularly attractive to consumers
in the low to lower-middle income brackets or fixed income households. Depending on their financial situation
and geographic proximity, customers rely on Family Dollar for weekly fill-in shopping trips for essential needs
or for periodic trips to stock up on household items. To attract new and retain existing customers, we continue to
focus on product quality and selection, value, convenient locations, improved store standards, and a pleasant
overall customer experience.
Our Stores
A Family Dollar store is typically between 7,500 and 9,500 square feet, with an average of approximately
7,200 square feet of selling space. Our stores generally serve customers who live within three to five miles of the
store. At the end of fiscal 2013, we operated 7,916 stores, totaling 56.8 million selling square feet.
Approximately 24% of our stores were located in large urban markets, and approximately 20% of our stores were
located in small urban markets or suburban areas. Approximately 58% of our stores were in strip malls, 40%
were in freestanding buildings and 2% were in downtown buildings.
The relatively small size of a Family Dollar store allows us to select store locations that provide
neighborhood convenience to our customers in each of these market areas. Family Dollar stores are generally
open seven days a week and typically operate between the hours of 8:00 a.m. and 9:00 p.m. Our stores accept
cash, checks, debit cards, credit cards, and other electronic payment types, including food stamps.
Our Merchandise
We provide customers with a quality assortment of basic necessities and seasonal merchandise at everyday
low prices. While the number of SKUs in a given store can vary based upon the store’s size, geographic location,
merchandising initiatives, and other factors, our typical store generally carries approximately 6,500 to 7,000
basic SKUs, with fluctuations in seasonal items throughout the year. The majority of our products are priced at
$10 or less, with approximately 27% priced at $1 or less. Our stores operate on a self-service basis, and our low
overhead enables us to sell merchandise at a relatively moderate markup. In fiscal 2013, we expanded both the
number of trips that our customers make as well as the amount spent during each trip, which averaged around
$10.50.
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