Cracker Barrel CEO Julie Felss Masino announced earlier this month that a number of significant changes to the company will be rolled out.
These changes include some updates to the menu and a $700 million renovation of the chain’s restaurants.
Long History Losing Its Shine
Although Cracker Barrel is only a little more than fifty years old, there are many hundreds of years of history decorating the restaurants.
Masino has implied however that may be a relic of times gone by as she feels the brand has “lost some of its shine.”
Comprehensive Overhaul
It is anticipated that thirty of the chain’s locations will receive updates within the upcoming fiscal year.
Masino stated on a conference call on May 16 that “Cracker Barrel has historically made limited changes to our design aesthetic, and we’ve probably relied a little bit too much on what was perceived to be the timeless nature of our concept.”
Positive Reception
In the call, Masino mentioned that the changes, which include employing “a different color palette, updating lighting, offering more comfortable seating, and simplifying decor and fixtures,” have received positive feedback from customers thus far.
The chain isn’t the only one to move towards a sleeker, more improved style lately; in the fast-casual industry, Mcdonald’s, Wendy’s, and Taco Bell are all among the key figures that have moved towards a more cohesive, albeit plainer, new layout.
Distinct Style
Cracker Barrel, on the other hand, is a brand whose customer base strongly reacts to any hint of change and for which its anachronism has long been a selling point.
Thus, while Masino is anxious to appeal to new customers to reclaim some of Cracker Barrel’s corner of the market, there’s concern about whether or not the chain’s ongoing patrons will also embrace the new Cracker Barrel.
Awareness of Market Share
“We’re just not as relevant as we once were,” Masino said during the conference call held to talk about her ambitions for change in the company.
However, some of the chain’s previous efforts to capture a new audience — even minor ones — haven’t always been met well by its primary audience.
Past Efforts to Make a Change
For instance, Cracker Barrel made the announcement in a 2022 Facebook post that it would be adding vegan sausage to its menu.
The simple Facebook post read: “Discover new meat frontiers. Experience the out of this world flavor of Impossible™ Sausage Made From Plants next time you Build Your Own Breakfast.”
Negative Reactions
The negative reaction from regular patrons was swift and brutal from a cohort of the brand’s fans who saw the move as, best case scenario, not in line with the brand’s ethos.
Others were more scathing in their review as they saw it as a sign that Cracker Barrel had gone “woke” according to some commentators: “We don’t eat in an old small town shop for woke burgers.”
Conservatives and Plant-Based Meat
Reaction to these vegan offerings may be indicative of the overall culture war that appears to be happening regarding plant-based meat substitutes.
Research suggests that conservatives are put off by plant-based products. This might explain the negative reaction from fans of the Tennessee-based restaurant and gift shop chain when meatless sausages were touted as a new addition to the menu.
More Popular Menu Changes
While reactions to adding vegan offerings may have been less enthusiastic than hoped, this hasn’t deterred Cracker Barrell from tweaking the menu in an attempt to attract new customers.
Their summer menu, boasting dishes like the “NY Strip Steak n’ Shrimp Combo” and “Golden Carolina BBQ Chicken Tenders” has been far better received.
Greater Context of Change
While some of these remarks may have been sarcastic the whole situation was a microcosm of the risks associated with making changes as a brand with a more conservative cultural and political customer base.
There are many ways, it appears, to alienate loyal regular customers, particularly when straightforward menu items become a symbol for a continually fraught culture war.
Go Woke, Go Broke?
Cracker Barrel would not be the first brand to struggle with a more “woke” identity potentially alienating consumers.
The American lingerie and clothing retailer Victoria’s Secret recently announced it would be ditching its “woke” and feminist campaigns of recent years as it attempted to reverse a trend of plummeting shares.
Financial Strain
Notwithstanding, from a financial point of view, Cracker Barrel needs to try something else. As per a report from CBS News, Cracker Barrel’s sales have plateaued.
