DOLLAR GENERAL CITES PROGRESS WITH STORE RECEIVING SYSTEM

Amy Sung

GOODLETTSVILLE, Tenn. -- Dollar General here expects half of its 7,755 stores in 31 states will be using a time-saving product-receiving system called "EZ Store" by the end of its fiscal year in early February, 2006.

This update was provided by David Tehle, chief financial officer and executive vice president of operations, and Kathleen Guion, executive vice president, store operations and development, in a presentation at Goldman Sachs' 12th annual Global Retailing Conference in New York last month.

EZ Store will ultimately be employed chainwide following a two-year rollout in which the discount retail chain will invest $100 million in the system and related efforts, Guion said, calling the program Dollar General's "most critical initiative in improving the performance of our stores."

EZ Store, developed by Dollar General, largely represents a method for loading merchandise at distribution centers and unloading it at stores via mobile, cage-like "roll-tainers." According to the presentation, instead of the customary 12 hours to unload a truck, drivers are able to do so in 90 minutes using roll-tainers. This is expected to help ease the congestion at stores' receiving docks, where the number of cartons received has grown 81% over the past decade.

"We are convinced that our EZ Store efforts will enhance our ability to manage an ever-increasing number of small stores," Guion said, adding that the system is helping address such issues as product handling, labor scheduling, hiring and training, store paperwork, workers' compensation expenses and product presentation, with the impact already being seen in the company's financial results.

However, Guion said that while the company is pleased with the initial results, it will still be some time before the full benefits are visible.

"The most impactful benefit" provided by the roll-tainers is reduced product handling, which both limits product damage and improves product presentation, Guion said.

In addition, Dollar General expects store managers to be able to manage their time more efficiently.

Voicing a contrary view of EZ store and the use of roll-tainers is the Web site RetailWorker.com, sponsored by the Industrial Workers of the World, a 100-year-old union based in Philadelphia. The site posts a complaint letter directed at the Occupational Safety & Health Administration, charging that roll-tainers are "overloaded," causing damage to cartons that may compromise food items, and that roll-tainers may tip over, subjecting workers to injuries. Dollar General did not respond to requests for comment on the charges.