Cracker Barrel 2008 Annual Report Download - page 10

There is a lot moreinvolved in retail than merely selling
products. We nowmeasuretheproductivity of each product
category by evaluatingproductselection andcustomer
feedback, as well as sourcingandsupply chain costs. One
example is women’s apparel wherewe now have a much
better understandingof customer preferences,howto best
source that product across various locations, and when
to reorder. We have adoptedasimilar process to improve our
pricing.Otheractions that are enablingus to drive
improvements in the sales and profitability of the retail
business include enhanced point-of-sale capabilities,
additional training of our retail staff, and moredetailed
marketresearch.
WE’RE EXTENDING THE WELCOME MAT
We always want moreguests coming through thefront
door. To drive trafficinto our restaurants andretail stores,
we need to build awareness outside our four walls.
Our loyal customers dine with us at least once a month, but
our overall brand awareness has fallen over the past four
years as we reduced our radioadvertising. Billboards
continue to be our primary form of advertising, as they
quickly show the brand promise and provide directions to
thenext location. To stimulate awareness of CrackerBarrel
as a local place to eat as well as a much-loved relaxing
place for travelers, we tested TV advertising in selected
markets in fiscal 2008. We also tested combinations of
radio and TV advertisingover the Christmas holidays.
Although we did see meaningful increases in trafficand
retail sales, enough to more than breakeven in the test
markets, we did not fully reach the levels that would
allow us to use TV advertisingextensively across our
system, so we’re developinga mediaplan to run a
combination of TV andradio advertisingin fiscal 2009
based on these results.
We introduced our first national promotion in May 2008,
“TheGreatest Family Road Trip™”. We gave away over 30
million game pieces to our guests for thechance to win
free meals,GPS navigational systems or the grandprize,
a Monaco recreational vehicle or $250,000 in cash.
Although it was difficult to determine the full benefit of
thepromotion, it was creative, it was new,andit was
fun for our employees and guests. And, in fact, we did
continue our better-than-industry trafficperformance in
the months of June and July when some observers
expected weaker performance as a result of lower summer
road travel. We also built on the success of another
program that helps bring morepeople through our doors –
theCracker Barrel gift card. In 2008, we doubled
thenumber of major retailers that carry our gift cards
andwe saw gift card sales increase 16 percent over
theprevious year.
Country music goes hand in hand with down home
country cooking, andwe will continue to reinforce this
importanttie to the Cracker Barrel brandthough the release
of CDs exclusively through our stores.This year’s offerings
includedmusicby Alabama, Lonestar, Aaron Tippin and
seasonal restaurant and retail items to a national
summer promotion. Each theme includes related impulse
items such as nostalgic candies or toys. The goal is to
create a fun shopping experience. Our customers call it
the “Joy of the Hunt”: discovering what’s new in the retail
store throughout the year. We have also introduced iconic
packaging that reinforces Cracker Barrel’s old country
store roots.