Pep Boys 2010 Annual Report Download - page 3

THE PEP BOYS −MANNY, MOE & JACK
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
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LETTER TO OUR SHAREHOLDERS
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2010 was another rewarding year for The Pep Boys - Manny, Moe & Jack, thanks again to our associates and
their passionate commitment to our customers. Our vision is to be The Automotive Solutions Provider of Choice
for the Value Oriented Customer, with three primary objectives relative to our customers, our associates and our
shareholders:
• Earn the TRUST of our customers every day
• Be the Preferred Employer in the automotive after-market
• Achieve a high-teen pre-tax return on invested capital
We have spent the past three years building our business model from the ground up to deliver on these objectives
in a sustainable manner. In 2009, we made more money than we had in the previous twelve years combined. In
2010, we improved on that by 59%. We have completed the turnaround phase of our story, but continue to work on
additional opportunities to improve the profitability of our base business - like closing gross margin leaks, improving
operating efficiencies and further leveraging our payables. At the same time, we have built a solid foundation upon
which to launch our growth phase.
We employ four strategies to achieve our vision to be The Automotive Solutions Provider of Choice for the
Value Oriented Customer.
Earn the TRUST of Our Customers Every Day. We do this by serving them with Speed, Expertise and
Respect and providing the best Value. We measure this through Net Promoter Scores via customer surveys
conducted on-line and through outbound calls. Our Net Promoter Scores have improved in each of the last
seven years. This year we are starting to supplement this metric with customer acquisition and retention data
from our recently developed customer database. This will allow us to measure actual customer behavior, in
addition to their reported intentions. Our rewards membership is now over 12 million - in just 23 months.
We are also using customer data to improve our processes for the benefit of our customers. We are making
it easier for our associates to be successful in serving our customers, as we strive for Execution Excellence.
E-serve, which includes appointment scheduling for tires and service, is a great example of improving the
way we serve our customers. You can check it out at pepboys.com and be sure to visit pepboys.com
regularly because we are constantly updating and improving our on-line presence.
The customer experience starts with our associates, which is why we established our objective of being the
Preferred Employer in the automotive after-market. We have put into place and continue to improve our
hiring, training, development and two-way communication practices, as well as, our performance-based
compensation and benefit plans. Just as important, we continue to focus on the development of the leaders in
our stores.
Lead with Our Service Business and Grow through Service & Tire Centers. We are a national, full
service - tires, maintenance and repair - shop. We leverage our retail and commercial businesses to buy our
parts directly from the manufacturers, and we pass those savings on to our customers in the form of lower
prices. Pep Boys Does Everything. For Less. We have ASE-certified technicians on staff at all times. We
invest in the latest equipment. We have a well-developed training program for all positions in the store. We
know that when customers rely on us every day to keep their cars and trucks running properly, we can provide
all the necessary services at the lowest total cost.