New CEO tanks American staple Cracker Barrel: ‘We’re just not as relevant’

Cracker Barrel Old Country Store is an American staple that may be in trouble, and the company’s new CEO is not helping matters.

The iconic restaurant brand has been struggling with sales and traffic since the COVID-19 pandemic, according to Nation’s Restaurant News, which noted that Cracker Barrel has endured “several quarters of dwindling numbers — including, most recently, 4% traffic decline for the second quarter ended Jan. 26.”

The restaurant chain features a Southern country theme and serves all-American dishes like biscuits and gravy and fried chicken. New CEO Julie Felss Masino’s assessment of Cracker Barrel’s struggles led to the company’s stock plummeting by nearly 20 percent.

“We’re just not as relevant as we once were,” Masino said during an investors call, before adding, “Some of our recipes and processes haven’t evolved in decades.”

“Cracker Barrel is an iconic brand, but even iconic brands have to evolve,” Masino said, according to NRN. “We know from our research that despite high levels of consumer affinity, we’re just not as relevant as we once were. We need to address these dynamics by refreshing and refining the brand and reflecting this in all of the ways we interact with our guests…. we will take what is known and beloved about our differentiated brand and build upon it so that it’s more relevant to today’s and tomorrow’s guests.”

The independent food service industry publication said Masino is pushing a new “strategic transformation” that will include five pillars: a brand evolution, menu enhancement, store remodels, digital and off-premises investment, and employee experience improvement.

The CEO said the goal is to modernize the brand’s marketing strategy to “resonate with today’s guest,” with Cracker Barrel investing as much as $700 million over the next three years.

Strategic pricing initiatives are also being looked at, with Masino focusing on “the lower-end consumer.”

“We believe there’s a large opportunity to improve the way we price both across the menu and across doors to hit the sweet spot where pricing at a store is optimized based on consumer willingness to pay competitor prices and store operating costs,” Masino said. “We understand the lower-end consumer is challenged, and value is and will remain an important part of the brand. We will work vigorously to protect it.”

Cracker Barrel is also investing in digital technology and its new rewards program.

“While it’s still early, we’re very encouraged by the initial success of the program… after launching in mid-September, we already have nearly five million Cracker Barrel rewards members, which is approximately 25% higher than our initial projection,” Masino said. “We believe this speaks to the appeal and distinctiveness of the program and gives us confidence to lean in even more than we have.”

Cracker Barrel diners can expect an “updated” menu that will include some traditional menu items being scratched, and a remodeling of the stores will include “refreshing the interior and exterior” with a “different color palette.”

Masino was criticized for the rollout of the changes.

A big reason the stock is down is that there wasn’t much of a plan,” Truist analyst Jake Bartlett told The New York Post. “They announced a plan for a plan but they didn’t give investors enough information to judge whether reinvesting in the stores was a credible plan to address the traffic losses.”

Tom Tillison

Comment

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

Latest Articles