Cracker Barrel 2012 Annual Report Download - page 19

Our comparable store restaurant sales increased from 2011
to 2012 resulting from a higher average check of 2.4%,
including a 2.2% average menu price increase, partially oset
by a decrease in guest trac of 0.2%. Our comparable store
restaurant sales increased from 2010 to 2011 resulting from a
higher average check of 2.2%, including a 2.0% average menu
price increase, partially oset by a decrease in guest trac of
2.0%. We believe that the decreases in restaurant guest trac
in the rst quarter of 2012 and 2011 resulted from continued
uncertain consumer sentiment, high unemployment and
reduced discretionary spending. Starting in the second
quarter of 2012, our guest trac was positive in the three
successive quarters.
We believe that the comparable store retail sales increase
from 2011 to 2012 resulted from a more appealing retail
merchandise selection than in the prior year and the growth
of apparel, accessories and proprietary product lines. We
believe that the comparable store retail sales increase from
2010 to 2011 resulted from a more appealing retail
merchandise selection and a higher average retail selling
price than in the prior year partially oset by a decrease
in restaurant guest trac.
Cost of Goods Sold
e following table highlights the components of cost of
goods sold in dollar amounts for the past three years:
2012* 2011 2010
Cost of Goods Sold:
Restaurant $ 553,478 $ 511,728 $ 489,781
Retail 274,006 260,743 256,037
Total Cost of Goods Sold $ 827,484 $ 772,471 $ 745,818
* 2012 consists of 53 weeks while all other periods presented consist of
52 weeks.
e following table highlights restaurant cost of goods sold
as a percentage of restaurant revenue for the past three years:
2012 2011 2010
Restaurant Cost of Goods Sold 26.9% 26.5% 25.6%
e increase from 2011 to 2012 is primarily the result of food
commodity ination of 4.5% partially oset by our menu price
increase referenced above. e increase from 2010 to 2011 is
primarily the result of food commodity ination of 2.9%
partially oset by our menu price increase referenced above.
Changes in product mix and higher food waste also contributed
to the year-over-year increase in restaurant cost of goods sold
as a percentage of restaurant revenue from 2010 to 2011.
We presently expect the rate of commodity ination to be
approximately 5.0% to 6.0% in 2013 as compared to 2012.
We expect to oset the eects of food commodity ination
through a combination of menu price increases, supply
contracts and other cost reduction initiatives.
e following table highlights retail cost of goods sold as a
percentage of retail revenue for the past three years:
2012 2011 2010
Retail Cost of Goods Sold 52.1% 52.1% 52.0%
Retail cost of goods sold as a percentage of retail revenue
remained at in 2012 as compared to 2011 and was relatively
constant in 2011 as compared to 2010.
Restructurings
In April 2012, we restructured and streamlined our eld
organization to beer align our restaurant and retail
operations under central leadership. e restructuring of
the eld organization and related changes in our headquarters
in Lebanon, Tennessee, resulted in the elimination of
approximately 20 positions. As a result, we incurred severance
charges of $1,660. We estimate that this restructuring
will generate annual pre-tax savings of approximately $5,000,
of which approximately $3,500 will be realized as a
reduction to general and administrative expenses and
approximately $1,500 will be realized as a reduction to labor
and related expenses.
In July 2011, we implemented a cost reduction and
organization streamlining initiative, which resulted in the
elimination of approximately 60 management and sta
positions. Most of the employees aected worked in our
headquarters and the restructuring did not aect any store
positions. As a result, in the fourth quarter of 2011, we
incurred severance charges of $1,768. Severance charges
are recorded in general and administrative expenses
(see sub-section below entitled “General and Administra-
tive Expenses”).
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