What if we could design every part of our store to meet the unique needs of
different customers? Actually, that's exactly what we're doing. During 2002,
we divided our stores into approximately 250 categories, each of which will be
managed as its own profit center. Based on intense customer research, we're
working with our suppliers to create individual business strategies for each
category to increase sales and maximize profitability. In our initial rollout,
Category Management contributed to increased sales, percentage of in-store sales
and market share gains in every category implemented in 2002. By the fourth
quarter of 2003, more than two-thirds of the categories in our stores will have
category management plans implemented to drive performance.