Cracker Barrel 2008 Annual Report Download - page 40

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Total Revenue
The following table highlights the components of total
revenue by percentage relationships to total revenue for
the past three years:
2008 2007 2006
Total Revenue:
Cracker Barrel restaurant 78.5% 78.4% 78.8%
Cracker Barrel retail 21.5 21.6 21.2
Total revenue 100.0% 100.0% 100.0%
The following table highlights comparable store sales*
results over the past two years:
Cracker Barrel
Period to Period
Increase (Decrease)
2008 vs 2007 2007 vs 2006
(531 Stores) (507 Stores)
Restaurant 0.5% 0.7%
Retail (0.3) 3.2
Restaurant & Retail 0.4 1.2
* Comparable store sales consist of sales of units open at least six full
quarters at the beginning of the year and are measured on comparable
calendar weeks.
The increase in comparable store restaurant sales from
2007 to 2008 was due to an increase in average check
of 3.4%, including a 3.6% average menu price increase,
offset by a decrease in guest traffic of 2.9%. The increase
in comparable store restaurant sales from 2006 to 2007
was due to an increase in average check of 1.4%,
including a 1.4% average menu price increase, offset by a
decrease in guest traffic of 0.7%.
The comparable store retail sales decrease from 2007
to 2008 resulted from a decrease in restaurant guest
traffic, which we believe resulted from uncertain
consumer sentiment and reduced discretionary spending.
We believe that the comparable store retail sales increase
from 2006 to 2007 resulted from a more appealing
retail merchandise selection, particularly for seasonal
merchandise, in 2007 versus 2006. This increase was
partially offset by smaller clearance sales and restaurant
guest traffic decreases, which again we believe resulted
from uncertain consumer sentiment and reduced
discretionary spending.
The following table highlights comparable sales averages
per store* over the past three years:
2008 2007 2006
(531 Stores) (507 Stores) (482 Stores)
Cracker Barrel restaurant $3,293 $3,350 $3,279
Cracker Barrel retail 893 914 878
Total $4,186 $4,264 $4,157
* 2007 is calculated on a 53-week basis while the other periods are
calculated on a 52-week basis.
Total revenue, which increased 1.4% and 6.0% in 2008
and 2007, respectively, benefited from the opening of 17,
19 and 21 Cracker Barrel stores in 2008, 2007 and 2006,
respectively, partially offset by the closing of two
Cracker Barrel stores in 2008 and seven Cracker Barrel
stores in 2006. Total revenue in 2007 also benefited
from an additional week, which resulted in an increase in
revenues from continuing operations of $46,283.
Excluding the additional week in 2007, total revenue from
continuing operations increased 3.4% in 2008 as
compared to 2007.
The following table highlights average weekly sales*
over the past three years:
2008 2007 2006
Restaurant $63.1 $63.0 $62.5
Retail 17.3 17.3 16.8
* Average weekly sales are calculated by dividing net sales by operating
weeks and include all stores.
Cost of Goods Sold
Cost of goods sold as a percentage of total revenue
increased to 32.4% in 2008 from 31.7% in 2007. This
increase was due to higher restaurant product costs,
primarily reflecting commodity inflation, higher retail
freight costs, which were primarily related to fuel cost
increases, higher markdowns of retail merchandise and
higher inventory shrinkage versus the prior year partially
offset by higher menu pricing and higher initial mark-ons
of retail merchandise. The increase in commodity
inflation from a year ago was primarily due to increases
in dairy, eggs, oil, grain products and produce.
Cost of goods sold as a percentage of total revenue
decreased to 31.7% in 2007 from 31.8% in 2006.
This decrease was due to higher menu pricing, lower
markdowns of retail merchandise, higher initial mark-ons