Cracker Barrel Is Struggling

Alpha8472
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Cracker Barrel Is Struggling

Post by Alpha8472 »

Prices went up, but profits could not keep up due to commodities costs.

https://www.nrn.com/finance/cracker-bar ... on-culprit
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Re: Cracker Barrel Is Struggling

Post by pseudo3d »

Their main gimmick is that almost every restaurant is located near a freeway of some sort (but also in an existing commercial area, so there's likely a Walmart or Target not far away); somewhere in my collection I have a United States map with the Cracker Barrel restaurants pointed out.

Maybe they can lean into the store portion a bit more to create more of a modern "travel plaza" (gas, clean restrooms, etc.) while keeping the restaurant portion. I mean, Denny's often co-locates with truck stops.
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Re: Cracker Barrel Is Struggling

Post by jamcool »

Cracker Barrel used to sell gas when the chain started.
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Re: Cracker Barrel Is Struggling

Post by buckguy »

By itself, this isn't very informative. One quarter represents nothing but that quarter and isn't a trend.

I went back and looked at how they were doing pre-COVID in 2019 and 2018 to get a better idea of how they've done and one constant was declining profit, so they may have a long-term problem with costs above and beyond recent increases in commodities. They also seem to have had pretty stagnant same store sales in the past and in the report linked here, their increase was less than the rate of inflation. They have characterized the stagnant same store sales as better than their sector--which is plausible when you consider that places like Panera and Applebees truly seem to be struggling, but not a good thing for them over the long run.

This should have been a banner year for them given the uptick in travel, but hotels have been able to hold the line on prices into the fall and people may be economizing on food, which is pretty easy to do. I rarely stop at fast food or fast casual places on road trips. Gas prices were falling in October, so they couldn't blame a weak month on that.
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Re: Cracker Barrel Is Struggling

Post by arizonaguy »

I think the problems are demographics related.

I rarely see anyone under the age of 35 in a Cracker Barrell (unless it's a multi-generational family). The younger generations simply do not like the Cracker Barrell, Denny's, Applebee's offering.
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Re: Cracker Barrel Is Struggling

Post by Super S »

arizonaguy wrote: December 3rd, 2022, 3:04 pm I think the problems are demographics related.

I rarely see anyone under the age of 35 in a Cracker Barrell (unless it's a multi-generational family). The younger generations simply do not like the Cracker Barrell, Denny's, Applebee's offering.
A lot of people are also turned off by restaurants that really push the gift shop atmosphere as you enter/exit the restaurant. I recently visited a Mo's Seafood restaurant in Astoria and they have the waiting area pretty much surrounded by gift shop merchandise....while noticing quite a few empty tables they still had a 15-20 minute wait even though the restaurant was not particularly busy (I ended up just leaving). I sometimes wonder if they delay seating people on purpose to see if they will buy something in the gift shops. This is something I have noticed at times with other chains and local operators that use similar formats. Locals aren't interested in the gift shops for the most part.

Applebee's, Denny's, etc. truly varies by area. They are actually quite popular with younger crowds in smaller towns they operate in. Well-run locations are also popular with locals.

Cracker Barrel's format is not really suitable for larger cities, evidenced by how locations such as Jantzen Beach have closed. It would not surprise me if shoplifting was a factor, and with the way this seems rampant throughout the Portland area, I have to wonder about the future of the Beaverton and Tualatin locations.

I think many traditional restaurants around Jantzen Beach and Delta Park are struggling though. Elmer's closed their Delta Park location, and the Shari's there (a chain known for breakfast) actually has a relatively late morning opening, something like 8 or 9 AM if I recall. It doesn't help that traffic during peak commutes is VERY congested in this area.
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Re: Cracker Barrel Is Struggling

Post by storewanderer »

Cracker Barrel probably needs to stay in the middle of the US/South, primarily medium sized markets at that, where consumers are more used to bland meat and potato type food. Or "comfort food" as it is called. They used to perform rather strongly (compared to a Denny's or IHOP) at the dinner period, but I am not clear if that is the case anymore. They seem to be regarded primarily for breakfast at this point in time.

