Don’t forget the increase in both employee wages and raw ingredients as food prices rise. I’m certain those two don’t account for all of the drop in profits but they, too, are factors.
I thought Trump was a loyal McDonald’s fan, with a side of KFC from time to time. Has Trump ever eaten at Cracker Barrel?
My take is that you have economic aristocracy attempting to profit off the economic peasants. The money elite have no clue about what their lower-down customers actually do or don’t like about the business the elite own/run and the serfs patronize. Heaven forbid they actually ask their most loyal customers their opinions, oh no! Those uneducated proles haven’t a clue what they actually like or don’t like, their betters know that! So they make changes that appeal to the upper crust and are puzzled, clueless, and confounded when the customers don’t agree and don’t go along with profits, profits profits! for the shareholders.
I suspect Cracker Barrel fans want a consistent and reliable menu and food served in surroundings they find familiar. They aren’t interested in change or “updates”.
Rather than abrupt and distinct changes if they have to “update” stuff they need to introduce small changes over time. Take down just a bit of the cluttered decor. Repaint walls a slightly lighter color. Three years later another shade lighter. Do this over many years, not all the stores in a two year period. Make the changes in the CB stores closest to urban/high population areas first. If you’re adding anything with vegetables to the menu make it clear you’re NOT taking the old options away. And you still might have to backtrack. People aren’t going to CB for “heart-healthy meals”.
Think evolution, not abrupt make-over (even though I’m sure many CB customers don’t believe in evolution).
Fact is, the past few years since 2020 have been pretty rough for any business outside of making N95 masks and hand sanitizer. Being in the black at all is an accomplishment. Penalizing a CEO who does that because he wasn’t able to maintain profits at the same level as in 2018 is foolish greed. Hiring another CEO to make abrupt changes to “modernize” a business that is selling in no small part nostalgia just shows out out of touch with reality the board of directors actually is.
IMO if the CB corporation wanted to future-proof themselves against the slow-motion demographic disaster awaiting them, they’d have done far better to introduce a completely different restaurant concept. One with nothing in common with current Cracker Barrel restaurants except the corporate ownership. Heck make it a wholly owned subsidiary so it’s easy to sell later. Or easy to kill off CB and keep going as the subsidiary once that’s obviously the better choice.
And don’t call attention to the fact it’s even connected to CB-corp. Sure, the manager level people in the national chain food industry and their suppliers would know that RoadsideTrendy® ™ restaurants have common ownership with Cracker Barrel. But Ma and Pa Middle America who want their mashed potatoes with sawmill gravy? They have no need to be told, or to know.
That might have worked. A problem with Wall Street being in charge of everything is they want results now. Which leads to hastily decided and hastily implemented major, not incremental, changes. Whether that saves or blows up the brand doesn’t much matter to Wall Street, since they’ll have moved to trade profitably on the outcome within milliseconds of it becoming apparent which way that wind is blowing.
Having worked in advertising and marketing for 36 years, and having worked on a number of products and brands which have a middle-to-lower class target audience, I’ve often seen a disconnect between the people who work in management and marketing on those brands – well-educated, often from upper-middle-class to wealthy backgrounds – and their targets.
In some cases, I’ve seen actual disdain among the marketers at those brands for their consumers: their consumers are extremely different from themselves (the marketers) and their personal backgrounds, so they don’t understand their consumers, they don’t like their consumers, and they don’t really even much like the product that they work on. Note that a skilled marketer or advertiser is willing and able to work to build understanding and empathy with a consumer base who isn’t “like them,” and effectively champion a product that they don’t personally like, but I’ve worked with a whole lot of people – including at major companies – who simply aren’t actually great at their jobs.
It’s possible – though I have no direct evidence for it in this case – that some of senior management at Cracker Barrel wishes that their restaurant was more like a place that they, themselves, would actually willingly visit, and are willfully choosing to change it away from what their actual consumers want; I’ve seen this happen during my career.
It’s also possible that, even though Cracker Barrel has a very loyal consumer base, CB’s market research and projections indicate that that loyal base isn’t sufficient to fuel the kind of profit growth that management, and investors, demand.
If you’re selling stuff you’re an idiot if you don’t listen to your customers. Do something to piss them off they’ll leave and then you’ll be out of business.
I go into a long rant about the difference between an entrepreneur, someone who owns and runs a business, a CEO hired to primarily make money for the owners/investors, and being one of those stockholders/investors who really don’t give a damn about the business, they just want money, but I just don’t have the ambition to do that today.
Hypothetically, yes, but owners and management who disregard their customers’ opinions and preferences run the serious risk of not having a job, or a customer base, as time goes on. Either that, or they’re just looting the company of its resources, and not caring if they leave behind a desiccated corpse when they’re done (see Eddie Lampert and Sears/Kmart).
