An American dining institution's shares have plunged recently following the CEO's admission that the restaurant concept is no longer keeping up with the times.
Cracker Barrel, the iconic chain with 662 country-themed restaurants nationwide, appears to be losing its lustre. Throwing gasoline on the fire, its CEO Julie Felss Masino delivered a blunt assessment to investors, admitting, "We're just not as relevant as we once were," in a recent investor call. Masino, barely nine months at the helm, acknowledged a critical issue: "Some of our recipes and processes haven't evolved in decades."
The restaurant has seen a significant decline in popularity in the past decade, particularly among their longtime, older customers, who have not returned since the pandemic.
Who Is Julie Felss Masino?
In July 2023, Masino was named President and CEO of Cracker Barrel. Additionally, she was appointed to the Company's Board of Directors on Nov. 1, 2023. A results-oriented executive with over 30 years of experience, Masino has a proven track record of driving innovation and growth for leading restaurant and retail brands.
Most recently, she oversaw international expansion and market growth as the President International of Taco Bell (a subsidiary of Yum! Brands) from January 2020 to June 2023. Before that, she was president of North America for Taco Bell, demonstrating her proven ability to lead success across diverse markets.
Masino's leadership extends beyond the fast-food industry. She served as President, SVP and GM of Fisher-Price at Mattel, leveraging her brand-building and innovation expertise. Additionally, she propelled growth as President and CEO of Sprinkles Cupcakes.
Masino honed her retail acumen through various leadership roles at Starbucks Corporation from 2002 to 2014. She began her professional career building a solid foundation in diverse retail companies, including Godiva Chocolatier, Coach, J. Crew, and Macy's.
Masino currently lends her expertise by serving on the board of directors of Vivid Seats Inc. She holds a Bachelor of Arts in Communications from Miami University in Oxford, Ohio.
Cracker Barrel CEO Casts Doubt on Relevance
Following Masino's candid admission about the company's stagnation, the 54-year-old restaurant chain's shares plummeted nearly 20 per cent, reaching a 52-week low of $45.35 on Thursday – the weakest point in over a decade.
The stock closed at $45.67 on May 23, reflecting a 2.1 percent decline since Masino's comments. Last Thursday, the southern comfort food chain announced a $700 million investment plan to recapture its lost charm.
Cracker Barrel's rise to fame in 1969 stemmed from its all-American comfort food, including biscuits, gravy, and fried chicken. However, with recent years seeing a significant decline in customer footfall, management acknowledges the need for change.
Their proposed solutions include menu and marketing updates and a potential 'refresh' of the restaurant's interior and exterior design, possibly incorporating a new colour scheme. Cracker Barrel has implemented a makeover at two locations and introduced a revamped menu for testing at ten others.
Cracker Barrel is streamlining its menu this fall, trimming 20 traditional offerings for exciting new additions. Diners can look forward to a curated selection featuring premium savoury chicken and rice, slow-braised pot roast, and a hashbrown casserole take on Shepherd's Pie.
Can Cracker Barrel Regain Its Footing?
The management acknowledged that the rebranding is a long-term play, with a projected return on investment expected in late 2026 or 2027. This measured approach comes amid a concerning trend: Cracker Barrel has seen a steady decline in customer base, with a 16 per cent drop in diners over the past four years.
"A big reason the stock is down is that there wasn't much of a plan. They announced a plan for a plan, but they didn't give investors enough information to judge whether reinvesting in the stores was a credible plan to address the traffic losses," Truist analyst Jake Bartlett told The New York Post.
Moreover, attracting younger diners is another problem Cracker Barrel faces. "They have a lot of senior consumers, so long term, they need to migrate away from that consumer," Bartlett said.
The company, which faced criticism for anti-LGBT policies in the 1990s, struggles to retain its older clientele while simultaneously attracting a younger, more socially conscious generation like Gen Z.
Cracker Barrel's efforts to broaden its appeal faced a hurdle last year. Their decision to display rainbow rocking chairs on porches in recognition of Pride Month sparked controversy, with some customers even resorting to boycotts.
This isn't the only instance of a restaurant chain facing backlash for social stances. A similar situation arose last year when news broke that McDonald's franchises in Israel provided free meals to the Israeli military, sparking calls for a boycott from online users.
The restaurant chain, located across 45 states, is navigating a complex landscape to attract new demographics, and Cracker Barrel isn't facing these challenges alone.
Earlier this week, iconic casual seafood chain Red Lobster, grappling with similar struggles, filed for Chapter 11 bankruptcy protection after closing nearly 100 locations. Following a similar path, Applebee's has also seen a decline in its brick-and-mortar presence.
The restaurant chain, known for its budget-friendly burgers and signature 'dollaritas,' shuttered 35 locations this year, adding to the 46 closures it made in 2023 due to underperformance.
