Cracker Barrel Old County Stores is intensifying its focus on value in part by adding a line of $5 take-home meals.
The deal is only available to dine-in patrons who purchase an entree off the family-dining chain’s regular menu at the full price. The same approach was used years ago by a number of casual-dining chains to attract bargain hunters and bump up check averages.
Each of the new meals consists of a protein and a side, both served cold. The idea is for customers to take the meal home and heat it there. Cracker Barrel indicated that the line currently extends to three choices: Fried chicken with mac 'n cheese, meatloaf with mac 'n cheese and grilled chicken with mashed potatoes.
Although the $5 deal was cited by executives as a prime example of Cracker Barrel’s stepped-up effort to connect with value-conscious diners, it also fits the brand’s effort to sustain a thriving to-go business. Takeout, delivery and catering accounted for 23% of sales for the second quarter ended Jan. 27, executives revealed.
Catering and third-party delivery were particularly strong during the period, traditionally Cracker Barrel’s peak quarter for off-premise sales, the officials noted.
An intensified sales effort drove up catering sales by 40%. CEO Sandy Cochran said the chain is likely to hit its goal this year of growing annual catering sales to $100 million.
Executives also noted exceptionally strong sales of Cracker Barrel’s heat-and-eat meal packages during the quarter, which encompassed Thanksgiving and Christmas. The big-ticket to-go packages consist of Cracker Barrel specialties the buyer can heat in family-sized portions and serve at the dinner table.
Chain officials acknowledged that dine-in business during Q2 still lagged the pre-pandemic level.
Overall, order counts for the quarter slipped 1.7%. Yet same-restaurant sales still rose 8.4% because prices ran about 9% above the year-ago levels, said CFO Craig Pommells. He said about half the increases came in the latter quarters of fiscal 2022.
Customers also traded up to higher-priced items, including the chain’s shareable portions of Barrel Bites finger foods and premium beverages.
Executives repeatedly stressed Cracker Barrel’s intention to emphasize value near-term, the continuation of an effort that brought positive results in Q2. They asserted the brand had a solid foundation for the effort with the regular menu’s 20 meals priced under $12.
“From a guest visitation perspective, we again saw gains with lower income guests as we believe our strong value proposition continues to appeal to this group who remain pressured by the macroeconomic environment,” said Cochran.
In addition, “we saw a moderate improvement in year-over-year visitation from guests 65 and over,” said Pommells, referring to a key portion of the Cracker Barrel brand’s constituency. But he attributed the gains to easier comparisons with results from a year ago, when visits by silver-haired patrons were thinned by fears of the coronavirus’ Omnicron variant. The chain has maintained since the start of the pandemic that some of its older patrons have been reluctant to dine out because they fear contracting COVID.
The brand has been striving to draw more traffic from younger consumers. Visits by that group remained largely unchanged during Q2 from the levels of a year ago, but officials were quick to say they expect expansion of the cohort to resume growing.
Maple Street Biscuit Co.
Little was said during Tuesday’s analyst call about Cracker Barrel’s sister concept, Maple Street Biscuit Co., an operation open only for breakfast, brunch and lunch. The only news officials aired was their plan to open 15 more units during fiscal 2023, compared with just three Cracker Barrel restaurants.
Two Maple Streets opened during Q2, one in Houston and the other in Columbus, Ohio. Both markets are new ones for the brand.
Second-quarter comp sales for Maple Street were not revealed.
As a company, Cracker Barrel posted a net profit of $30. 5 million, a decline of 19% from the prior year, on revenues of $933.9 million, up 8%.
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