Cabela's 2008 Annual Report Download - page 4

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average ticket in our comparable store base, improved
customer service levels across our entire store base
and improved labor as a percentage of sales. Thanks
to the hard work of our Outfi tter Associates, Cabela’s
was ranked number 11 in the National Retail Federation
Customers’ Choice Awards.
In addition to our improvements in retail operations, we
also realized signifi cant improvements in distribution
effi ciencies. Distribution costs as a percentage of
merchandise revenue improved 40 basis points in
2008 as compared to 2007, and automated receiving
of inbound units improved to 66% of units from 41%
of units last year. We were very pleased with the
distribution effi ciencies we realized in 2008 and look
forward to further improvement in 2009.
World’s Foremost Bank continued to add new cardholders.
In 2008, the average number of active accounts increased
15.5% to 1.14 million average active accounts. The
Cabela’s CLUB Visa loyalty program provides us a
signifi cant strategic advantage over our competitors, and
we will continue to add new Cabela’s CLUB members to
gain market share from our competition.
The Year Ahead
Given the challenging macro-economic environment we
experienced in 2008 and expect to continue into 2009, I
have challenged our employees to focus on aggressively
controlling costs, improving retail profi tability and
improving return on invested capital (ROIC) while
continuing to focus on legendary customer service.
Cost Control
Our primary focus for 2009 will be on controlling costs
and preserving cash. Current non-employee related
actions being taken include more aggressive negotiation or
renegotiation with all merchandise and non-merchandise
vendors, increased emphasis on collection of outstanding
receivables and reducing national/brand advertising as
well as third-party contractual arrangements. Employee
related items include eliminating merit increases in
2009 for several hundred of our more senior employees,
offering a one-time early retirement program, eliminating
corporate overtime and implementing a hiring slowdown.
Should the macro-economic environment deteriorate
dramatically, we have identifi ed other actions we can take
to help offset the impact and more aggressively conserve
cash and manage costs.
Retail Profi tability
Throughout 2009, we will focus on several areas to
further improve retail store operations and profi tability,
including identifying operational ineffi ciencies with plans
to streamline operations and backroom productivity.
Additionally, we have initiatives designed to improve our
retail advertising process, calendar management and
assortment changes.
In 2008, we signifi cantly improved our labor productivity
and expect further improvements throughout 2009. We
will continue to focus on improving our mix of selling
versus non-selling labor in our retail stores. We will
also be establishing base-line staffi ng in all stores and
cross-scheduling capabilities during peak times.
Labor productivity improvements will not come at
the expense of the world-class customer service for
which Cabela’s is known. In 2008, we implemented
online customer shopper surveys, which we call
Voice of the Customer, designed to measure and help
us better manage and improve customer service
levels in our stores. The program was extremely
successful, and we are continuing it in 2009 to
improve customer service levels.
We will continue to leverage our in-store kiosks and in-
store pick-up programs to extend the largest assortment
in our industry to our retail sales fl oor. To ensure an
industry-leading position, we plan to improve process
effi ciencies and program offerings while enhancing
customer communication.
Finally, we have set aggressive targets this year to
improve retail advertising lift. Even in this economy,
our “best customer” list continues to increase,
creating additional sales opportunities. Due to the
current economic climate, we also see opportunities to
renegotiate many of our paper, printing and distribution
costs. We expect these factors, along with improved
creative elements of our retail advertising, to improve
retail advertising lift in 2009.
Return on Invested Capital
We also are very focused on increasing return on
invested capital, which will be one of the key metrics
we use to judge our success in 2009. While the
improvements in retail store productivity discussed
above will have a positive impact on ROIC, we are
undertaking several other initiatives in the coming year.