Cracker Barrel is struggling to stay relevant. One of their proposed strategies is unexpected.
Masino, the recent CEO appointed in July, delivered her report on the company's situation and possible solutions in a May presentation to the analysts. This has generated concerns for those familiar with Cracker Barrel's iconic biscuits and gravy, wooden furnishings, mind-puzzling games, and rustic porch chairs.
"The way we communicate, the menu items, the interior of the stores, and our overall atmosphere have repeatedly emerged as areas where we can regain relevance," she explained.
The proposed renovated version of Cracker Barrel Old Country Store might feature refurbished restaurants with bookcase dividers replacing lattices, alongside new upholstered banquette seating. New Cracker Barrels might be more compact, with menus offering new dishes such as green chili cornbread and banana pudding. Customers could also experience brighter interiors with minimalist decor, shifting away from the usual cozy clutter.
These changes are still being tested. At the moment, a promising move is offering discounted dinners between 4 and 6 p.m.
Why would a company craving relevance embrace a tactic predominantly used to invite elderly individuals? It's partially due to the rising trend of early eating hours. And it's also a short-term fix.
Welcome to the early bird club
Cracker Barrel, established in 1969, has often portrayed itself as a roadside destination where weary travelers can enjoy a hearty meal in a cozy dining room and shop from an extensive range of knick-knacks at their country store. This pitch, which found favor with Baby Boomers, is no longer resonating effectively after the pandemic.
In the year that concluded on April 26th, Cracker Barrel's overall revenue experienced a 1.9% decline compared to the previous year, as reported by the company last week. Sales at retail stores that had been operational for at least 18 months slumped by 3.8%, while restaurant sales decreased by 1.5%.
The financial market hasn't been generous either; Cracker Barrel's stock is down by 37% this year and a whopping 70% in the past five years. Headquartered in Tennessee, the company owns and operates about 660 locations spread across the country.
These "early bird" deals that debuted in February, available from 4 to 6 p.m. on weekdays, offer discounted dinners and smaller portions of Cracker Barrel's traditional country comfort food, featuring dishes like meatloaf and chicken.
Masino didn't expound specifically about the long-term plans for Cracker Barrel during the discussion about the business strategy, but she did discuss this promotional initiative during its earnings call on Thursday. It "is an integral part of our overall pricing strategy," Masino explained.
In some ways, an early bird special proves ideal as it may attract both senior citizens on a budget and younger patrons embracing the habit of eating earlier.
"Six o'clock is the new eight o'clock," said Lisa W. Miller, a consumer specialist who has worked with large restaurant chains through her firm, Lisa W. Miller & Associates. "That four to six time slot is attracting a younger family," she observed. Information from The Wall Street Journal suggests that this summer, "America is turning into a nation of early birds." And over the past few years, late-night dining options have reduced substantially.
Cracker Barrel observed a decrease in customers visiting during pre-9 AM and post-6 PM timeframes in the first quarter of 2023 when compared to the same time frame in 2019, as revealed by data from Placer.ai, which employs location data from mobile devices to project visits to specific restaurants and retail centers. However, it also noticed an increase in late-morning and lunch visits. The disparity could potentially provide insight into the rationale behind the early-bird promotions.
Attracting younger consumers during the earlier time slot will largely hinge on Cracker Barrel's promotions. As Miller pointed out, "It all hinges... on the creative executions – how are they approaching it?"
In this competitive market, Cracker Barrel understands that it needs to provide some sort of perk to attract customers. Their choice? Offering discounted early dinners.
However, according to Gordon, there's the possibility that this promotion could become too popular. If a large number of people opt for these cheaper meals, the company's margin and profitability could suffer significantly.
He added, "It's like the Red Lobster problem. They introduced something too appealing and consequently, got swamped by its popularity."
Read also:
- Masino mentioned that the early bird discounted dinners between 4 and 6 p.m. are a key part of Cracker Barrel's overall pricing strategy.
- The early bird specials, offering discounted dinners and smaller portions, could potentially attract younger consumers who are embracing the habit of eating earlier.