But it is going to be tougher and tougher. There are too many independent restaurants that consumers find more interesting.

Restaurants are a concept that really has a lifespan. Cracker Barrel trying to expand into new territories is sort of a hail mary of sorts, hoping they can stay viable and not run out of life. I think we can all agree the issue up in Jantzen Beach may have been out of their control and there will always be a bad real estate selection or two when you do an expansion.
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Re: Cracker Barrel Is Struggling

Post by BillyGr »

storewanderer wrote: December 4th, 2022, 9:19 pm Cracker Barrel probably needs to stay in the middle of the US/South, primarily medium sized markets at that, where consumers are more used to bland meat and potato type food. Or "comfort food" as it is called. They used to perform rather strongly (compared to a Denny's or IHOP) at the dinner period, but I am not clear if that is the case anymore. They seem to be regarded primarily for breakfast at this point in time.

But it is going to be tougher and tougher. There are too many independent restaurants that consumers find more interesting.

Restaurants are a concept that really has a lifespan. Cracker Barrel trying to expand into new territories is sort of a hail mary of sorts, hoping they can stay viable and not run out of life. I think we can all agree the issue up in Jantzen Beach may have been out of their control and there will always be a bad real estate selection or two when you do an expansion.
One other issue (at least on the non-breakfast times) is that they have cut back on things that they offer, among them some of the things that are not commonly found in other restaurants (at least not here in NY, since they do stick to that Southern theme).
That may give some one less reason to go there vs. someplace else, if they can no longer get a favorite item that was unique (or more unique) to that particular brand in a given area.
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Re: Cracker Barrel Is Struggling

Post by buckguy »

They really should be doing better in their core areas, given the decline of Bob Evans, which has a similar menu and has a lot of geographic overlap. The cafeteria chains in the South, which tend to overlap in clientele and menu, also have steadily declined and should have offered another opportunity. Even with their older customers, etc. the decline of their competition should be enabling them to show more growth.

Despite opening in California and Oregon, they've mostly gone into places like Bakersfield or second ring suburbs (Portland) where they should succeed. Outside of the South, they usually stick to outer suburban rings or satellite towns rather than true "big city" locations and even in the South they don't go far "into town" unless it's near a major interstate junction. They've been opening very few stores per year, even pre-COVID and their attention recently has been on their biscuit chain which seems like a response to the success of Tudor's Biscuit World, a West Virginia-based chain (that includes franchising) with a strong following. Interestingly, they've stayed out of Tudor's territory until recently and Tudor's expansion has mostly been more northerly and away from Cracker Barrel's Maple Street chain.
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Re: Cracker Barrel Is Struggling

Post by storewanderer »

buckguy wrote: December 5th, 2022, 2:59 pm They really should be doing better in their core areas, given the decline of Bob Evans, which has a similar menu and has a lot of geographic overlap. The cafeteria chains in the South, which tend to overlap in clientele and menu, also have steadily declined and should have offered another opportunity. Even with their older customers, etc. the decline of their competition should be enabling them to show more growth.

Despite opening in California and Oregon, they've mostly gone into places like Bakersfield or second ring suburbs (Portland) where they should succeed. Outside of the South, they usually stick to outer suburban rings or satellite towns rather than true "big city" locations and even in the South they don't go far "into town" unless it's near a major interstate junction. They've been opening very few stores per year, even pre-COVID and their attention recently has been on their biscuit chain which seems like a response to the success of Tudor's Biscuit World, a West Virginia-based chain (that includes franchising) with a strong following. Interestingly, they've stayed out of Tudor's territory until recently and Tudor's expansion has mostly been more northerly and away from Cracker Barrel's Maple Street chain.
Portland has TONS of great local places. Cracker Barrel is not the right place for Portland.

Maybe Spokane or Klamath Falls... would work.
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