Cracker Barrel has long been known for its combination of rustic charm and country dishes like biscuits and gravy. But its new CEO said that the old approach isn't working any longer — and she's planning some major changes.
"We're just not as relevant as we once were," Cracker Barrel CEO Julie Felss Masino said on a May 16 conference call to discuss her plans to update the restaurants.
Masino, a former Taco Bell executive who stepped into the role of Cracker Barrel CEO in August, said the company "has lost some of its shine" and needs a "transformation" to continue to appeal to its current customer base and draw new diners. Cracker Barrel's sales have flatlined, with 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.
Its challenges range the gamut from prices to menu options, she added, citing a recent in-house study that compares Cracker Barrel with its competitors, based on food, experience, value and convenience. To be sure, Cracker Barrel isn't alone in struggling to keep customers coming back, as other food chains have recently reported problems with convincing inflation-weary consumers to return. But the company notes other concerns.
"[W]e are not leading in any area," Masino said. "[T]he reality is we've lost some market share, especially at dinner."
The company is now planning to make several changes to help refresh the brand and bring back its customers.
Here are three changes Masino said could soon be rolled out to all or many of Cracker Barrel's 660 locations.
Green chili cornbread
To make itself "more relevant to guests," Masino said, the chain has been experimenting with new menu items.
In more than 10 locations, Cracker Barrel has tested 20 new items, including green chili cornbread and banana pudding, she noted.
Based on customer feedback, Cracker Barrel plans to roll out several new dishes to all its restaurants this fall. They include:
- Premium savory chicken and rice
- Slow-braised pot roast
- Hashbrown casserole shepherd's pie
Tweaking prices
The chain also plans to tweak its pricing tiers, with Masino noting that prices at about 60% of its restaurants are in its lowest cost tier. But she suggested that some restaurants could be charging more.
"For example, we have stores in metro areas with an average annual household income of $55,000 in the same pricing tier as one with $90,000," she told investors on the call.
In some cases, however, menu prices could be trimmed, Masino added.
"I want to emphasize that optimizing our price points across the menu doesn't mean just increasing prices," she said. "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."
Noticeably different, but still Cracker Barrel
The chain is piloting a remodel of its restaurants, which Masino said involve using "a different color palette, updating lighting, offering more comfortable seating and simplifying decor and fixtures."
"The goal, simply put, was to freshen things in such a way as to be noticeable and attractive but still feel like Cracker Barrel," she said, adding that customer feedback has been positive.
Cracker Barrel plans to remodel as many 30 stores in its next fiscal year, she added.
On top of that, the chain is planning on debuting some new locations in fall 2025 that are about 15% smaller than its current restaurant footprint, Masino noted.
"Historically, Cracker Barrel has made limited changes to our design aesthetic, and we've probably relied a little too much on what was perceived to be the timeless nature of our concept," she said.
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