New York (CNN) — Cracker Barrel’s CEO, Julie Felss Masino, recently delivered a stark and honest assessment of the beloved American chain: “We’re just not as relevant as we once were.”
Masino, who took on the role of CEO in July, outlined both the issues and potential solutions during a presentation to analysts in May. Her candid evaluation raises questions for fans of the brand’s iconic biscuits and gravy, wooden tables, brain teaser games, and signature front porch rocking chairs.
A New Direction for Cracker Barrel
In her presentation, Masino highlighted several areas for improvement identified through extensive research. “The way we communicate, the things on the menu, the way the stores look and feel … all of these things came up time and time again in our research as opportunities for us to really regain relevancy,” she said.
Potential changes could include remodeled restaurants featuring bookcases instead of traditional lattice dividers and brand-new banquette seating. Cracker Barrel might also experiment with smaller restaurant formats and menu additions like green chili cornbread and banana pudding. Additionally, brighter interiors with simpler decor could replace the typically cozy but cluttered atmosphere.
While these changes are still in the testing phase, one new initiative already underway is a discounted dinner service from 4 to 6 p.m.
Why Early Bird Specials?
Cracker Barrel, established in 1969, has long marketed itself as a roadside haven where travelers can enjoy a hearty meal in a homey setting and browse a variety of knick-knacks in its country store. This appeal, once strongly resonant with Baby Boomers, has waned post-pandemic.
Last year, as other diners flocked back to restaurants, Cracker Barrel’s older clientele remained cautious, leading to a decline in visits. The economic downturn has also impacted its retail sales, with consumers cutting back on discretionary spending.
In the three months ending April 26, Cracker Barrel reported a 1.9% drop in total revenue compared to the previous year. Retail sales at stores open for at least 18 months fell by 3.8%, and restaurant sales decreased by 1.5%. Wall Street has reacted negatively, with the company’s stock plummeting nearly 37% this year and about 70% over the past five years.
The early-bird deals, which started in February, aim to attract both budget-conscious seniors and younger consumers who are eating earlier. These specials, available Monday through Friday from 4 to 6 p.m., offer reduced portions of Cracker Barrel’s signature dishes starting at $8.99.
Changing Dining Habits
“Six o’clock is the new eight o’clock,” noted Lisa W. Miller, a consumer strategist who has consulted for major restaurant chains. This shift in dining habits is supported by data from Placer.ai, showing fewer people visited Cracker Barrel before 9 AM and after 6 PM in the first quarter of this year compared to 2019. Instead, there has been an increase in late morning and lunch visits, with a smaller rise in late afternoon visits. This trend helps explain the emphasis on early-bird specials, according to RJ Hottovy, head of analytical research at Placer.ai.
Marketing and Future Strategies
Attracting younger consumers during the early evening will depend heavily on the company’s advertising strategies, said Miller. “It’s all going to depend … on the creative executions — how are they going after it?”
Masino acknowledged that Cracker Barrel was eager to roll out the early-bird promotion and only recently started advertising it. Breaking the association between early dinners and senior citizens will be a challenge, said John A. Gordon, founder and CEO of Pacific Management Consulting Group. “It’s so well known in this country that seniors go out to eat earlier,” he said.
Looking Ahead
Cracker Barrel anticipates that revamping its brand, operations, and restaurant models will take years. However, it needs to boost sales in the short term, especially as consumers increasingly seek value deals. To compete, Cracker Barrel has embraced early dinners as a strategy.
There is a risk, Gordon cautioned, that the promotion could become too popular, potentially impacting profit margins. “They run the Red Lobster risk here,” he said. “That they put in something too popular and then they get overwhelmed with it.”
Despite these challenges, Cracker Barrel is committed to regaining its relevancy and appealing to a broader audience.
