Pep Boys 2009 Annual Report Download - page 63

we added an additional 11 stores to the program and we expect to expand to a total of 150 stores by
the end of the second quarter of fiscal 2010.
The Company has a point-of-sale system in all of its stores, which gathers sales and inventory data
by stock-keeping unit from each store on a daily basis. This information is then used by the Company
to help formulate its pricing, inventory, marketing, and merchandising strategies. The Company has an
electronic parts catalog that allows our employees to efficiently look up the parts that our customers
need and to provide complete job solutions, advice and information for customer vehicles. The
Company has an electronic work order system in all of its service centers. This system creates a service
history for each vehicle, provides customers with a comprehensive sales document and enables the
Company to maintain a service customer database.
The Company primarily uses an ‘‘Everyday Low Price’’ (EDLP) strategy in establishing its selling
prices. Management believes that EDLP provides better value to its customers on a day-to-day basis,
helps level customer demand and allows more efficient management of inventories. On a periodic basis,
the Company employs a promotional pricing strategy on select items and service offers to drive
increased customer traffic.
The Company uses various forms of advertising to promote its service and repair capabilities ,
merchandise offerings and its commitment to customer service and satisfaction. The Company is
committed to an effective promotional schedule with TV and radio promotions that focus on the most
frequently needed services and are scheduled around periods of time when automotive repair and
preventative maintenance are top of mind and relevant to our customers. These promotions will be
supplemented by extensive direct marketing and grass-roots campaigns and occasional print campaigns.
The Company maintains a website located at www.pepboys.com. It serves as an important portal to
our Company, allowing consumers the freedom and convenience to access more information about the
organization, our stores and our service, tires, parts and accessories offerings online. The site also
provides consumers with general and seasonal car care tips, do-it-yourself vehicle maintenance and light
repair guidance and safe driving pointers. Exclusive online coupons are available to site visitors who
register their e-mail addresses with us. These coupons cover special discounts on services and products
at Pep Boys.
In fiscal 2009, approximately 35% of the Company’s total revenues were cash transactions with the
remainder being co-branded credit card, other credit and debit card transactions and commercial credit
accounts.
STORE OPERATIONS AND MANAGEMENT
Most Pep Boys stores are open seven days a week. Each Supercenter has a Retail Manager and
Service Manager (Service & Tire Centers only have a Service Manager while Pep Express stores only
have a Retail Manager) who report to geographic-specific Area Directors and Division Vice Presidents.
The Division Vice Presidents report to the Senior Vice President of Stores who in turn reports to the
Chief Executive Officer. As of January 30, 2010, a Retail Manager’s and a Service Manager’s average
length of service with the Company is approximately 9.3 and 6.3 years, respectively.
Supervision and control over individual stores is facilitated by means of the Company’s computer
system, operational handbooks and regular visits to stores by Area Directors and Divisional Vice
Presidents. All of the Company’s advertising, accounting, purchasing, information technology, and most
of its administrative functions are conducted at its corporate headquarters in Philadelphia,
Pennsylvania. Certain administrative functions for the Company’s regional operations are performed at
various regional offices of the Company. See ‘‘Item 2 Properties.’’
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