Cracker Barrel Old Country Store is using the reopening of its dining rooms to move forward with initiatives that were under development long before the coronavirus pandemic, including the rollout of a new menu and a sales test of alcoholic beverages.
The retro-themed full-service chain is also developing what it calls a digital store where patrons can shop for Cracker Barrel’s food and retail items, and is planning to open 15 units of Maple Street Biscuit Co., its small sister chain.
The moves come after a third quarter in which the all-company-operated chain lost $162 million, compared with a year-ago net profit of $50.4 million. Revenues fell 41.5%, to $432.5 million. Same-store restaurant sales for the week ended May 29 were down 45%, and gift shop sales were down 38%.
Still, said CFO Jill Golder, “Investing in Cracker Barrel will remain a capital allocation priority. Although we are focused on cash conservation in the near term, we will be making prudent investments in our menu evolution initiative, our beer and wine program, our digital strategy and our point-of-sale system.”
Golder said 505 Cracker Barrel units have resumed dining-room operations and that the other 159 branches are expected to offer sit-down service again by the end of June. All 664 units have remained open through the pandemic and are generating a positive cash flow, she added.
Seventy percent of furloughed employees have returned to work, said CEO Sandy Cochran.
But “it will likely be some time” before all social-distancing restrictions are lifted and stores can return to full operation, said Golder.
When they do, the stores will feature a smaller and simpler-to-execute menu than the lineup used before the pandemic. “It better highlights our signature offerings and abundance, value and variety,” said Cochrane.
Featured new items include a revamped chicken pot pie and Saturday Fried Pork Chops.
A menu of alcoholic beverages is currently being tested in 20 units within Florida. Included are popular beers, wines, a hard cider and two types of mimosas, orange and strawberry. Cochrane said of the mixed drinks, “It was surprising to me how popular they are.”
Neither she nor Golder provided details of the digital store.
As social-distancing restrictions are limited, Cracker Barrel is likely to face challenges and opportunities unique to the brand, the executives said.
For instance, “The geographic concentration of our stores has not been in parts of the country that were most impacted,” said Golder. In addition, “our interstate locations position us well in the event that families choose to take vacations by car this summer.”
But, she added, “our older guests may be more hesitant to return because they are at higher risk for COVID-19.”
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