Petsmart 2005 Annual Report Download - page 24

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In its first full year, we expect a new store to generate approximately $3.0 million in sales. We expect new
stores to generate comparable store sales growth in the range of 19% to 21% in year two, 11% to 13% in year three,
8% to 9% in year four and 6% to 7% in year five. We believe there is a potential for a total of at least 1,400 PetSmart
stores in North America. We expect to open approximately 90 net new stores in fiscal 2006.
Distribution
Our improved distribution network, combined with improved and integrated information systems, can
optimize store inventory, and drives more efficient use of store labor, improved in-stock positions and better
distribution center productivity. We currently employ a hybrid distribution system including full truckload
shipments to individual stores and the splitting of full truckloads among several closely located stores and
distribution centers. Our forward distribution centers handle products that require rapid replenishment. Our
suppliers generally ship our merchandise to one of our distribution centers or forward distribution centers, which
receive and allocate merchandise to our stores. We contract the transportation of merchandise from our distribution
centers to stores through third-party vendors, and we do not own any trailers. We operate the following distribution
centers:
Location
Square
Footage Date Opened Distribution Type
Brockport, New York. . . 392,000 February 1990 Catalog, internet, store and equine distribution center
Phoenix, Arizona ...... 447,000 May 1996 Distribution center
Ennis, Texas ......... 230,000 November 1999 Forward distribution center
Columbus, Ohio ...... 613,000 September 2000 Distribution center
Gahanna, Ohio ....... 276,000 October 2000 Forward distribution center
Hagerstown, Maryland . . 252,000 October 2000 Forward distribution center
Newnan, Georgia ...... 200,000 April 2001 Forward distribution center
Phoenix, Arizona ...... 173,000 September 2001 Forward distribution center
Reno, Nevada ........ 199,000 June 2002 Forward distribution center
Ottawa, Illinois ....... 1,000,000 August 2005 Distribution center
In January 2006, we entered into an agreement to lease approximately 877,500 square feet in Newnan, Georgia
to be used as a distribution center. We expect this facility to open in fiscal 2007, and it will replace the current
200,000 square foot forward distribution center we currently lease in Newnan, Georgia.
Information Systems
During fiscal 2005, we continued to enhance our information systems including, but not limited to, the
following:
• Implemented a new inventory planning platform to ensure a strong in-stock position;
• Implemented supply chain systems at our new distribution center in Ottawa, Illinois; and
• Implemented web based tools to enhance communications with and improve the productivity of our
associates and to provide the business with easy-to-access, actionable data.
Merchandise
Merchandise, which has been decreasing as a percentage of net sales due to the higher growth rate in services,
represented approximately 92% of our net sales in fiscal 2005, 93% in fiscal 2004, and 94% in fiscal 2003, and
generally falls into three main categories:
•Pet Food, Treats and Litter. We emphasize premium dog and cat foods, many of which are not available in
supermarkets, warehouse clubs or other mass and retail merchandisers. We also offer quality national brands
traditionally found in supermarkets and pet stores. The sale of pet food, treats and litter comprised 39% of
our net sales in fiscal 2005, 2004 and 2003.
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