True Value 2012 Annual Report Download - page 26

 TRUE VALUE  ANNUAL REPORT
remodels and conversions, and
our free opening stock order
program was a great success. These
programs contributed to ,
square feet of new DTV space during
the year. We also invested .
million to stock our warehouses
with farm and ranch, automotive
and pet products to support our
retailers’ ability to expand.
The combination of achieving our
net margin plan and a one-time gain
has produced one of the highest
earnings years in our history.
As a result, we not only delivered
a patronage dividend comparable
to last year, but also an additional
one-time dividend of  percent —
including  percent in cash — that
is one of the largest in our history.
We also doubled the amount of advertising
co-op funds available to our retailers, from .
percent to  percent of the retailer’s handled
purchases. We cut the cost of our True Value
Rewards loyalty program in half, and in March
 we paid . million in notes nine months
ahead of schedule to provide our members with
additional funds for the critical spring buy.
GROWTH IN A CHANGING WORLD As proud as
we are of our accomplishments, we know we
have to stay focused on the future. If there’s
one word that represents the key to our long-
term success together, it’s “change.” We’re
commied to helping our retailers embrace it
in order to continue to compete and grow.
Why? Because the marketplace is changing.
Rapidly. An increasing number of non-hardware
stores are expanding their assortments to
include products True Value sells. Consumers
are geing younger, and they are less familiar
with the traditional hardware store than older
generations. Female shoppers are becoming
more and more a force in the home improvement
segment, and they have different expectations
from what most of us are used to
seeing in the hardware business.
If our retailers focus only on serving
their existing households, the
opportunity for growth is the rate of
inflation. In fact, just maintaining the
status quo will likely cause us to lose
ground in today’s highly competitive
environment. That’s why we are always
investing to expand our assortments,
most recently with farm and ranch,
automotive and pet products, to help
True Value retailers grow share of
wallet with existing customers and
aract new ones.
And DTV works. We have the numbers
to prove it. By appealing to new
customers, especially women and
younger shoppers, our DTV stores are
growing faster — between  and  percent
the first year — than those who have not yet
adopted the format.
But one of the unique advantages True Value
offers over other co-ops is we do not tell you
how to run your business. We do not dictate
assortments or restrict your ability to make
the decisions that are best for you and your
customers. With DTV and our other programs,
the choice is entirely yours.
We want to be your trusted partner. We offer the
industry’s widest array of proven, well-designed
tools for success, and our associates are here to
help you use them to your best advantage.
“WE’VE PROVEN THAT WHEN
WE SET GOALS, WE CAN
ACHIEVE THEM. WE’RE
GOING TO CONTINUE TO
BUILD ON OUR MOMENTUM
IN  AND BEYOND.”
LYLEHEIDEMANN