As per their report “revenue for its most recent quarter unchanged at $935.4 compared with a year earlier, while its stock has tumbled 40% so far in 2024.”
Reasons for these Financial Struggles
The restaurant industry as a whole is facing challenges as customers are becoming more savvy with their spending. However, Cracker Barrell specifically may have been impacted due to its target market.
Much of the brand’s offering, with roadside dining and a collection of knick-knacks at its country stores, seems targeted at older demographics like baby boomers.
Post-Pandemic Struggles
Coming out of the pandemic, many customers were keen to get back to restaurants as the world opened up again.
However, older people like a good portion of Cracker Barrel’s clientele were more cautious about heading back out. They visited the chain less often, which may have contributed to Cracker Barrel’s financial woes.
Adjusting Menu Prices
Looking at an overhaul of menu offerings is one aspect of Cracker Barrel’s strategy to try and boost its fortunes.
While a brand well known for affordability, Cracker Barrel isn’t immune to current economic strains. They’re looking at adjusting menu prices to combat inflation.
Keeping Pace
As a chain, Cracker Barrel needs to do something to keep pace with competitors, and price increases are common across many restaurants and fast-food outlets.
Recognizable brands like Chipotle and even McDonald’s have all increased the price of menu items recently amidst rising business costs due to an increased cost of living and minimum wage hikes.
Reactions to Price Increases
Consumer reactions to these price increases have quite predictably been less than positive.
Amidst pretty substantial price rises over the last few years, McDonald’s has reported less food traffic in restaurants and a drop in revenue from lower-income customers in particular. For many, eating at home rather than eating out is a simple matter of affordability.
Reflecting Cracker Barrel Customer Salaries
Cracker Barrell will be keen to avoid pushing customers away with price increases, especially given the brand’s association with affordability.
However, Cracker Barrel has locations in numerous different Markets. Masino recognizes that restaurant locations in these different markets have a range of different average customer incomes, and pricing can be adjusted to meet the needs of different markets.
Optimizing Price Points
Masino was quick to clarify exactly what Cracker Barrel “optimizing price points” would entail for customers.
She clarifies that it doesn’t necessarily translate into simply increasing prices. She says: “In several places, it may actually mean taking the opposite approach. We understand the lower-end consumer is challenged and value is and will remain an important part of the brand and we will work vigorously to protect it”.
Early Bird Specials
Another menu-based strategy Cracker Barrel is employing is introducing early-bird menu deals. These deals launched in February and are available from 4 pm-6 pm, Monday to Friday.
Starting at $8.99, customers can buy reduced portions of the brand’s signature comfort country food. Without commenting on them specifically, Masino pointed to these early-bird offerings as a part of the brand’s “overall pricing strategy” in the company’s earnings call.
Good Way to Attract Young and Old Customers
Introducing early-bird specials could be a good way to attract older patrons back to the restaurants, who maybe dropped off as customers coming out of the pandemic.
These more affordable menu options could also attract more cost-conscious younger patrons also. As noted by the Wall Street Journal, people are tending to eat earlier, and “America is becoming a nation of early birds”.
Impressive Decor Range
The typical Cracker Barrel restaurant has 1,000 items of decor adorning its Southern country-themed walls.
A range of these are standard from one restaurant to another — like the traffic signals placed over the bathroom entryways or the barrels with checkerboards placed in front of the chimneys — some of the items are unique to the local surroundings.
Unique Locations
In Fort Payne, Alabama was known toward the start of the twentieth 100 years as the “Sock Capital of the World” in light of the fact that its textile plants created over half of the socks and hosiery worn in the US.
Subsequently, the city’s nearby Cracker Barrel includes a whole wall embellished with things like industrial sock stretchers, darning needles, and sewing machines.
The bid for Cracker Barrel to capture a new market share after difficulties following the COVID-19 pandemic will need to be done tactfully in order to avoid alienating their more conservative base.
