Julie Masino, CEO of Cracker Barrel Old Country Store, has a request of Wall Street that it’s notoriously loath to oblige: Have some patience.
“We’re at the start of a three-year journey,” she says of the 55-year-old retro-themed chain’s rejuvenation efforts. The company has just reported its fourth quarter, with a few green shoots already showing, but “it’s actually Quarter One on the roadmap,” the CEO told Restaurant Business.
“We just completed our first stage of analysis and are now moving into the testing phase,” she’d told financial analysts a few hours earlier during a conference call focused on the quarterly results. The message hammered home repeatedly was that management wasn’t looking at a few tweaks that could be crossed off the to-do list by Tuesday.
Before updating Cracker Barrel’s guidance, CFO Craig Pommells reminded the analysts, “Remember, we look at 2025 as an investment year.”
Those investments extend to re-doing parking lots, keeping a steady stream of Cracker Barrel-type menu items in the development pipeline, updating the exterior and interior looks of the concept, and continuing to simplify operations and crewmember functions.
Those endeavors will eat up fiscal 2025, or what Pommells termed “a year of testing,” with the big payoffs expected in the back half of fiscal 2026. That’s when the slew of changes being tried will come together into a brand that continues to woo its raving fans while drawing more of that base’s children and grandchildren.
The chain intends to get a preview with a 12-unit test commencing in Indianapolis. The stores will meld the operational adjustments the chain has engineered to operate more efficiently with the visual elements that have been tried simultaneously but elsewhere. That trial will extend to such features as the uniforms worn by staff as well as the look and contents of the menu.
“We’re even thinking of jobs differently,” says Masino.
Part of the challenge is reinvigorating the concept without alienating the die-hard fans who’ve filled its tables for five decades. That means, says the CEO, asking questions like, “Is it consistent? Does the quality come through?”
She noted that much of the concept hadn’t changed in the last 20 years because it didn’t have to; the brand has long ranked as a frontrunner in family dining.
That catch-up effort extends beyond the test in Indianapolis. Systemwide, Cracker Barrel is revamping its pricing store by store, factoring in today’s costs and the brand’s competitive set. The brand views itself as being part of casual dining, not the traditional family-dining sector populated by the likes of Denny’s or Friendly’s. And that, the executives stressed, leaves plenty of leeway to help margins.
“Our average check is in the mid-14s,” said Pommell. “Casual dining’s check average is in the $26 range. If you take out the steak people, it’s in the $23 range.”
That translates to under-pricing the competition by at least 8%, Masino noted.
As part of the systemwide localization of pricing, 150 stores have raised their menu charges without scaring away patrons, the executives reported. Yet, to hammer home Cracker Barrel’s traditional value advantages, the prices of 70 stores were released.
Masino stressed during the analysts’ call and the interview with RB that value is Cracker Barrel’s superpower. The chain is striving to amp up that advantage with lures like a $7.99 breakfast platter featuring two pancakes, two eggs and a choice of either bacon or sausage.
It’s also found success, according to the officials, with bargain-priced early-bird specials and a roster of daily deals.
Research revealed that patrons think of value not only in terms of price but as a function of “the amount of food and the abundance of food they receive at Cracker Barrel,” Masino told analysts. “When you leave Cracker Barrel, you’re not leaving hungry.”
Simultaneously, Cracker Barrel is addressing the other end of the barbell with improved products and new selections. The steak featured in premium-priced options like the New York Strip Steak N’ Eggs has been upgraded, for instance. It sells for $19.99 in Connecticut.
A gangbusters hit has been the Hash Brown Casserole Shepherd’s Pie, says Masino, who describes the dish as “phenomenal” taste-wise. It sells for $17.99 in the New England area.
In earlier calls with financial analysts, she’d cited the new item as an example of something that’s new and different for the Cracker Barrel brand yet consistent with its reputation for scratch-cooked, homestyle fare. Maintaining a steady stream of similarly appropriate additions will be a high priority, the CEO stressed.
Headquarters story time
The Cracker Barrel test kitchen isn’t the only part of chain headquarters whose mission has been updated. The concept recently hired Sarah Moore, a major-league marketing veteran from outside the industry, to serve as CMO. Moore’s prime responsibility, according to Masino, is to “increase brand love.”
“She does have a big job,” Masino said during the interview with RB. “What I’m excited for her to do more than anything is to tell our stories. This brand has authentic roots, it has stories, it has things it cherishes.”
Yet that lore is not well known. Masino cited a recent media story that disparaged Cracker Barrel’s tables as cheap rounds of plywood. In reality, she said, each one is crafted by an Amish family of woodworkers, a longstanding part of the company’s history.
Similarly, a customer ordering pancakes is provided with an individual bottle of warm, true maple syrup. Only current guests may be aware of that touch.
One channel for delivering on that mission is Cracker Barrel’s loyalty app. The general store-themed concept was late to the game in that respect; it didn’t have a guest-affinity program until just a year ago. Yet 6 million consumers have already enrolled. And that, says Masino, has provided Cracker Barrel with another lever for boosting traffic and sales.
“They visit us 50% more often, and their average check is 10% higher,” she told analysts.
They also tend to spend 40% more than nonmembers in the retail component of Cracker Barrel stores, a section that’s been more trying than the dining rooms. Same-store restaurant sales for the fourth quarter rose 0.4%, while comparable retail sales fell 4.2%.
Retail operations have been a drag on Cracker Barrel’s sales for some time, but the slew of testing and experimentation underway does not extend to trial of a restaurant-only version of the retail-dining hybrid.
“We’re not looking at that,” says Masino. “The retail experience is so integral to what we do at Cracker Barrel.” The gift-shop-like section also generates about 18% of sales.
$700 million of changes
The rejuvenation effort, which led off with extensive research, carries a price tag of roughly $700 million, or about 80% of the company’s revenues for the fourth quarter. “I’d say we’re a little bit ahead with what we’ve put in place,” says Masino.
Traffic is still the challenge. Although comparable sales rose during the most recent quarter, guest counts fell 4%.
The company’s struggles has prompted maverick shareholder and longtime gadfly Sardar Biglari to mount yet another attempt to wrest control of the company away from Masino and her team. He’s nominated himself and four allies for half the seats on Cracker Barrel’s 10-person board. The company has urged shareholders to rebuff the attempt, noting that investors need to allow the turnaround initiatives underway to deliver as expected.
What about Maple Street?
Next to airing growth projections, Masino and her team said nothing in reporting fourth-quarter results about the company’s other concept, the breakfast-and-lunch venture Maple Street Biscuit Co. Is the rollout of that 66-unit upstart brand on hold until Cracker Barrel is fixed?
Not at all, says Masino. “We love Maple Street, but we've got a leadership team over there that’s highly capable.” Plus, she notes, Cracker Barrel accounts for 98% of the company’s revenues.
“I’ve done a few of these in my career,” she says of that brand’s turnaround. Before she joined Cracker Barrel, Masino was president of Taco Bell International. She also logged time at Mattel, the parent of heritage brands like Barbie and Hot Wheels.
But her new charge’s situation is unique, given how long it’s been since Cracker Barrel has been given a soup-to-nuts revamp.
“It’s not so much understanding the need for change,” she says of a change in the mindset. “This is a team that’s used to winning. But we’re not there right now.”