Pep Boys 2010 Annual Report Download - page 80

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expect to see a negative impact on miles driven. However, we cannot predict future fluctuations in
gasoline prices, nor the ultimate impact of such fluctuations on miles driven in future periods. There
are also various factors occurring within the current economy that affect both our consumer and our
industry, including the impact of the recent recession, higher unemployment and a tighter credit
environment, which we believe have aided our sales of non-discretionary product and services as
customers have focused on maintaining their existing vehicles rather than purchasing new vehicles.
Despite the recent increase in new car sales (which still remain significantly below historical levels), the
median age of the U.S. light vehicle fleet continues to trend in our industry’s favor. Given the nature of
these macroeconomic factors, we cannot predict whether or for how long these trends will continue,
nor can we predict to what degree these trends will impact us in the future. However, these same
trends have negatively impacted sales in our discretionary product categories like accessories and
complementary merchandise since fiscal 2009, although the rate of decline has moderated significantly
since then.
In 2010, we continued our ‘‘surround sound’’ media campaign that utilizes television, radio and
direct mail advertising to communicate our ‘‘DOES EVERYTHING. FOR LESS.’’ brand vision and
focused on ‘‘execution excellence’’ in our stores in order earn the TRUST of our customers every day.
We believe these efforts are responsible for increased customer traffic in our stores in all lines of
business for fiscal 2010.
RESULTS OF OPERATIONS
The following discussion explains the material changes in our results of operations for the years
ended January 29, 2011 and January 30, 2010 and January 31, 2009.
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