How Cracker Barrel saved itself

The popular U.S. restaurant chain Cracker Barrel has abandoned its plan to adopt a new logo following backlash from customers and U.S. President Trump.

Cracker Barrel CEO Julie Felss Masino said six months ago that she thought she was “fired by America” following a bungled revamp. Today, she could be on the path to forgiveness.

The chain’s focus on getting back to its roots, doubling down on Southern-inspired comfort food and Americana-themed tchotchkes, appears to be resonating. Cracker Barrel reported better-than-expected revenue in its most recent quarter, and it even raised its outlook for the year.

Plus, shares are up a staggering 100 per cent for the year.

Masino recently told analysts that she wanted to ensure customers “that we are still the Cracker Barrel they know and love.”

It’s a notable turnaround from last year, when Cracker Barrel’s plans for modernization inadvertently thrust the company into a broader culture war.

Last summer, Masino unveiled an updated logo and restaurant design that swapped its signature dark woods for a lighter aesthetic and ditched the souvenir-lined walls, part of a US$700 million transformation plan to bring back customers to the 56-year-old chain.

The stock slumped, and foot traffic and revenue nosedived. Shares tanked by as much 12 per cent, and U.S. President Donald Trump chimed in on the change. The company reversed course.

Some critics hated that Cracker Barrel dumped the famous “old timer” character that had been used since 1977, seeing it as a sign that Masino had gutted the brand’s folksiness and gone woke.

“It’s really difficult to be at the helm of a brand that has the kind of legacy and reputation that Cracker Barrel does, because that’s powerful,” said Robert Byrne, senior director of consumer research for Technomic. “When you try to effect changes – in attempts to modernize the brand in one way or another — that’s a thorny issue for a lot of consumers.”

Masino largely kept quiet after the blowup, speaking only on earnings calls, at a conference and during a lengthy November interview with conservative radio host Glenn Beck.

“What we didn’t see in the data was the way that people see themselves in the logo,” she told Beck. “When the ‘old timer’ and when the barrel were gone, it was like we had taken them out of it and that we weren’t valuing what they valued.”

What’s changed?

The roadside staple needed to attract new customers, especially younger ones, after years of sagging sales. The chain wanted to avoid tumbling into bankruptcy like Red Lobster, Hooters, TGI Fridays and so many other family dining chains.

Masino shifted from aesthetic changes to focusing the chain’s menu on what customers wanted. That included adding value meals priced under US$10 and foods like country ham, fried catfish, carrot cake and foil-wrapped Campfire Meals.

She also fired the marketing agency behind the redesigned logo and brought back a former executive who had overseen menu strategy once before.

The CEO also invested in the company’s loyalty program, which offers deals and allows members to give feedback. That program has grown to nearly 12 million members, who now account for more than 40 per cent of sales.

The gift shops also got a refresh with American-themed merchandise ahead of the nation’s 250th anniversary, a move Masino described as “proudly celebrating America and patriotism.”

The changes are “paying off,” according to R.J. Hottovy, head of analytical research at data analytics firm Placer.ai.

“The limited-time offerings and value-focused pricing align with what restaurant consumers want in today’s macroeconomic environment, while the returning favorites help rekindle customers’ nostalgia for the brand,” he told CNN.

Visits, however, remain a sore spot. Cracker Barrel said that traffic fell 6.7 per cent during the most recent quarter. However, Chief Financial Officer Craig Pommells said on the earnings call that was a “gradual improvement” from the past and that the company was “encouraged” by the trend.

Cracker Barrel’s traffic decline mirrors rivals, and Hottovy said the “trends suggest the brand has put the right strategies in place.”

Technomic’s data shows that Cracker Barrel is seeing significant increases in several metrics, including service, food and cleanliness, as well as “notably higher scores for value and order accuracy,” Byrne said.

All of Cracker Barrel’s changes signals to Byrne there are better days ahead.

“With the recent focus on fundamentals and a renewed commitment to the brand’s unique and authentic history, there is a lot for loyal guests to be excited about and for new guests to enjoy,” he said.

Masino is also optimistic, telling analysts that the company is “pleased with the progress that we have been making around holding on to our core guests.”