Pep Boys 2013 Annual Report Download - page 76

current transaction, but ultimately to the customer choosing Pep Boys for all of their automotive needs
in the future. Information gathered through our rewards program, customer surveys and focus groups
helps us to understand the customer experience that our target customer segments expect and the
services and products that will best meet their needs and desires.
Provide the best assortment and shopping experience in the automotive aftermarket. We begin
by being a full service—tire, maintenance and repair—shop. Our full service capabilities, ASE
(Automotive Service Excellence) certified technicians and continuous investment in training and
equipment allow customers to rely on us for all of their automotive maintenance and repair needs—
from replacing the oil in their engine to replacing the engine itself. By offering a broad assortment of
branded and private label products, we enjoy a competitive advantage over many of our DIFM
competitors.
The size of our Supercenters allows us to provide the highest level of replacement parts coverage
and the broadest range of maintenance, performance and appearance products and accessories in the
industry. We are able to leverage our Superhub stores, which have a larger assortment of product than
our normal Supercenter, to satisfy customer needs for slow-moving product by delivering this product
to requesting Supercenters on demand. We are also expanding our Speed Shops (106 as of the end of
fiscal 2013), a store-in-a-store within existing Supercenters that creates a differentiated retail experience
for automotive enthusiasts by stocking high-performance and specialty products. We are similarly
focused on price optimization and inventory rationalization opportunities.
We are currently testing a new market concept that we call the ‘‘Road Ahead,’’ which began in the
first quarter of fiscal 2013 with a re-grand opening of our West Hillsboro, Florida location. Due to the
success at this store we converted the balance of our Tampa, Florida market to this concept in the
fourth quarter of fiscal 2013. The early results have also been encouraging and as a result we will
convert an additional 20 Supercenters in three markets to this concept in the first half of fiscal 2014
and have initiated plans for an additional three markets for the back half of fiscal 2014, through the
early part of fiscal 2015. Designed around the shopping habits of our target customer segments, this
concept enhances the entire store—our people, the product assortment, its exterior and interior look
and feel and the marketing programs—to learn how we can be successful in attracting more of these
target customers and earn a greater share of their annual spend in the automotive aftermarket. Our
Road Ahead strategy also allows us to use our retail business to drive the service business with free
professional battery and wiper installations.
Tell our story internally and externally. It is essential to our success that our associates and
consumers understand our vision and brand position. As consumers had come to understand the
breadth and depth of our offerings and gave us credit for our value proposition, in fiscal 2013 we
turned our attention to focusing our message on the customer experience that we believe our target
customer segments desire but have been unable to find in the automotive aftermarket. Consistent with
our strategy described above, our TRUST THE BOYS TO GET YOU THERE brand positioning
shifted from a more promotional message to a more customer service oriented message. This message
is conveyed to our associates through corporate communications and leadership training, while tailored
marketing plans including TV and radio promotions, digital media, direct marketing, grass-roots and
print campaigns deliver the message to our target customer segments.
STORE IMPROVEMENTS
In fiscal 2013, our capital expenditures totaled approximately $65.0 million which included the
acquisition of 18 Service and Tire Centers in Southern California. Our fiscal 2013 capital expenditures
also included the addition of 29 new locations, the conversion of 11 Supercenters into Superhubs, the
addition of 63 Speed Shops within existing Supercenters and required expenditures for existing stores,
offices and distribution centers. Our fiscal 2014 capital expenditures are expected to be approximately
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