Cracker Barrel 2013 Annual Report Download - page 17

Percentage of retail sales to total sales indicates the relative
proportion of spending by guests on retail product at our
stores and helps identify overall eectiveness of our retail
operations. Management uses this measure to analyze a store’s
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 2013
Management believes that the Cracker Barrel brand remains
one of the strongest and most dierentiated brands in
the restaurant industry. During 2013, we focused on six key
business priorities which were based on our previously
announced long-term strategy to Enhance the Core Business,
Expand the Footprint of Cracker Barrel Old Country Store and
Extend the Brand beyond the four walls of our stores. We
believe the successful implementation of these six priorities
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 2013 were as follows:
(1) Refresh select menu categories that will reinforce our
value and provide healthier options to our guests.
Having analyzed our marketplace, guests’ feedback and
brand positioning, we focused our menu initiatives on
satisfying our guests’ needs for aordable options,
healthier items and customizable choices. As part of our
fall and holiday promotions, we introduced new sides to
meet guests’ preferences for lighter and healthier options
to customize their meals. ese sides later transitioned
to our core menu. During the spring, we reinforced the
aordability of our menu by refreshing and highlighting
our Country Dinner Plates, which include over 10 entrée
choices at a $7.69 price point. Seasonal promotions
included limited time oerings of additional entrée
choices. roughout the year, we tested a new category
for our menu, Wholesome Fixin’s®. e category will
provide avorful and fresh meals with under 600 calories.
We introduced Wholesome Fixin’s in the rst quarter
of 2014.
(2) Grow retail sales with unique merchandise. Further
dening the distinctive Cracker Barrel experience, we
focused on merchandising our stores with unique and
nostalgic items. We developed collections with broad
generational appeal and unique product assortments, such
as our horse-theme merchandise and our American
Pride assortment. One of our strongest categories,
women’s apparel and accessories, continued to see growth
throughout the year.
(3) Build on the successful “Handcraed by Cracker Barrel”
advertising campaign. During the rst quarter of 2013,
we refreshed our billboards to our Handcraed by
Cracker Barrel advertising theme. Many of the billboards
highlight our made-from-scratch cooking with slogans
like “Homemade Doesn’t Cost Extra” and “Fresh Meals.
Friendly Prices.” Other billboards highlighted our
brand’s value and aordability. Of our 1,600 billboards,
approximately 300 display sharp price-point messaging
around our $5.99 Daily Lunch Specials or $7.69
Country Dinner Plates. In addition, we continued with
our Handcraed by Cracker Barrel media advertising
and maintained the approach that we adopted in 2012,
using national cable to drive brand awareness and spot
radio to deliver product news during our busy holiday and
summer seasons. We updated the radio spots with
current menu and product oerings and ran new TV
commercials during the summer campaign.
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