O'Reilly Auto Parts 2015 Annual Report Download - page 13

FORM 10-K
5
2015, we relocated 24 stores and renovated 41 stores. We believe that our ability to consistently achieve growth in comparable store
sales is due in part to our commitment to maintaining an attractive store network, which is strategically located to best serve our customers.
Continually Enhance the Growth and Functionality of Our E-Commerce Website:
Our user-friendly website, www.oreillyauto.com, allows our customers to search product and repair content, check the in-store availability
of our products, and place orders for either home delivery or in-store pickup. We continue to enhance the functionality of our website
to provide our customers with a friendly and convenient shopping experience, as well as a robust product and repair content information
resource, which will continue to build the O'Reilly Brand.
Team Members
As of January 31, 2016, we employed 71,943 Team Members (37,879 full-time Team Members and 34,064 part-time Team Members),
of whom 61,411 were employed at our stores, 7,612 were employed at our DCs and 2,920 were employed at our corporate and regional
offices. A union represents 50 stores (538 Team Members) in the Greater Bay Area in California and has for many years. In addition,
approximately 108 Team Members who drive over-the-road trucks in three of our DCs are represented by a labor union. Except for these
Team Members, our Team Members are not represented by labor unions. Our tradition for 59 years has been to treat all of our Team
Members with honesty and respect and to commit significant resources to instill in them our "Live Green" culture, which emphasizes
the importance of each Team Member's contribution to the success of O'Reilly. This focus on professionalism and respect has created
an industry-leading team, and we consider our relations with our Team Members to be excellent.
Store Network
New Store Site Selection:
In selecting sites for new stores, we seek to strategically locate store sites in clusters within geographic areas in order to achieve economies
of scale in management, advertising and distribution. Other key factors we consider in the site selection process are
• population density;
• demographics including age, ethnicity, life style and per capita income;
• market economic strength, retail draw and growth patterns;
• number, age and percent of makes and models of registered vehicles;
• the number, type and sales potential of existing automotive repair facilities;
• the number of auto parts stores and other competitors within a predetermined radius;
• physical location, traffic count, size, economics and presentation of the site;
• financial review of adjacent existing locations; and
• the type and size of store that should be developed.
When entering new, more densely populated markets, we generally seek to initially open several stores within a short span of time in
order to maximize the effect of initial promotional programs and achieve economies of scale. After opening this initial cluster of new
stores, we seek to begin penetrating the less densely populated surrounding areas. As these store clusters mature, we evaluate the need
to open additional locations in the more densely populated markets where we believe opportunities exist to expand our market share or
to improve the level of service provided in high volume areas. This strategy enables us to achieve additional distribution and advertising
efficiencies in each market.
Store Locations and Size:
As a result of our dual market strategy, we are able to profitably operate in both large, densely populated markets and small, less densely
populated areas that would not otherwise support a national chain selling primarily to the retail automotive aftermarket. Our stores, on
average, carry approximately 23,000 SKUs and average approximately 7,200 total square feet in size. At December 31, 2015, we had a
total of approximately 33 million square feet in our 4,571 stores. Our stores are served primarily by the nearest DC, which averages
146,000 SKUs, but also have same-day access to the broad selection of inventory available at one of our 297 Hub stores, which, on
average, carry approximately 44,000 SKUs and average approximately 10,000 square feet in size.
We believe that our stores are ''destination stores'' generating their own traffic rather than relying on traffic created by the presence of
other stores in the immediate vicinity. Consequently, most of our stores are freestanding buildings or prominent end caps situated on or
near major traffic thoroughfares and offer ample parking, easy customer access and are generally located in close proximity to our
professional service provider customers.