Cracker Barrel Old Country Store, Inc. takes a three-pronged approach in its long-term strategy to improve sales and traffic: enhance the core, expand the footprint and extend the brand.
Sandy Cochran, president and chief executive officer, outlined the Lebanon, Tenn.-based restaurant chain’s growth strategies during a Jan. 13 presentation at the Integrated Corporate Relations XChange in Orlando.
Menu development and marketing lie at the heart of core enhancement efforts, led by last year’s roll-out of a better-for-you menu and a recent move to national cable television.
The long-term initiative of the Wholesome Fixin’s menu, which features 10 meals under 600 calories, was designed to “help us change the perception of the menu, which we believe will allow us to expand the number of occasions which we’ll be considered for, as well as the … guests and the demographic that we’ll be perceived for,” Ms. Cochran told investors. “This is a particularly important category for our female guests and the millennial group.”
Emphasizing value has become another priority for the company, which recently began highlighting its daily lunch specials last year.
“We intentionally focused on lunch to begin with,” she said. “We thought that was the battleground. We thought $5.99 was where we needed to be, and we thought that would have a halo effect on dinner.”
Cracker Barrel also began promoting its Country Dinner Plates, each one including a choice of protein and two sides for $7.69.
“And that’s resonated,” Ms. Cochran said. “So, I think that while we have also focused on the better-for-you category, we haven’t taken our eye off of the need right now that consumers have to be sure that they can find value.”
New marketing efforts have been “very successful” in driving traffic and delivering the company’s core message, Ms. Cochran added.
“We have recently begun using national cable T.V. to run spots… and those have been very successful according to the research we’ve done in accomplishing what we wanted, which is reminding consumers about the brand attributes that they love,” she said. “So, traditional, homemade, high-quality and friendly, warm, those sort of attributes.”
Additionally, Cracker Barrel has evolved its store prototype to increase new unit profitability.
“We’ve overhauled our labor system, we’ve overhauled our production planning system, we’ve introduced a transportation management system, we’ve installed a merchandise planning system, we're installing an allocation and replenishment system,” Ms. Cochran said. “We've upgraded our e-commerce engine, we've significantly changed our employee communications tools. So we are using technology in a variety of ways -- guest-facing, employee-facing and back of the house, to do a number of things -- improve productivity, drive traffic, and improve sort of your guest and employee experience.”
Finally, as part of efforts to extend the brand beyond its restaurants, Cracker Barrel in October launched retail products, including hams, lunch meat and bacon, through its licensing agreement with John Morrell Food Group, a subsidiary of Smithfield Foods.
“Our mark CB Old Country Store is currently in over 12,000 retail locations,” Ms. Cochran said.
Comparable restaurant sales increased 2.5% in November but dipped 2.7% in December, reflecting negative impacts of inclement weather that may have hindered holiday travelers, a key part of the chain’s customer base during the season.