Pep Boys 2014 Annual Report Download - page 19

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difficult or impossible to import into the United States, and if we cannot obtain such merchandise from
other sources at similar costs, our sales and profit margins may be negatively affected.
In the event that commercial transportation is curtailed or substantially delayed, our business may
be adversely impacted, as we may have difficulty receiving merchandise from our suppliers and shipping
it to our stores.
Terrorist attacks, war, or insurrection involving any oil producing country would likely result in an
abrupt increase in the price of crude oil, gasoline, diesel fuel and other types of energy. Such price
increases would increase the cost of doing business for us and our suppliers, and also would negatively
impact our customers’ disposable income and have an adverse impact on our business, sales, profit
margins and results of operations.
We rely extensively on our computer systems and the systems of our business partners to manage
inventory, process transactions and report results. Any such systems are subject to damage or
interruption from power outages, telecommunication failures, computer viruses, security breaches and
catastrophic events. If our computer systems or those of our business partners fail we may experience
loss of critical data and interruptions or delays in our ability to process transactions and manage
inventory. Any such loss, if widespread or extended, could adversely affect the operation of our
business and our results of operations.
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;
• 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; and
• online retailers
Commercial
• mass and on-line 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;
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