Company anticipates a protracted journey towards restoration from negative aftermath of logo controversy
Cracker Barrel Faces Logo Backlash and Adjusts Strategy
Cracker Barrel, the popular American restaurant chain known for its homey atmosphere and Southern-style food, is facing a backlash following the unveiling of a new logo on August 19. The logo change, part of a three-year turnaround plan, has sparked social media fury, with many customers expressing their disapproval on platforms like Facebook, Twitter, and LinkedIn.
The pattern of the logo backlash was evenly spread across income cohorts, but it had a slightly heavier impact in the Southeast, excluding Florida. Interestingly, Cracker Barrel saw less of a decline among consumers over the age of 65. The logo change led to a plunge in traffic of 8%, according to the company's recent report.
In an effort to combat this fresh traffic challenge, Cracker Barrel is focusing on enhancing food and customer experience. The company will introduce menu updates, including the return of Uncle Herschel's Breakfast and Country Mornings Breakfast, along with new items. Cracker Barrel is also increasing marketing efforts, with a focus on college football and nostalgia.
Cracker Barrel's CEO since the logo reversal and chain realignment is Julie Masino. Under her leadership, the company is also implementing a new logo maker feature called Front Porch Feedback for customer feedback.
The logo change was not the only part of Cracker Barrel's transformation plan. The company acquired Maple Street Biscuit Co. in 2019 with plans to grow the brand. However, many of the underperforming Maple Street locations have already been shuttered, and Cracker Barrel expects to close 14 more this fiscal year.
Despite the challenges, Cracker Barrel's same-store sales rose 5.4% for the quarter ended Aug. 1, including a 5.4% price increase and a 1% increase in menu mix. This marks Cracker Barrel's fifth consecutive quarter of positive same-store sales.
However, the fallout from the logo change is anticipated to be far-reaching, and Cracker Barrel is forecasting a same-store traffic decline of 4% to 7% for the full fiscal year. The company also announced that it will end up spending far less than the initial $600 million to $700 million budgeted for the transformation effort.
Cracker Barrel's stock tumbled by more than 9% in after hours trading after the dim outlook was announced. Despite the challenges, the company remains committed to its turnaround plan and improving the customer experience.
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