Cracker Barrel 2009 Annual Report Download - page 8

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to each other. While discounting may be necessary for
some in the restaurant industry, it’s not a part of
Cracker Barrel’s strategy. Instead, we have chosen to stay
focused on delivering the Cracker Barrel experience every
day. A big part of that experience includes serving ample
portions of great tasting, high quality food at a fair
price. We also know, however, that while our guests come
back for their favorite dishes, there also is almost
always room for something new on the menu. We’ve had
great success with new food creations this year,
especially when supported with advertising. You can
expect to see more new items with an emphasis on
“fresh” on the menu. Our guests know they can come
to Cracker Barrel for the great experience—and they
won’t need a coupon to do so.
As much as our guests enjoy visiting our stores, they
often like to take a little Cracker Barrel home with them.
In 2009, we began to offer many Cracker Barrel-branded
products as unique gifts. We also expanded the music
offering in the stores to include not just exclusive CDs but
related products. For instance, with Dolly Parton’s CD,
Backwoods Barbie – Collector’s Edition, we offered a limited-
edition Dolly Parton pink rocking chair and a special
Collector’s Photo Album, which turned out to be one of our
best selling books ever. The CD by Montgomery Gentry,
For Our Heroes, tied in with our association with Wounded
Warrior Project to support the recovery of our returning
wounded soldiers. Cracker Barrel made a contribution to
Wounded Warrior Project for each Montgomery Gentry
CD we sold. The Montgomery Gentry CD, Cracker Barrel’s
second best-selling CD, debuted at # 5 on Billboard
magazine’s Top Country Album chart and remained in the
top 20 for three weeks.
BECOMING MORE PROFITABLE INSIDE THE FOUR WALLS
Faced with rising costs and declining traffic, the
casual dining industry hit the PAUSE button on new store
growth. Cracker Barrel was no exception. We have
continued to add new stores, but at a very modest rate of
unit growth. While we see the opportunity to expand
our store base – the potential to nearly double in size –
we think it’s more prudent right now to focus on making
each one of our current stores more productive, and there-
fore more profitable. In fact, our greatest opportunity
to generate higher profits and cash flow is by closing the
performance gap between our best and weakest stores.
Within the four walls of each store lies the opportunity
to better manage food costs, labor scheduling, retail
merchandising and speed of service.
Growth can mask a lot of problems. In the high-
growth years of the 1990s and first half of the 2000s,
we opened a lot of stores but it became a challenge
to maintain consistent operations. Our “outlier” program
helps identify opportunities for profit improvement by
focusing on execution to standards in areas such as food
waste, maintenance, supplies and utilities.
Regarding food costs, our strategic sourcing group has
made and continues to make significant progress. With
a more disciplined approach to purchasing, we are able
to forecast more accurately our commodity costs and act
accordingly. Our food development team continues to
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