Pep Boys 2010 Annual Report Download - page 65

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SUPPLIERS
During fiscal 2010, the Company’s ten largest suppliers accounted for approximately 53% of the
merchandise purchased. No single supplier accounted for more than 20% of the Company’s purchases.
The Company has no long-term contracts under which it is required to purchase merchandise.
Management believes that the relationships the Company has established with its suppliers are
generally good.
In the past, the Company has not experienced difficulty in obtaining satisfactory sources of supply
and believes that adequate alternative sources of supply exist, at similar cost, for the types of
merchandise sold in its stores. Recently, however, due to industry-wide supply constraints, the Company
has experienced some difficulty in obtaining the full amount of its desired tire supply from its current
suppliers and, accordingly, is pursuing relationships with supplemental suppliers.
COMPETITION
The Company operates in a highly competitive environment. The Company encounters competition
from nationwide and regional chains and from local independent service providers and merchants. The
Company’s competitors include general, full range, discount or traditional department stores which
carry automotive parts and accessories and/or have automotive service centers, as well as specialized
automotive retailers. Generally, the specialized automotive retailers focus on either the ‘‘do-it-yourself’’
or ‘‘do-it-for-me’’ areas of the business. The Company believes that its operation in both the
‘‘do-it-for-me’’ and ‘‘do-it-yourself’’ areas of the business positively differentiates it from most of its
competitors. However, certain competitors are larger in terms of sales volume, store size, and/or
number of stores. Therefore, these competitors have access to greater capital and management
resources and have been operating longer or have more stores in particular geographic areas than the
Company. The principal methods of competition in our industry include store location, customer
service, product offerings, quality and price.
REGULATION
The Company is subject to various federal, state and local laws and governmental regulations
relating to the operation of its business, including those governing the handling, storage and disposal of
hazardous substances contained in the products it sells and uses in its service bays, the recycling of
batteries, tires and used lubricants, the sale of small engine merchandise and the ownership and
operation of real property.
EMPLOYEES
At January 29, 2011, the Company employed 18,279 persons as follows:
Description Full-time % Part-time % Total %
Retail ................................. 3,945 31.7 4,093 70.1 8,038 44.0
Service center ........................... 7,201 57.9 1,668 28.6 8,869 48.5
Store total .............................. 11,146 89.6 5,761 98.7 16,907 92.5
Warehouses ............................. 539 4.3 71 1.2 610 3.3
Offices ................................ 756 6.1 6 0.1 762 4.2
Total employees .......................... 12,441 100.0 5,838 100.0 18,279 100.0
The Company had no union employees as of January 29, 2011. At January 30, 2010, the Company
employed 11,881 full-time and 5,837 part-time employees.
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