The Real Reason Cracker Barrel Just Raised Their Prices
If you've been to a Cracker Barrel restaurant recently, you may have noticed your pecan pancakes or chicken n' dumplings are slightly pricier than usual. We promise you're not imagining things. According to Eat This, Not That!, the chain recently announced it had quietly begun implementing a 3% price increase across its menu at all locations. Allegedly, the reason for this isn't merely to make up for rising food prices (though meat costs are predicted to double this year) but rather, to cover an increase in labor costs. Given the current state of the restaurant industry, this news shouldn't come as a huge surprise to most. Over the past few months, many companies have reportedly struggled to attract and retain workers due to the unsustainable wages, long hours, and physically demanding work common in the industry (via Grub Street). At the same time, with many parts of the world reopening for indoor dining, the demand for restaurant service has increased. As a result, many companies have shifted toward increasing their base wages and offering additional benefits to ensure they have enough staff. One McDonald's location even went as far as to pay people to interview with them.
Currently, Cracker Barrel employs approximately 70,000 people across more than 40 different states, per the company website. Based on Payscale reports, the average starting wages range from $6.44 to $14 dollars per hour, depending on location. For reference, the federal minimum wage is currently $7.25 per hour. Though there's been no official statement as to how much the company plans to raise its wages, 2.8% of that 3% menu price increase is already in full effect (via Bloomberg).
With the price increase, Cracker Barrel hopes to do more for customers and employees
Though the price increase may be frustrating for some Cracker Barrel fans, the company seems determined to do everything possible to make it worth it for its customers. In June, the brand launched their Care It Forward initiative, a campaign with the goal to ease the anxieties of returning to a newly reopened world, all while "inspiring conversations of care" (via FSR Magazine). As part of the program, Cracker Barrel restaurant locations around the country are hosting live music performances (via Instagram), while also sharing positive messages on its social media channels. On top of that, last month the chained surprised some guests by giving them multiple $25 gift cards — one to use for their own meal, and one to use for hopefully "paying it forward" for another table if they wanted. As FSR Magazine reports, the chain says it will continue to offer guests these perks all summer.
As for the staff, it seems Cracker Barrel plans to do more to improve its employee experience overall; not just through base wages. Per the Wall Street Journal, the company says it plans to invest this year in better POS technology in their restaurants, including adopting electronic pay systems for their tables. The hope is this will improve efficiency for wait staff, therefore allowing them to turn more tables and earn more money per shift.
Cracker Barrel isn't the only company raising its prices
While it's commendable that Cracker Barrel is taking the initiative to pay its employees more and increase company morale, it's likely the new spike in prices will cause some raised eyebrows. For one, the restaurant chain recently denounced rumors that it was closing its doors for good by claiming it was doing as well now as it was pre-pandemic, which may lead some to question why there would be a need for more revenue to adequately compensate employees.
Moreover, it's worth noting that Cracker Barrel isn't the first company to shift the blame for price increases on the demand for higher wages. Earlier this year, The New York Times reported that Chipotle executives attributed the 3 to 4% price hike on their burritos and bowls to accommodate demands for a $15 per hour minimum for its employees. The comments sparked a lot of controversy, with many members of the public (via Twitter) and journalists (via Refinery29) calling out the company for shifting the cost burden onto consumers while the CEO raked in a multi-million dollar raise for themselves. Given that only 50% of Cracker Barrel employees believe they are adequately compensated for their labor, per Indeed, and the fact that CEO Sandra B. Cochran rakes in a $7 million dollar salary according to estimates from Salary.com, it's likely this news will lead to similar discussions among customers.