Dollar Tree 2015 Annual Report Download - page 24

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8
The following table shows the percentage of net sales of each major product group for the period from July 6, 2015
through January 30, 2016:
January 30,
Merchandise Type 2016
Consumable 68.4%
Home products 9.8%
Apparel and accessories 6.8%
Seasonal and electronics 15.0%
Business Strategy
Continue to execute our proven and retail business strategy. We will continue to execute our proven
strategies that have generated a history of success and consistent growth for the Company. Key elements of our strategy
include:
• continuously aiming to “Wow” the customer with a compelling, fun and fresh merchandise assortment comprising a
variety of the things you want and things you need, all at incredible values in bright, clean and friendly stores;
• maintaining a flexible sourcing merchandise model that allows a variety of products to be sold as long as desired
merchandise margin hurdles are met;
• growing both the Dollar Tree and Family Dollar banners;
• pursuing a “more, better, faster” approach to the rollout of new Dollar Tree and Family Dollar stores to broaden our
geographic footprint;
• maintaining customer relevance by ensuring that we reinvent ourselves constantly through new merchandise
categories;
• leveraging the complementary merchandise expertise of each banner including Dollar Tree's sourcing and product
development expertise and Family Dollar's consumer package goods and national brands sourcing expertise; and
• maintaining a prudent approach with our use of capital for the benefit of our shareholders.
Operate a diversified and complementary business model across both and point strategies. We
plan to operate and grow both the Dollar Tree and Family Dollar banners. We will utilize the reach and scale of our combined
company to serve a broader range of customers in more ways, offering better prices and more value for the customer. Dollar
Tree stores will continue to operate as single price point retail stores. At Dollar Tree, everything is $1.00, offering the customer
a balanced mix of things they need and things they want. Our shopping experience will remain fun and friendly as we exceed
our customers’ expectations for what they can buy for $1.00. Dollar Tree targets middle income customers in suburban
locations. Family Dollar stores will continue to operate using multiple price points, serving customers as their “neighborhood
discount store,” offering great values on everyday items and a convenient shopping experience. Family Dollar targets a lower
income customer in urban and rural locations. We will benefit from an expanded target customer profile and utilize the store
concepts of both Dollar Tree and Family Dollar to serve a broader range of customer demographics to drive further
improvements in sales and profitability.
Deliver significant synergy opportunities through integration of Family Dollar. Our recent acquisition of Family Dollar
will provide us with significant opportunities to achieve meaningful cost synergies. We are executing a detailed integration
plan and expect to generate approximately $300 million of estimated annual cost synergies by the end of the third full
year following the consummation of the acquisition across the areas of:
• sourcing and procurement, through driving scale with common vendors, increasing direct factory sourcing and
reducing usage of domestic importers;
• format optimization, through the of select Dollar Tree and Family Dollar stores to match the banner to
the customer and tailoring merchandise offerings within existing stores to match local customer tastes;
• distribution and logistics, by reducing inbound and outbound freight costs (domestic and international) and optimizing
efficiency within our combined distribution center network; and