Cracker Barrel 2009 Annual Report Download - page 9

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look for labor-saving opportunities, including ingredients
that can be supplied by our vendors. We reconfigured our
Home Office test kitchen to better match the operating
environment at the store level. The goal is to ensure that
each new item can move smoothly, and profitably, from
test kitchen to table before rolling it out nationwide.
In retail, the goal is pretty simple – to improve the
profit per square foot with sales of the right products at
the right prices. There are many point-of-sale oppor-
tunities inside our stores. For example, we introduced
new mints and gum that are packaged in branded tin
containers. We also redesigned the packaging for our food
products to create a fresh new look, and one more
consistent with a country store atmosphere. We’re always
looking for ways to make the ‘hunt’ more fun for our
young guests. This includes putting more bins under the
tables filled with candy and small toys.
One area in which we must improve, however, is manage-
ment of our seasonal merchandise. When the financial
crisis hit last October, we had large quantities of Christmas
products on hand and were forced to take markdowns to
generate sales. We responded by cutting back purchases
and stretching out deliveries to end the year with retail
inventories of $108 million, $16 million lower than the
previous year’s level. Going forward, while recognizing
that seasonal products are important to our brand, we
plan to lower our dependence on seasonal merchandise
and the resulting end-of-season markdowns. An important
way that we will do that is to add a timeless assortment
of “Great Gifts” that mostly sell for under $20. We plan
to build on our success with regional items, such as
college keepsakes and apparel. We’ve also found ways to
reduce the cost and capital tied up in the logistics of
inventory management. For example, we now receive our
retail goods into Savannah, Georgia, rather than at a
port on the West Coast. This has resulted in $2 million in
annual savings in trucking charges alone, while also
improving both reliability and delivery times. More
savings were achieved by removing the storage trailers
and instead placing the inventory in the store, helping
our associates to keep the shelves well stocked. This one
move is saving us approximately $1 million.
We stake our reputation on “Pleasing PeopleTM
.” It’s the
mission statement of our more than 65,000 employees,
and it starts with the hiring process. The store manager
is always looking for just the right person. Through
training and coaching, our “Rising Stars” can move through
the ranks to become a Par IV with increased pay,
vacation and lower cost for benefits. As a result, our
turnover is one of the lowest in the industry. Our hourly
turnover was below 80 percent in 2009 and manage-
ment turnover below 20 percent, even before national
unemployment exceeded 9 percent. We know that a
well-trained, experienced workforce equals better service –
and our improved guest satisfaction scores prove it.
Labor scheduling, however, remains a critical challenge
for the store manager. We currently are testing a new
system that is better able to match labor hours to traffic
levels as opposed to the old method of running 8-hour
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