Cracker Barrel 2004 Annual Report Download - page 9

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the “American Music Legends” series of compact discs,
featuring well known artists, to complement our
“Heritage Music” collection, a proprietary series of
compact discs of various genres of American folk and
traditional music by artists specializing in these
varied and uniquely American styles. We also intro-
duced, late in the year, a ready-to-assemble (RTA)
version of our popular rocking chairs. Long a Cracker
Barrel icon, the rockers on the front porch not only
have been a popular way for guests to relax while
waiting for a table, but they are a favorite product
in our retail shop, with over $15 million in sales in
fiscal 2004. The RTA version, designed for shipping
convenience for our website sales, has recently been
introduced in the retail shops to make it more
convenient to ship home or squeeze into the car,
especially for the important traveling guest. Our goal
is to increase the frequency of having our restaurant
guests make a retail purchase and grow revenues.
For fiscal 2005, we expect retail will continue to
build on the successes we saw last year in the areas
of merchandising strategy, improved sell-through and
freshening of both seasonal and non-seasonal products
to realize the benefits from the rollout of Service
Sells. Retail is a very critical factor in our success; it
provides a major competitive advantage and a point
of differentiation. And to reflect the importance of
retail to us, we have added the position of general
merchandising manager to lead the merchandising
and planning teams. We are pleased to have added
an experienced retail executive who will be a member
of the executive team at Cracker Barrel, which will
give retail an important voice in the overall leadership
of the business.
We have two operational initiatives that we will
be testing in fiscal 2005 in Cracker Barrel. Both
are intended to enhance the guest experience while
improving sales and lowering costs. Both have the
potential to have a major positive impact on the
business. The first, which we began testing last year,
is the retail floor plan initiative designed to
improve traffic flow from the front door to the dining
room and from the dining room to the cash register,
and at the same time, improve the ease of shopping
and the presentation of the merchandise. We are
moving to a second round of testing right now, and
we expect to have a rollout plan in place by the
end of the fiscal year. The second initiative is the
application of industry best practices to the kitchen
and, potentially, to the front of the house. These are
designed to decrease wait and service times in
the dining room and at the same time, improve food
quality, and, as a byproduct, lower our labor costs.
We have been through the analysis and mock-up
phase and we’ll be field-testing this in fiscal 2005.
The goal is to develop a new kitchen design and
service processes for use in new stores and for cost-
effective retro-fitting of our existing store base.
The development strategy at Cracker Barrel con-
tinues to focus on building out our Interstate Highway
presence in core markets while building selectively on
Interstates in developmental markets. Off-Interstate
development will continue to be pursued on a very
selective basis in the near term. We have identified
the potential for Cracker Barrel to reach over 1,000
total stores, approximately double the current number.
This potential is based on a new annual process
that we have initiated, a detailed market-by-market
evaluation which does not yet include the West
Coast states of California, Oregon and Washington.
Logan’s saw some significant accomplishments
in fiscal 2004 also. At this time last year, Tom Vogel,
Logan’s new president, had just joined us. Tom’s
CBRL Group, Inc. Cracker Barrel Restaurant
Comparable*Store Sales
% Change vs. Prior Year
7%
6%
5%
4%
3%
2%
1%
0%
+0.6% +4.6% +5.3% +0.5% +2.0%
2000 2001 2002 2003 2004
Fiscal Year
*Comparable stores are those open for eighteen months or more, at
the beginning of the year, and represent a changing group of stores
each year.