Business

Cracker Barrel is in a battle for relevancy. One of its solutions is surprising


new York
CNN

Julie Felss Masino, CEO of Cracker Barrel, recently gave a devastatingly frank assessment of the brand: “We’re just not as relevant as we used to be. »

Masino, who became CEO in July, laid out the diagnosis – and remedies – in a presentation to analysts in May. And that raises questions for those accustomed to the brand’s biscuits and gravy, wooden tables and chairs, puzzle games and porch rocking chairs.

“The way we communicate, the menu items, the look and feel of the stores… all of these things came up time and time again in our research as opportunities for us to really rediscover our relevance,” she said. declared.

The renovated Cracker Barrel Old Country Store (the brand’s full name) could include renovated restaurants with bookcases instead of lattice dividers and all-new banquette seating. The new Cracker Barrels could be smaller restaurants altogether, with menus including new dishes like green chile cornbread and banana pudding. Customers can see brighter interiors with simpler decor, moving away from the typical cozy clutter.

These changes are still being tested. Something new coming now? Dinner at a reduced rate from 4 p.m. to 6 p.m.

Why would Cracker Barrel, so desperate for relevance, rely on a tactic typically used to appeal to older people? Partly because many people eat early these days. And partly because he’s looking for a quick solution.

Jeff Greenberg/Universal Images Group/Getty Images/File

A woman eats lunch at Cracker Barrel.

Cracker Barrel, which opened in 1969, has long billed itself as a roadside spot where weary travelers can stop for a hearty meal in a cozy dining room, and also choose from a wide selection of trinkets in his country store. This speech, which largely appealed to baby boomers in the past, has not had a very good response since the pandemic.

Last year, when other diners returned to restaurants after the early pandemic years, Cracker Barrel’s older clientele remained cautious, visiting the chain less often. Now its retail stores are taking a hit as consumers cut back on spending. These same dynamics play out in his restaurants.

In the quarter ended April 26, Cracker Barrel’s total revenue fell 1.9% from a year earlier, the company said Thursday. Retail sales at stores open at least 18 months fell 3.8%, while restaurant sales fell 1.5%.

Wall Street hasn’t been impressed: The company’s shares have fallen nearly 37% this year and about 70% over the past five years. The Tennessee-based chain has approximately 660 locations across the country.

These new early offers, launched in February, are available Monday to Friday from 4 p.m. to 6 p.m. They start at $8.99 and include smaller portions of Cracker Barrel comfort foods like meatloaf and chicken.

Masino did not explicitly mention special offers when discussing Cracker Barrel’s long-term strategy. But she highlighted the offering during the company’s earnings conference call Thursday. It’s “an important part of our overall pricing strategy,” Masino said.

In some ways, an early bird special is a perfect solution: It can appeal to both Covid-cautious and budget-conscious seniors, as well as younger consumers who eat earlier.

“Six o’clock is the new eight o’clock,” said Lisa W. Miller, a consumer strategist who has consulted for major restaurant chains through her firm, Lisa W. Miller & Associates. “That four to six hour period…may also attract a younger family.” The Wall Street Journal declared over the summer that “America is becoming a nation of early birds.” And in recent years, nighttime dining options have dwindled.

Fewer people visited Cracker Barrel before 9 a.m. and after 6 p.m. in the first quarter of this year compared to this period in 2019, according to data from Placer.ai, which uses location data from mobile devices to estimate visits. visits to specific restaurants and outlets. Instead, the chain “saw an increase in late morning and lunch visits,” said RJ Hottovy, head of analytics research at Placer.ai. We also see an increase in the late afternoon, but to a lesser extent. This discrepancy “may explain the emphasis on early bird specials,” he said.

Attracting younger consumers during this period will depend somewhat on how the company advertises the offering, Miller noted. “It will all depend…on the creative executions – how are they going to do it? »

Masino said Thursday that Cracker Barrel was so eager to launch the promotion that it only recently began promoting it.

But it will be difficult to break the link between early dinners and the elderly, said John A. Gordon, founder and CEO of Pacific Management Consulting Group, a restaurant consulting firm.

“It’s so well known in this country that seniors go out to eat earlier,” he says. “Even if it changes… the fact that it’s aimed at older people is etched in people’s psyches. »

The company expects it will take years to revamp its brand, operations and restaurant models. But it needs to start improving its sales sooner. And right now, consumers want deals.

Fast food companies are once again fighting for dollars and cents, with many offering $5 packages. Casual restaurants like Chili’s and Applebee’s compete for customers with their own specialties.

To compete in this environment, Cracker Barrel carries out he has to come up with some type of deal. He seems to have decided that early dinners are the way to go.

There is a risk, Gordon said, that the offer will prove too popular. If too many people choose to dine at a discount, margins and profitability will suffer.

“They run the risk of Red Lobster here,” he said. “That they put something too popular and then they get overwhelmed. »

News Source : amp.cnn.com
Gn bussni

Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
Back to top button