What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-10-25 compared with 2020-10-26 · 164 added, 126 removed, 147 unchanged (66% of the section changed)

5 unchanged sentences

We also have commercial programs in all stores in Mexico and Brazil.

We also sell the ALLDATA brand automotive diagnostic and repair software through www.alldata.com and www.alldatadiy.com.

We also sell the ALLDATA brand automotive diagnostic, repair and shop management software through www.alldata.com.

Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com.

1 unchanged sentence

We do not derive revenue from automotive repair or installation services.

Human Capital Resources

We believe the foundation of our success is our culture, which defines how our employees (“AutoZoners”) take care of customers.

Each AutoZoner works hard to Live the Pledge, share their passion for WOW!

Customer Service and Go the Extra Mile every day to continue building and growing AutoZone for our customers.

As of August 28, 2021, we employed approximately 100,000 AutoZoners, approximately 62 percent of whom were employed full-time and the remaining 38 percent were employed part-time.

About 90 percent of our AutoZoners were employed in stores or in direct field supervision, approximately 6 percent in distribution centers and approximately 4 percent in store support and other functions.

Included in the above numbers are approximately 12,000 persons employed in our international operations.

We have never experienced any material labor disruption, do not have any collective bargaining agreements and believe that relations with our AutoZoners are good.

Training & Development

We have a number of different types of jobs and career opportunities.

While many of our AutoZoners follow more traditional career paths (e.g., part-time to full-time sales, store manager, district manager, regional manager, vice president), we encourage cross-functional development and support of AutoZoners as they expand their career into other departments and fields of interest.

Many members of our senior leadership team have held positions in two or more areas of the business.

The AutoZone Pledge and Values drive our success and foster a strong, unique culture of teamwork and customer service.

We encourage the recognition of AutoZoners for a variety of accomplishments, such as going above and beyond to deliver Trustworthy Advice and WOW!

Customer Service, taking initiative to prevent incidents and injuries, making contributions to help detect or report internal or external theft or providing significant service to help others.

Whether they work in our stores, distribution centers, support centers or travel to support our customers and business, we believe AutoZoners everywhere should be recognized for their efforts and outstanding performance.

We also recognize AutoZoners for their years of service to the organization and our customers.

Diversity, Equity and Inclusion (“DEI”)

“Embraces Diversity” is one of our Values, and we have made great strides to lay a proper foundation for our DEI initiatives.

With the oversight and support of a cross-functional Diversity Council and DEI Steering Committee, our DEI efforts influence and inform many parts of our human capital management function including talent acquisition, retention, professional development and workforce management.

Our first business resource group (“BRG”) was established in 2014 (AutoZone Women’s Initiative).

Since then, four other BRGs now support AutoZoners who share common interests or backgrounds and have a mission to contribute their voices, time and talent to helping AutoZoners succeed and grow in their careers.

Health and Safety

We are committed to providing a safe working and shopping environment for our AutoZoners and customers.

Aligned with our values, we strive to continually monitor our working and shopping environment to keep our AutoZoners and customers as safe as possible.

In response to the COVID-19 pandemic, we continue to invest in supplies for the protection of our AutoZoners and our customers and increased the frequency of cleaning and disinfecting our stores.

We also provided Emergency Time-Off benefit enhancements for both full-time and part-time AutoZoners and a one-time financial incentive for receiving the COVID-19 vaccine.

As the effects of COVID-19 continue to evolve, we are closely monitoring the changing situation and complying with public health guidance.

Additional information about our human capital resources can be found in our most recent Corporate Social Responsibility (“CSR”) Report, which is available on our website.

Our CSR Report is not, and will not be deemed to be, a part of this Annual Report on Form 10-K or incorporated by reference into any of our other filings with the Securities and Exchange Commission (“the SEC”).

Store Operations

At August 28, 2021, our stores were in the following locations:

6 unchanged sentences

Total Domestic stores

Store Formats

Substantially all stores are based on standard store formats, resulting in generally consistent appearance, merchandising and product mix.

Approximately 90% to 99% of each store’s square footage is selling space.

In our satellite stores, approximately 40% to 50% of our space is dedicated to hard parts inventory, while our hub stores and mega hubs have 70% to 85% of their space utilized for hard parts.

The hard parts inventory area is generally fronted by counters or pods that run the depth or length of the store, dividing the hard parts area from the remainder of the store.

The remaining selling space contains displays of maintenance, accessories and non-automotive items.

We believe our stores are “destination stores,” generating their own traffic rather than relying on traffic created by adjacent stores.

Therefore, we situate most stores on major thoroughfares with easy access and good parking.

Store Personnel and Training

We provide on-the-job training as well as formal training programs, including an annual national sales meeting with related cascading meetings at our distribution centers, regional offices and stores;

store meetings on specific sales and product topics;

standardized computer-based training to support culture, safety, salesmanship, compliance and product and job knowledge;

and several specialist, vendor and third-party programs to support learning and development in areas requiring technical expertise and specific job knowledge.

All domestic AutoZoners are encouraged to complete our in-house product knowledge program and Parts Expert certification, which is developed in partnership with our key suppliers.

Training is supplemented with frequent store visits by management.

Advanced leadership training is an additional area of investment that is used to deepen bench strength and support succession planning.

Store managers, commercial sales managers and managers at various levels across the organization receive financial incentives through performance-based bonuses.

In addition, our growth has provided opportunities for the promotion of qualified AutoZoners.

We believe these opportunities are important to attract, motivate and retain high quality AutoZoners.

All store support functions are centralized in our store support centers located in Memphis, Tennessee;

Monterrey, Mexico;

Chihuahua, Mexico and Sao Paulo, Brazil.

We believe that this centralization enhances consistent execution of our merchandising and marketing strategies at the store level, while reducing expenses and cost of sales.

