Move aside Red Lobster, Cracker Barrel appears to be the latest chain in trouble. The restaurant's new CEO made a troubling statement about the chain and its struggle to stay relevant. They want to overhaul the brand.
"We're just not as relevant as we once were," Cracker Barrel CEO Julie Felss Masino said on a May 16 conference call. Before the call, Cracker Barrel's stocks held at $60 per share. However after the share, they plummeted to $45.75, dropping almost 20%. Many appear alarmed by the news.
Masino took control of Cracker Barrel in August and said the brand has lost some of its shine. She said it needs a "transformation." Apparently, revenue and sales have flatlined rather than grown. Masino cites Cracker Barrel's competitors as the issue. She wants to make changes.
"[W]e are not leading in any area," Masino said. "[T]he reality is we've lost some market share, especially at dinner." Masino is introducing new menu items to the restaurants. Cracker Barrel tested both green chili cornbread and banana pudding. They are also rolling out chicken and rice, pot roast, and hashbrowns casserole shepherd's pie.
Cracker Barrel Is Making Changes
The restaurant chain plans to change its pricing as well. Cracker Barrel plans to charge more with Masino noting that prices at about 60% of its restaurants are in its lowest cost tier. She said that will change.
"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. "I want to emphasize that optimizing our price points across the menu doesn't mean just increasing prices. 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."
Meanwhile, the chain is also apparently remodeling some of itsrestaurants as well. There will be "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. "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."
