Family Dollar 2012 Annual Report Download - page 11

During fiscal 2012, we made significant investments in the business and built the foundation to continue to
accelerate growth into the future. We expect these investments, combined with our strategy of providing
customers with great value and convenience, will continue to deliver strong financial performance in fiscal 2013
and beyond.
Develop diverse, high-performing teams
We believe customer satisfaction is strongly linked with employee engagement, which is why we continue
to invest in developing diverse, high-performing teams. Over the past three years, we focused on stabilizing our
workforce and increasing our rate of internal promotions. As a result, we increased our team member
engagement. In fiscal 2012, we also strengthened our leadership development programs and enhanced our
succession planning processes throughout the organization. We began implementing new reward and recognition
programs to motivate and encourage team members. We increased team member training significantly by
expanding our online training programs and enhancing our leadership development programs. In addition to
online training, we have added development support and mentorship programs for team members seeking to
progress their careers. These initiatives, combined with process improvements, benefited our workforce
productivity and allowed us to manage our core cost structure to support our investment agenda. In fiscal 2013,
we will continue to expand our leadership development programs and further enhance our succession planning
processes.
Overview of our Business Operations
Our Customers
Our strategy of providing customers with value and convenience continues to attract customers in a wide
range of income brackets, ethnicity groups, and life stages. Typically, our customer is a female
head-of-household. According to Nielsen’s Homescan®panel data as of August 25, 2012, approximately 56% of
our customers had an annual gross income of less than $40,000 and approximately 25% had an annual gross
income of less than $20,000. Approximately 35% of our customers were African American or Hispanic, and
approximately 72% of customers were age 45 or older.
Our Stores
A Family Dollar store is typically between 7,500 and 9,500 square feet, with an average of approximately
7,150 square feet of selling space. Our stores generally serve customers who live within three to five miles of the
store. At the end of fiscal 2012, we operated 7,442 stores. Approximately 23% of our stores were located in large
urban markets and approximately 20% of our stores were located in small urban markets or suburban areas.
Approximately 60% of our stores were in strip malls, 38% were in freestanding buildings, and 2% were in
downtown buildings. To manage our extensive portfolio of store leases, we utilize an electronic lease
management system that contains the key terms and conditions abstracted from our active store lease contracts.
This system provides better visibility to key property management issues such as property taxes, common area
maintenance fees and renewal options.
The relatively small size of a Family Dollar store allows us to select store locations that provide
neighborhood convenience to our customers in each of these market areas. Family Dollar stores are generally
open seven days a week and operate between the hours of 8:00 a.m. and 9:00 p.m. Our stores accept cash, checks,
debit cards, credit cards, and other electronic payment types, including food stamps.
Our Merchandise
We provide customers with quality merchandise at everyday low prices. We offer a focused assortment of
merchandise in a number of core categories, such as health and beauty aids, packaged food and refrigerated
products, home cleaning supplies, housewares, stationery, seasonal goods, apparel, and home fashions. The
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