Here's How Cracker Barrel Is Really Doing With Inflation Worries
It's no secret that the past few years have been a series of unprecedented events, and restaurants have had to continuously adjust to survive. Restaurants like Cracker Barrel that depend on people stopping in while they travel were especially negatively affected. In May of 2020, same-store sales dropped nearly 60% for the breakfast chain (via FSR Magazine). Then, in 2022, just when people were starting to travel nearly as much as they did pre-pandemic, gas prices skyrocketed and travel decreased once again (per Bloomberg).
Not only that, but historic levels of inflation left the notoriously budget-friendly restaurant no choice but to bump up menu prices by about 6% for the second half of 2022 (via Nation's Restaurant News). Cracker Barrel felt that its older customer base (65+) was especially dwindling due to economic and health concerns (via FSR Magazine). In order to combat this, the chain is rolling out a plan to appeal to its younger customer base and continue to combat inflation.
Despite historic inflation, investors remain confident in Cracker Barrel's success
Although many people may visit Cracker Barrel for its consistency (people freaked out when plant-based meat was added to the menu), as inflation continues to rise, the brand has decided to make some changes to ensure its success. The chain already raised menu prices by 6% earlier this year, and they expect to increase prices yet again in the next few months (via FSR Magazine). Despite this rise in menu prices, the breakfast behemoth plans to focus on customers getting a great value while catering to those looking for a slightly more upscale experience as well.
Millennials make up 30% of Cracker Barrel's customers, so the company wants to incorporate more technology into the restaurant, like Apple Pay and Google Pay, as well as premium menu items like small plates, elevated entrees, and more exciting beverage options. These upcoming changes have investors excited for what's to come, and several companies have upped their stake in the company. Stephens Inc. AR bought 13.8% more shares in the chain and JJJ Advisors Inc. "raised its position" by 265.1% (via Defense World). Although Cracker Barrel's quarterly revenue did not meet expectations, yearly revenue was up 10.8%, which is keeping investors interested.