Store Automation

All of our stores have Z-net, our proprietary electronic catalog that enables our AutoZoners to efficiently look up the parts that our customers need and to provide complete job solutions, advice and information for customer vehicles.

Z-net provides parts information based on the year, make, model and engine type of a vehicle and also tracks inventory availability at the store, at other nearby stores and through special order.

The Z-net display screens are placed on the hard parts counter or pods, where both the AutoZoner and customer can view the screen.

Our stores utilize our computerized proprietary Point-of-Sale System, which includes bar code scanning and point-of-sale data collection terminals.

Our proprietary Store Management System provides administrative assistance, as well as enhanced merchandising information and improved inventory control.

We believe the Point-of-Sale System also enhances customer service through faster processing of transactions, while the Store Management System provides simplified warranty and product return procedures.

Our commercial sales program operates in a highly fragmented market, and we are a leading distributor of automotive parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts in the Americas.

As a part of the domestic store program, we offer credit and delivery to our customers, as well as online ordering through www.autozonepro.com or through the AutoZone Pro smartphone application.

Through our hub stores, we offer a greater range of parts and products desired by professional technicians.

We have dedicated sales teams focused on independent repair shops as well as national, regional and public sector commercial accounts.

Store Development

The following table reflects our location development during the past five fiscal years:

(1) 26 Interamerican Motor Corporation (“IMC”) branches sold on April 4, 2018.

We believe expansion opportunities exist in markets we do not currently serve, as well as in markets where we can achieve a larger presence.

We undertake substantial research prior to entering new markets.

The most important criteria for opening a new store are the projected future profitability and the ability to achieve our required investment hurdle rate.

Key factors in selecting new site and market locations for stores include population, demographics, vehicle profile, customer buying trends, commercial businesses, number and strength of competitors’ stores and the cost of real estate.

In reviewing the vehicle profile, we also consider the number of vehicles that are seven years old and older, or “our kind of vehicles”;

these vehicles are generally no longer under the original manufacturers’ warranties and require more maintenance and repair than newer vehicles.

We seek to open new stores in high visibility sites in high traffic locations within or contiguous to existing market areas and attempt to cluster development in markets in a relatively short period of time.

In addition to continuing to lease or develop our own locations, we evaluate and may make strategic acquisitions.

Marketing and Merchandising Strategy

3 unchanged sentences

Customer service is the most important element in our marketing and merchandising strategy, which is based upon consumer marketing research.

We emphasize that our AutoZoners (employees) should always put customers first by providing prompt, courteous service and trustworthy advice.

Our electronic parts catalog assists in the selection of parts as well as identifying any associated warranties that are offered by us or our vendors.

We emphasize that our AutoZoners should always put customers first by providing prompt, courteous service and trustworthy advice.

Our electronic parts catalog assists in the selection of parts as well as identifying any associated warranties offered by us or our vendors.

We sell automotive hard parts, maintenance items, accessories and non-automotive parts through www.autozone.com, for pick-up in store or to be shipped directly to a customer’s home or business, with next day delivery covering approximately 82% of the U.S.

Additionally, we offer a smartphone application that provides customers with store locations, driving directions, operating hours, product availability and the ability to purchase products.

Additionally, we offer a smartphone application that provides customers with store locations, driving directions, operating hours, product availability, the ability to purchase products and other information.

We also provide specialty tools through our suite of free services.

30 unchanged sentences

Stereos & Radios

We believe that customer satisfaction is often impacted by our ability to promptly provide specific automotive products as requested.

We believe customer satisfaction is often impacted by our ability to promptly provide specific automotive products as requested.

Each store carries the same basic products, but we tailor our hard parts inventory to the makes and models of the vehicles in each store’s trade area, and our sales floor products are tailored to the local store’s demographics.

Our hub stores (including mega hubs, which carry an even broader assortment) carry a larger assortment of products that are delivered to local satellite stores.

We are constantly updating the products we offer to ensure that our inventory matches the products our customers need or desire.

We are constantly updating the products we offer to ensure our inventory matches the products our customers need or desire.

We want to be the value leader in our industry, by consistently providing quality merchandise at the right price, backed by a satisfactory warranty and outstanding customer service.

5 unchanged sentences

We believe that targeted advertising and promotions play important roles in succeeding in today’s environment.

We are constantly working to understand our customers’ wants and needs so that we can build long-lasting, loyal relationships.

We are constantly working to understand our customers’ wants and needs so we can build long-lasting, loyal relationships.

We utilize advertising, direct marketing, loyalty programs and promotions primarily to highlight our great value, the availability of high quality parts and develop a relationship with an expanding base of customers.

5 unchanged sentences

In-store signage and special displays promote products on floor displays, end caps and shelves.

We utilize in-store signage, in-store circulars, and creative product placement and promotions to help educate customers about products that they need.

As a part of the domestic store program, we offer credit and delivery to our customers, as well as online ordering through www.autozonepro.com.

Through our hub stores, we offer a greater range of parts and products desired by professional technicians.

We have dedicated sales teams focused on independent repair shops as well as national, regional and public sector commercial accounts.

Store Operations

Store Formats

Substantially all stores are based on standard store formats, resulting in generally consistent appearance, merchandising and product mix.

Approximately 90% to 99% of each store’s square footage is selling space.

In our satellite stores, approximately 40% to 50% of our space is dedicated to hard parts inventory, while our hub stores and mega hubs have 70% to 85% of their space utilized for hard parts.

The hard parts inventory area is generally fronted by counters or pods that run the depth or length of the store, dividing the hard parts area from the remainder of the store.

The remaining selling space contains displays of maintenance, accessories and non-automotive items.

We believe that our stores are “destination stores,” generating their own traffic rather than relying on traffic created by adjacent stores.