Pep Boys 2011 Annual Report Download - page 57
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Please find page 57 of the 2011 Pep Boys annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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aftermarket to retain and attract qualified personnel. In addition, we believe that the number of
qualified automotive service technicians in the industry is generally insufficient to meet demand.
We are subject to environmental laws and may be subject to environmental liabilities that could have a
material adverse effect on us in the future.
We are subject to various federal, state and local environmental laws and governmental regulations
relating to the operation of our business, including those governing the handling, storage and disposal
of hazardous substances contained in the products we sell and use in our service bays, the recycling of
batteries, tires and used lubricants, the ownership and operation of real property and the sale of small
engine merchandise. When we acquire or dispose of real property or enter into financings secured by
real property, we undertake investigations that may reveal soil and/or groundwater contamination at the
subject real property. All such known contamination has either been remediated, or is in the process of
being remediated. Any costs expected to be incurred related to such contamination are either covered
by insurance or financial reserves provided for in the consolidated financial statements. However, there
exists the possibility of additional soil and/or groundwater contamination on our real property where we
have not undertaken an investigation. A failure by us to comply with environmental laws and
regulations could have a material adverse effect on us.
Risks Related to Our Industry
Our industry is highly competitive, and price competition in some segments of the automotive aftermarket
or a loss of trust in our participation in the ‘‘do-it-for-me’’ market, could cause a material decline in our
revenues and earnings.
The automotive aftermarket retail and service industry is highly competitive and subjects us to a
wide variety of competitors. We compete primarily with the following types of businesses in each
segment of the automotive aftermarket:
Retail
Do-It-Yourself
• automotive parts and accessories stores;
• automobile dealers that supply manufacturer replacement parts and accessories; and
• mass merchandisers and wholesale clubs that sell automotive products and select non-automotive
merchandise that appeals to automotive ‘‘Do-It-Yourself’’ customers, such as generators, power
tools and canopies.
Commercial
• mass merchandisers, wholesalers and jobbers (some of which are associated with national parts
distributors or associations).
Service
Do-It-For-Me
• regional and local full service automotive repair shops;
• automobile dealers that provide repair and maintenance services;
• national and regional (including franchised) tire retailers that provide additional automotive
repair and maintenance services; and
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