One would think deaths from food-borne illness are at an all-time low today, but that's not the case. The food industry's health and safety standards still have a long way to go. Here are some cautionary tales from the not-so-distant past.
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00:00For decades, Cracker Barrel has been home away from home for millions of diners,
00:04but now they're in trouble, and they're about to change the whole design of the restaurant,
00:08like it or not. Since the pandemic, consumers are tightening their food budgets to survive,
00:12while restaurants are raising their prices to keep up with the alleged spike in inflation.
00:16All in all, it's not a pretty picture, and even longstanding restaurants like
00:20Cracker Barrel are not immune to the state of the economy.
00:23"...the cost of food has had one of the largest increases from inflation."
00:28In the final fiscal quarter of 2023, for instance, Cracker Barrel raised their
00:32prices by 8.7 percent, followed by another 4.9 percent hike in 2024. And they aren't alone.
00:38According to the National Restaurant Association, the price of restaurant food across the board
00:43rose by roughly 3.6 percent over the course of 2024. Rising prices have helped contribute to
00:48a trend of people staying home instead of dining out. According to an August 2024 report from the
00:54Consumer Tracker, a third of American consumers say they now prefer to stay home and cook to save
00:59money. While Cracker Barrel did see a 6.9 percent boost in its 2024 Q4 earnings compared to 2023 Q4
01:06earnings, it still fell short of the analysts' consensus mark of $899 million and saw a store
01:12sales decrease of 5.5 percent from 2023. If it is any solace for Cracker Barrel,
01:17they aren't the only chain struggling. IHOP, The Cheesecake Factory, and Applebee's all saw
01:22downturns in their business over the last year. Cracker Barrel has been in business since 1969,
01:28but reputation alone doesn't seem to be quite enough to propel business forward these days.
01:32In 2023, newly appointed CEO Julie Massino identified cuts to Cracker Barrel's advertising
01:39budget as one of the reasons why the business had been struggling. Failure to freshen up an
01:42outdated brand image has been detrimental to more than a few American heritage chains.
01:47Case in point, Friendly's, a 1930s-founded restaurant that operates in the same casual
01:52family sector as Cracker Barrel. Within months of assuming her position as CEO,
01:56Massino brought in a new chief marketing officer, and during Cracker Barrel's fiscal 2024
02:01fourth-quarter conference call, Massino appeared optimistic about how these marketing strategy
02:05changes would unfold, reporting,
02:07"...we've partnered with a top-tier agency and have conducted extensive qualitative and
02:11quantitative research that is informing our upcoming brand refinements."
02:15During the call, Massino also noted that new CMO Sarah Moore is a digital marketing expert,
02:20and in today's world, Cracker Barrel cannot afford to neglect its digital brand image.
02:24Some sources estimate that 90 percent of consumers research a restaurant online
02:28before dining there, and 72 percent of those get their hot takes from social media.
02:33One of the biggest ways older restaurants show their age is by losing sight of the guest
02:37experience. Faded decor, sticky floors, beat-up furniture, and poor service are some of the
02:42things guests notice when they walk into restaurants that are past their prime,
02:45and Cracker Barrel has been struggling with these issues for a while.
02:48Cracker Barrel's need to modernize also extends to their menu. The chain built its reputation
02:52on serving home-style meals at affordable prices, but customers agree that the quality
02:57standards have slipped. Common online grievances include the food being overly greasy, too salty,
03:02sloppily prepared, and improperly cooked. One Yelp reviewer simply wrote,
03:06"...service sucks, food sucks, vibes suck."
03:08Upper management at Cracker Barrel admits improvements to the guest experience need
03:12to happen now, so they've embarked on a remodel program that will implement updates to the
03:16interiors or exteriors of select locations. The remodel program, which runs through 2025,
03:21will be accompanied by menu changes, but will it be good enough?
03:25Restaurants that get labeled as old-people places have a hard time shaking that reputation. In 2023,
03:31the Wall Street Journal revealed that 43 percent of Cracker Barrel customers are over the age of 55,
03:36while only 23 percent are under the age of 34. In 2024, CEO Julie Massino admitted to
03:42the New York Post, "...we're just not as relevant as we once were."
03:45Of course, leaning too far into current fads could alienate longtime patrons and topple
03:49any remaining sense of brand identity. We're looking at you, Nutter Butter. Are you okay?
03:54"...anybody visit Tim."
03:56But holding too tightly onto the old ways of doing business is a doomed strategy, too. To succeed,
04:01Cracker Barrel has to craft a robust plan of attack that draws in younger consumers,
04:05without irritating grandma and pops.
04:07"...how do we make sure that we appeal to people who love us,
04:10because we want them to keep loving us, but how do we welcome even more people into the brand?"
04:14One way Cracker Barrel has tried to appeal to both groups is by selling alcohol. Beer,
04:18wine, and malt beverages have been a smart move. Weekend brunch has long been one of the
04:22restaurant's attractions. Adding reasonably-priced mimosas to the occasion is a good way to get a
04:27fresh audience's attention. At the heart of Cracker Barrel's struggle are sales numbers
04:31that have been on a downturn for a decade. This reality has only made the fallout from
04:35the pandemic more difficult. Since lockdown, senior citizens have been more reluctant to
04:40dine out than ever. While attracting a new audience is important, Massino also hopes
04:43to bring back older guests by keeping some menu price points low. In the first quarter of 2024,
04:48Cracker Barrel raised prices in 150 locations while also lowering them in 70 restaurants
04:54nationwide. The chain is now focusing on adding new items to both the higher and lower-priced
04:58parts of the menu. Offering early dinner deals is a plan Massino says she believes
05:02will convince older customers, who tend to eat earlier, to visit the restaurant more frequently.
05:07Cracker Barrel is also facing some stiff competition. The chain is losing out to
05:11other restaurants that may have better advertising, better deals, or better food.
05:15On top of that, as a restaurant that serves both breakfast and dinner,
05:18Cracker Barrel effectively doubles its competition. For breakfast,
05:21the chain is competing with places like Denny's and IHOP, and for dinner,
05:24it competes with restaurants like Olive Garden and The Cheesecake Factory.
05:28In the summer of 2023, then-CEO Sandra Cochran said their marketing was less
05:32effective than they wanted, especially against the backdrop of a highly competitive and
05:36promotional marketplace. Many of the competitors are not only getting sharp in the price point,
05:40but they also increased their level of advertising. It is this highly competitive
05:44world that Cracker Barrel must navigate, using its new strategies to find new customer base,
05:49or crumble.