Cracker Barrel Is Still Losing Customers—Here's How It Hopes to Win Them Back
Cracker Barrel struggled with declining guest counts throughout all of 2023—and it still hasn't managed to reverse the trend in 2024.
The country-themed restaurant chain, known for its all-day breakfast and southern-style fare, just released its latest earnings report for the quarter that ended on Jan. 26. In a Feb. 27 call with investors where Cracker Barrel discussed its latest financial results, Chief Financial Officer Craig Pommells revealed that customer traffic dropped 4% during the quarter.
He added that the company expects "industry traffic to remain pressured for the remainder of the fiscal year." Other key takeaways from the quarter included a 1.2% increase in same-store sales, a 4.8% increase in menu prices, and a 5.3% drop in comparable sales for Cracker Barrel's in-restaurant gift shops.
Declining customer traffic has become a persistent issue for Cracker Barrel over the past year. The chain also lost customers during the four quarters that preceded the latest quarter, including a 7.1% drop in traffic during the period that ended on Oct. 27.
During previous earnings calls where Cracker Barrel discussed the traffic woes, company executives blamed the declines on factors like insufficient marketing, needed improvements in the guest experience, and a larger trend of consumers dining out less due to inflation.
Executives didn't offer any additional insight about why traffic has continued to fall during the Feb. 27 call. However, new CEO Julie Felss Masino did outline several ways in which the company hopes to win customers back and improve Cracker Barrel's overall performance and profitability.
One key part of this initiative is evolving the Cracker Barrel brand "to meet changing consumer tastes and needs," Masino said. The company has started testing changes to the interior design of its restaurants, such as adding new decor, lighting, and paint. Since the actual food is such a key part of what draws customers to restaurants, Cracker Barrel is also testing a major revamp of its core menu in select stores.
"This test includes approximately 20 new items, several modified items, and over 20 deletions, as we seek to balance our innovation with simplification," Masino explained.
Meanwhile, Cracker Barrel also just debuted a new early dinner menu that features smaller versions of seven entrées, with prices starting at $8.99. Masino hopes that the new dine-in menu, which is available from 4 to 6 p.m. on weekdays, will draw in more "price-conscious" guests during a typically slow time of day.
Additionally, Cracker Barrel hopes to drive more customer visits through its new loyalty program that launched in September, as well as by focusing on store operations and execution to improve the guest experience.
"Obviously, there is a lot of work to do and it will not be quick or easy, but I am excited and optimistic about the path we are on," Masino said.
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