DENVER — Cracker Barrel is planning some major changes.
The CEO announced changes May 16 in a conference call with investors for the company known for its country food dishes and rustic décor. Cracker Barrel CEO Julie Masino said the company has "lost some of its shine," particularly in its recovery from the pandemic.
"We're just not as relevant as we once were," Masino said.
Masino said some of the restaurant's dishes haven't been updated in decades, and while that is fine for some items, like handmade dumplings, there will be room for menu updates and pricing changes.
"[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 plans to begin a "strategic transformation plan" to bring back customers and improve business by driving relevancy, delivering food and an experience guests love, and growing profitability."
Masino detailed pillars that could be rolled out at some or all of Cracker Barrel's stores under its strategic transformation plan.
Menu innovation
Masino said it will lean into innovation for its menu, particularly at dinner time. She said the company needs more items at dinner that are "authentically" Cracker Barrel yet appeal to a variety of current tastes.
She said Cracker Barrel began testing new menu items in February with several modified items and new items. New green chili cornbread and banana pudding were among the most popular new items, Masino said.
Masino said Cracker Barrel will continue to be a scratch-made food company but that its menu might be reduced with some items being removed.
Price changes
Masino said the chain will improve the way it prices items. Some stores will reduce prices and other stores might increase prices depending on location.
"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," Masino said.
Masino said there has been a lift of 3% in stores where the price changes started in January with no affect in store traffic.
"I want to emphasize that optimizing our price points across the menu doesn't mean just increasing prices," Masino 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."
Restaurant refresh
Cracker Barrel is testing a remodel of its restaurants.
Masino said the tests stores are 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," Masino said, adding that customer feedback has been positive.
Store changes
Masino said Cracker Barrel will debut a prototype merchandise store that is 15% smaller than its current store in fall 2025. She said there's potential to create an even smaller prototype.
Masino said the "treasure-hunt" feel of Cracker Barrel's stores remains an important part of its business strategy.
"I am excited about our strategic transformation plans to drive relevancy, deliver food and experiences guests love, and grow profitability," Masino said. "Cracker Barrel is an iconic brand with an exceptionally strong foundation, and I firmly believe our plans will allow us to capitalize on our strengths and deliver long-term success."
"Executing this strategy will require increased investment in our business, and we have reduced our dividend so that we can allocate capital to generate organic growth and drive meaningful value creation over time," Masino said. "Our Board, our management, and our teams are excited about our plans and are already hard at work to make them a reality."
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