Cracker Barrel Is Stuck in a Generation Gap
It isn’t a good sign when a restaurant chain’s investors ask management about the effect of Social Security checks on its future prospects. Cracker Barrel Old Country Store has long thrived on its unique formula and down-home charm. For example, it proudly touts not only how many biscuits, eggs and strips of bacon it sells but also the number of rocking chairs and wooden puzzles—around 70,000 and 300,000 a year, respectively.
With about 43% of its guests 55 or older and a substantial portion of revenue coming from the sale of tchotchkes in its attached retail stores, tweaking that formula to get with the times has been a delicate matter. The strains have started to show, as full-year results released Wednesday illustrate. Revenue for the fourth quarter barely grew and sharply lagged behind menu and wage inflation.
Comparable-store sales in the company’s retail stores fell by a disappointing 6.8% with comparable-restaurant sales offsetting that with 2.4% growth. Cracker Barrel shares have lost nearly a third of their value over the past six months even as casual-dining giant Darden Restaurants, the parent of Olive Garden, has appreciated more than 6%. There have been tweaks to Cracker Barrel’s formula such as the introduction of alcoholic beverages, a loyalty program and QR codes that allow customers to pay at the table.
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