Cracker Barrel 2012 Annual Report Download - page 17

ability to convert restaurant trac into retail sales since we
believe that the substantial majority of our retail customers
are also guests in our restaurants.
Average check per guest is an indicator which management
uses to analyze the dollars spent per guest in our stores on
restaurant purchases. is measure aids management in
identifying trends in guest preferences as well as the eective-
ness of menu price increases and other menu changes.
Store operating margins are dened as total revenue less
cost of goods sold, labor and other related expenses and other
store operating expenses, all as a percentage of total revenue.
Management uses this indicator as a primary measure of
operating protability.
Company Performance in 2012
Management believes that the Cracker Barrel brand remains
one of the strongest and most dierentiated brands in the
restaurant industry. We believe our strategic focus on six key
business priorities and our operational execution of those
priorities during 2012 resulted in revenue growth during the
year, positive comparable store restaurant and retail sales for
the year with both comparable store trac and sales out-
performing the Knapp-Track™ Index for the year and higher
prot as compared to the prior year.
Our six priorities for 2012 and how they impacted 2012 are
as follows:
• Introducenewmarketingmessagingtoreinforcethe
authenticvalueprovidedbyCrackerBarrel.
We launched our “Handcraed by Cracker Barrel”
campaign with national cable TV and spot radio ads. We
focused broadcast media support around our peak sales
periods, the holiday season (our second scal quarter) and
the summer travel season (our fourth scal quarter). We
believe indicators of the new advertising strategy’s success
include (i) three successive quarters of increased year-over-
year trac growth starting in the second quarter and (ii)
out-performance of the Knapp-Track Casual Dining Index
during the second, third and fourth quarters of our scal year.
• Reneourmenuandpricingtoincreasevarietyand
everydayaordability.
In the rst quarter of the scal year, we introduced weekday
$5.99 Daily Lunch Specials which we believe drove an
increase in weekday lunch sales and trac over the course of
the year. In the fourth quarter, we enhanced our salad
oerings, reformulating all the salads on the menu and adding
several new ones that will continue on the regular menu and
provide guests with additional healthier options alongside our
traditional home-style fare.
• Enhancetherestaurantoperatingplatformtosustainably
improvetheguestexperience.
roughout the year, we made improvements to our core
operations to enable our employees to provide a great
Cracker Barrel experience to our guests. ese improvements
included changes in processes and procedures and the
installation of new equipment and technology. e success of
our eorts to enhance the operating platform was validated
by our higher year-over-year overall guest satisfaction scores
during 2012. We also achieved organizational highs for
the following categories: overall value, taste of the food,
temperature of the food, aentiveness of server, speed of
receiving order, friendliness of server, cleanliness of dining
area, friendliness of host/hostess, retail service, and timeliness/
eciency in check out. In addition, we set a company sales
record on anksgiving – which we then were able to improve
upon with a record-breaking Mother’s Day.
• Driveretailsalesusinginnovativetactics,withafocuson
deliveringvalueandcreatingafurtherconnectiontothe
brandforourguests.
Further dening the distinctive Cracker Barrel experience,
we focused on merchandising our stores with unique and
nostalgic items. We saw growth throughout the year in one of
our strongest categories, apparel and accessories. We also
developed and grew proprietary product lines, including our
branded Bueries doll line, a unique and fun collection
featuring $19.99 dolls with their own personalities, stories,
and accessories. In May 2012, we hired a new Senior Vice
President of Retail.
• Employfocusedcostreduction.
We have eliminated many annual expenses, including a
restructuring of home oce employees in July 2011 to
decrease general and administrative expenses and a restruc-
turing of our eld organization in April 2012 to beer align
our restaurant and retail operations under central leadership.
We also completed the rst phase of a labor management
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