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Cracker Barrel hopes that investing $700 million in renovating its restaurants can save the moribund chain.
The six-point plan includes a makeover for the stores with brighter colors to make them less dated, a new logo and new menus.
New items on the simplified menu include green chile cornbread and shepherd’s pie with potato chip casserole. Two stores have already been renovated and another ten are testing a revamped menu.
But CEO Julie Masino said prices at many outlets will go up.
Southern-themed restaurants, with 662 locations nationwide, have lost more than a sixth of their customers in just four years, and the trend continues.
The drop in customers has led to store closures and bosses developing a plan to turn things around.
But when Masino was unveiling those plans last week, he told investors that chian was “not as relevant as before,” sending the company’s shares tumbling.
At Cracker Barrel, those 65 and older are the most common age group among customers.
One of the key challenges is attracting younger customers, with Cracker Barrel’s most loyal customers being those 65 and older.
Masino, who joined nine months ago from Taco Bell, described the five pillars of improvement in the earnings call. DailyMail.com heard you and we summarize the plan below.
“The brand has lost some of its shine, especially after the pandemic,” he said. “But to drive growth, we must revitalize the brand.”
Renewed logos
‘Cracker Barrel is an iconic brand, but even iconic brands have to evolve. “We know from our research that despite high levels of consumer affinity, we are simply not as relevant as we once were,” Masino said.
The company has hired a branding agency to create a new logo and colors, but still “continues to be rooted in the heritage and legacy of our country.”
“Our second strategic pillar has to do with what represents about 80 percent of our sales, our menu,” he said.
He added: ‘In February, we launched a main menu revamp test that included approximately 20 new items, several modified items, and more than 20 removals.
‘We are satisfied with the response from guests. For example, eight of the new lunch and dinner entrees rank in the top 20 for core product mix in these stores.
“We’re also seeing a strong mix of new products in other categories, like our green chile cornbread and our banana pudding.”
Cracker Barrel now has the new menu in ten stores. Some of the items will reach all restaurants in the fall.
These include premium savory chicken and rice, slow-cooked stew, and shepherd’s pie with chip casserole.
To speed things up and reduce costs, they will no longer cut the lettuce by hand.
Masino gave a hint that prices could also rise.
Cracker Barrel has five price tiers for areas with different costs, but said 60 percent of outlets were in the lowest cost tier.
He said some might be charging more.
“We have stores in metropolitan areas with an average annual household income of $55,000 at the same price level as one with $90,000,” he said.
But he added that in some areas menu prices could be reduced.
“I want to emphasize that optimizing our prices across the menu does not mean simply increasing prices,” he said.
“In several places, this may actually mean taking the opposite approach. “We understand that the low-end consumer faces a challenge and that value is and will continue to be an important part of the brand, and we will work vigorously to protect it.”
Cracker Barrel stores have extensive menus, with items like Chicken N’ Dumplins, which costs $11.49.
Cracker Barrel sells food like chicken tenders for $12.99
Cracker Barrel stores will receive an update. This is one of the old designs.
The business slumped further when its chief executive, Julie Felss Masino, told investors: “We’re just not as relevant as we once were.”
Renovated stores
Cracker Barrels is deliberately meant to reflect an old country store selling small things and simple, comfort food.
Masino said it will change the “design and atmosphere of the store.” There will be investments in “old” stores.
She hinted at a new look. “Historically, Cracker Barrel has made limited changes to our design aesthetic,” she said.
‘And we have probably relied too much on what was perceived as the timeless nature of our concept.
‘We began to carry out a pilot remodeling in two test stores. This included renovating the interior and exterior of these stores by using a different color palette, updating lighting, offering more comfortable seating and simplifying décor and fittings.’
The stores have been a success and are ready to be opened. It expects to complete between 25 and 30 renovations in fiscal year 2025.
Loyalty application and delivery
He said Cracker Barrel Rewards has 5 million members after launching in mid-September, up 25 percent from projections.
The company also plans to offer more delivery through companies like Uber Eats.
Staff benefits
The company plans to make it a better place for staff to work, with better training, simpler roles and more technology to help them do their jobs.
“Our people are at the center of everything we do,” he said. And ultimately, when you feel good about where you work and what you do, you are happier. And that translates to the guests.
The price was not one of the pillars, but Masino gave a clue about the price increases.
Cracker Barrel has five price tiers for areas with different costs, but said 60 percent of outlets were in the lowest cost tier.
He said some might be charging more.
“We have stores in metropolitan areas with an average annual household income of $55,000 at the same price level as one with $90,000,” he said.
But he added that in some areas menu prices could be reduced.
The company’s plan has met with mixed reactions. Since the May 16 call, shares of the 54-year-old company have fallen nearly 20 percent.
On Thursday, May 24, Cracker Barrel was trading at just $45.35, its lowest level in more than a decade. This year it is down 40 percent in total.
The restaurant rose to fame after its founding in 1969 when customers flocked to its all-American dishes, such as biscuits and gravy and fried chicken.
Management doesn’t anticipate the costly rebrand to come to fruition until late 2026 and 2027.
Cracker Barrel has lost a significant 16 percent of diners over the past four years, and the trend continues.
“One of the main reasons the stock is down is that there wasn’t much of a plan,” Truist analyst Jake Bartlett told the newspaper. New York Post.
Cracker Barrel has lost a significant 16 percent of diners in the last four years, and the trend continues
“They announced a plan for a plan, but did not give investors enough information to judge whether reinvesting in stores was a credible plan to address traffic losses.”
One particular obstacle the company faces is attracting young customers.
“They have a lot of older consumers, so in the long run they’re going to have to move away from that consumer,” Bartlett said.
However, the company, which faced backlash for its anti-LGBT policies in the 1990s, has struggled to maintain its senior clientele while attracting Generation Z customers.
Last year, Cracker Barrel was accused of being “woke” when the restaurant covered its porches with rainbow-colored rocking chairs during Pride Month, and customers even boycotted the chain, which has locations in 45 states.
