Dollar Tree 2011 Annual Report Download - page 5

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e success of
Dollar Tree —
as it has always been
— is based on our
focus on the customer.
We aim our efforts at
increasing the “Wow”
factor, providing high
value merchandise,
improving the quality
of our shopping
environment and
providing the
infrastructure that
supports the business.
allocations, flex our inventory to meet increasing customer demand, improve our in-
stock of basics, and optimize the flow of seasonal product to our stores, consistent with
sales trends. is translates into a better customer experience, improved sell-through
and increased inventory turns.
Logistics
We have a solid and scalable logistics infrastructure to support our nationwide retail
footprint, which we continually upgrade as we provide for sustained, profitable growth.
In 2011, we expanded our Distribution Center in Savannah, Georgia to support
growth in the Southeast. e 410,000 square foot expansion brought the Savannah
facility to one million square feet. is project involved $19.8 million of capital invest-
ment, using existing cash.
Our current network of nine Company-owned DC’s has the capacity to support
$8 billion in annual sales in the United States. Our logistics infrastructure provides
efficient service to our stores today, room for expansion and continuing asset leverage.
Every new store that we open makes our network more efficient.
As has been our practice, we intend to continue to add capacity strategically to sup-
port our growth ahead of the need. In this regard, we are currently finalizing plans to
increase our distribution capacity in the Northeast U.S. by the end of 2013.
Roadmap for the Future: Build New Dollar Tree Stores,
Increase Store Productivity, Develop New Platforms
New Dollar Tree Stores
Dollar Tree opened its first store in 1986. We have expanded every year since and
our growth story continues. Ending the year with 4,351 stores, during 2011, we opened
278 new stores and relocated and expanded 91 stores for a total of 369 projects with
each averaging approximately 10,000 gross square feet. Our plan for 2012 includes 315
new stores and 75 relocations for a total of 390 projects.
Increase Store Productivity
Along with expanding the number of stores, we are focused on operating better, more
productive stores.
Efforts are concentrated on optimum site-selection, on opening new stores
earlier in the year and on right-sizing our stores at about 10,000 – 11,000 square feet, gross.
We believe this to be our optimum size for a number of reasons. It is small enough to be
convenient, but large enough to accommodate a broad assortment of merchandise, includ-
ing the growing selection of needs-based product we’ve added in recent years. Our stores
today offer a compelling mix of things customers need and want—all for just a dollar.
Average new store productivity increased once again in 2011, continuing a six-year trend.
Our expansion of frozen and refrigerated product continues. We installed freezers
and coolers in 376 stores in 2011, including 125 new stores. Frozen and refrigerated
product is now available in 2,220 stores. is product serves the current needs of our
Customers, drives traffic into our stores and provides incremental sales across all cat-
egories—including our higher-margin discretionary product. In 2012, we intend to
expand frozen and refrigerated capability to an additional 325 stores.
While we are growing our business through more stores, the development of new
categories and more productive stores, we are also pursuing New Platforms for growth,
including developing New Formats, adding New Channels of distribution and expanding
our Geographic reach.
Our Deal$ format extends our ability to serve more customers and increases our growth
potential. Deal$ delivers low prices on everyday essentials, party, seasonal and home
product. At Deal$, not everything’s $1, but everything is a value. Our goal is to sur-
prise and delight our customers with every visit. As we grow and refine Deal$, custom-
ers are responding favorably. By the end of 2011 we were operating 182 Deal$ stores
2011 Annual Report 3