Cracker Barrel 2012 Annual Report Download - page 20

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 36.8%, 37.1% and 37.8% in 2012, 2011 and
2010, respectively. e year-to-year percentage change from
2011 to 2012 resulted from the following:
2011 to 2012
(Decrease) Increase as a
Percentage of Total Revenue
Store hourly labor (0.3%)
Health care costs (0.2%)
Store bonus expense 0.2%
e decrease in store hourly labor costs as a percentage of
total revenue resulted from improved productivity due to our
enhanced labor management system and menu price increases
being higher than wage ination.
e decrease in our health care costs from 2011 to 2012
resulted from a change in our group policy. Employee health
care expenses in the calendar 2011 plan year were lower due
to improvements in claims experience. As a result of these
improvements, we negotiated a retrospectively rated group
policy during the rst quarter of 2012. is policy is retroac-
tive to January 1, 2011 and provides for a reimbursement of
health insurance premiums based on actual claims experience
through the end of calendar year. e terms of this policy
resulted in us receiving approximately $5,200 in net reim-
bursement for these health insurance premiums during 2012,
which reduced our health care costs. is reduction was
partially oset by higher claims experience in 2012. Addition-
ally, we do not expect to receive a reimbursement for health
insurance premiums in 2013 and have included a provision
for a retroactive increase during the second half of 2012.
Higher store bonus expense in 2012 as compared to 2011
reected beer performance against nancial objectives in
2012 as compared to the prior year.
e year-to-year percentage change from 2010 to 2011
resulted from the following:
2010 to 2011
Decrease as a Percentage
of Total Revenue
Store management compensation (0.3%)
Health care costs (0.2%)
Store hourly labor (0.2%)
e decrease in store management compensation resulted
primarily from lower store bonus expense, which reected
lower performance against nancial objectives as compared to
the prior year. e decrease in health care costs resulted from
lower medical claims. e decrease in store hourly labor costs
as a percentage of total revenue resulted from menu price
increases being higher than wage ination.
Other Store Operating Expenses
Other store operating expenses include all store-level operating
costs, the major components of which are utilities, operating
supplies, repairs and maintenance, depreciation and amortiza-
tion, advertising, rent, credit card fees, real and personal
property taxes and general insurance. Other store operating
expenses as a percentage of total revenue were 18.0%, 18.6%
and 18.2% in 2012, 2011 and 2010, respectively.
e year-to-year percentage change from 2011 to 2012
resulted primarily from the following:
2011 to 2012
(Decrease) Increase as a
Percentage of Total Revenue
Utilities (0.2%)
Litigation selement (0.1%)
Credit card fees (0.1%)
Supplies (0.1%)
Advertising 0.2%
e decrease in utilities expense from 2011 to 2012 resulted
primarily from lower natural gas costs.
In the rst quarter of 2012, we received proceeds from a
litigation selement and recorded the proceeds as a gain in
other store operating expenses since the selement related to
a maer previously recorded in other store operating
expenses. Because we believed this selement represented a
gain contingency, we did not record the gain until the
selement amount and timing were assured.
e decrease in credit card fees from 2011 to 2012 resulted
from a reduction in debit card fee rates due to a change in
Federal law governing such fees. We believe that the decrease
in supplies expense as a percentage of total revenue from
2011 to 2012 resulted primarily from our eorts to control
this expense.
e increase in advertising expense from 2011 to 2012
resulted from our change in advertising strategy during 2012
in which we spent more on television advertising than in
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