IMO, we’re in an era in which investors have an outsized influence on corporate decisions, leading to businesses which are being run largely to deliver short-term results, and making sure that they deliver good financial results today. That often comes at the expense of good customer service, and building a company which is going to endure. Three to five years down the road, senior management will have moved on to other jobs, and they don’t care.
I think the problem is that they ask too much. Every transaction everywhere now comes with a survey attached. The problem is they’re not really, truly interested in the answers. They use the results as metric to measure the performance of the store or employee, and not as a clue to what the customer actually cares about.
This is the logo they should have used. If they managed to spin it right, they could appeal to both goth and metal teens, and those nostalgic for their goth or metal teen life.
To continue my rant, if they want to increase their business, they don’t need to listen to customers, they need to listen to people who are NOT customers. But like hell I’m going to answer a survey on my receipt at Olive Garden that asks “why didn’t you eat at Cracker Barrel?”
I always assume that rebranding is just an exercise for some VP or C-suite executive to put on their resume. It’s expensive, it seems like a big deal to people in the company that are swimming in the brand, and absolute best gets a slight nod from consumers, but is most likely a big nothing burger. Always the risk of going viral in a bad way, but that’s why you hire an outside agency that can be blamed.
Unless your a baby bell or cable company, then you have to rebrand completely every 10-15 years, because local monopolies and terrible service means you’ve alienated the entire market. Maybe people who hated USWest will be happy to buy from Lumen Technologies.
It’s the balance that every company needs to strike, between keeping your current customers, and continually bringing in new customers. Focusing too much – or exclusively – on one, or the other, is a recipe for going out of business; it’s just a matter of how long it’ll take.
I can guarantee you that Cracker Barrel conducts extensive market research – above and beyond those silly “how did we do” post-visit surveys – among both their current user base, as well as those who don’t regularly visit, to understand why they visit, and why they don’t.
Not just investors, but that curious subtribe of the Levites called “Wall Street Analysts” who decide — irrespective of a company’s actual profitability — what a company should be making. And the market is so conditioned to follow their pronouncements that it will punish a company that isn’t performing up to snuff.
Sorry, this is a sore point with me: I lost a job because the company I worked for didn’t meet expectations, so it shed divisions and backoffice staff.
We all know of a dirty gross poorly run franchise near our house. That business isn’t necessarily failing so much as they are selling out the others and ‘cashing out’ on the reputation of the entire franchise. Obviously that has been allowed so what that tells me is the Share Holders are also making moves at the highest level to do this as well.
All of this is good, us little guys with new food and ideas can sprout between the cracks of obnoxious greed and tired menus.
Not so good for CB apparently, but that’s on the decision makers.
Almost undoubtedly. The questions, when it comes to market research being actually useful and valid, are:
Who did you test it among?
Exactly what questions did you ask? It’s very possible to skew the results of your research by asking questions in a biased way.
Did you (senior management) use the research to actually guide your decision, or to validate a decision which you had already made?
In other words: even if they conducted research, did they do it well, did they truly listen to what their core user base had to say about it, and did they actually use the results?
And, obviously, they underestimated the possibility of a social-media backlash to the change.
As a retired marketer myself, I think this is closest to the truth. The great god of demographics is decidedly NOT on the side of the current Cracker Barrel customer base and draws further away each year.
Market research - and by that I mean really good, statistically sound market research - is incredibly expensive, and even then can lead to spectacularly wrong conclusions (New Coke, anyone?) Asking current customers for input often results in familiarity bias (I like it, so don’t change anything!), while asking non-customers often ends up with a bunch of findings that would turn the product into a copy of the competition.
In the end, you call in a consultant, and after eliminating all the things they recommend that corporate management believes are impractical or too expensive, you end up with freshening the decor and other minor changes, or cheapening the product and cutting the service to try to boost the bottom line.
If I were Cracker Barrel, I’d get out of major metropolitan areas and focus on smaller markets that don’t really have “good” restaurants. I’d focus on families and retirees and push the whole idea of “going out for Sunday dinner.” It wouldn’t be a spectacular financial success, but I think it would be a sustainable business model.
Absolutely agreed. New Coke was a debacle which I studied in real time in 1985, when I was taking a summer-school marketing class. Coca-Cola did a metric crap-ton of market research, but the various post-mortems identified several issues:
They were largely relying on blind taste tests, rather than branded testing (i.e., telling people “this is Coca-Cola you’re tasting”)
They focused on driving preference over “original” Coke among non-users, and didn’t look closely enough at how their current core users would react
Senior management had already made up their mind that a reformulation, to directly take on Pepsi, was what they needed
And, yes, good, sound market research is expensive, but when you’re a very large company like Cracker Barrel (revenues of $3.5 billion, profits of $40 million), it’s a function which you can afford to spend on, to ensure that you aren’t making decisions based on GIGO research.
