Cracker Barrel 2009 Annual Report Download - page 40

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Cracker Barrel
Period to Period
(Decrease) Increase
2009 vs 2008 2008 vs 2007
(550 Stores) (531 Stores)
Cracker Barrel Restaurant (1.7)% 0.5%
Cracker Barrel Retail (5.9) (0.3)
Cracker Barrel Restaurant & Retail (2.6) 0.4
* 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 decrease in comparable store restaurant sales from
2008 to 2009 was due to a decrease in guest traffic of
4.6% partially offset by an increase in average check of
2.9%, including a 3.3% average menu price increase. 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, partially
offset by a decrease in guest traffic of 2.9%.
The comparable store retail sales decreases from
2008 to 2009 and from 2007 to 2008 resulted from a
decrease in restaurant guest traffic, which 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:
2009 2008 2007
(550 Stores) (531 Stores) (507 Stores)
Cracker Barrel restaurant $3,228 $3,293 $3,350
Cracker Barrel retail 838 893 914
Total $4,066 $4,186 $4,264
* 2007 is calculated on a 53-week basis while the other periods are
calculated on a 52-week basis.
Total revenue, which decreased 0.7% in 2009 and
increased 1.4% and 6.0% in 2008 and 2007, respectively,
benefited from the opening of 11, 17 and 19 Cracker
Barrel stores in 2009, 2008 and 2007, respectively,
partially offset by the closing of two Cracker Barrel stores
in 2008. 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:
2009 2008 2007
Cracker Barrel Restaurant $61.7 $ 63.1 $ 63.0
Cracker Barrel Retail 16.2 17.3 17.3
* Average weekly sales are calculated by dividing net sales by operating
weeks and include all stores.
Gross Profit
Gross profit as a percentage of total revenue was 67.7%,
67.6% and 68.3% in 2009, 2008 and 2007, respectively.
A more favorable commodity climate in 2009 allowed us
to keep our gross profit relatively flat. The decrease from
2007 to 2008 was primarily due to higher restaurant
product costs, primarily reflecting commodity inflation in
dairy, eggs, oil, grain products and produce.
Labor and Related Expenses
Labor and other related expenses include all direct
and indirect labor and related costs incurred in store
operations. Labor and other related expenses as a
percentage of total revenue were 38.7%, 38.2% and
38.0% in 2009, 2008, and 2007, respectively. The year-
to-year increases from 2008 to 2009 and from 2007 to
2008 resulted primarily from higher healthcare costs.
The increase in healthcare costs from 2008 to 2009 was
due to higher enrollment and higher utilization with
the calendar 2009 plan and termination costs associated
with the calendar 2008 plan. The increase in healthcare
costs from 2007 to 2008 was due to higher medical and
pharmacy claims and lower employee contributions.
Impairment and Store Closing Costs
During 2009, we recorded $2,088 in impairment charges.
During 2009, one owned Cracker Barrel store was
determined to be impaired, resulting in charges of $933.
This store was impaired due to lower cash flow projections.
Additionally, during 2009, we recorded a total impairment
of $1,155 on office space, property adjacent to the office
space and our management trainee housing facility. The
decision to impair these properties was due to changes in
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