Cracker Barrel Turns to Menu Changes and Delivery to Boost Traffic and Sales
Seeking to dish up tasty, home-style Southern cooking to its customers and mouth-watering growth for its investors, Cracker Barrel Old Country Store (NASDAQ: CBRL) mostly succeeded in its fiscal Q2 2020, but might have come up a few biscuits short. Efforts to shore up profits with a refreshed dinner menu, a vigorous delivery push, and integration of a new acquisition drove decent comparable-restaurant sales growth. However, traffic fell slightly short, and Cracker Barrel's long history of rising value seems to have reached a plateau, making it uncertain whether the company has lost momentum or is about to catch its second wind.
Cracker Barrel recently began upgrading and simplifying it menus, aiming to strengthen overall sales and the dinner daypart in particular. According to CEO Sandra Cochran during the company's Q2 2020 earnings call, its country fried steak and chicken and dumplings were "improved" with higher quality and better cooking processes. Simultaneously, Cracker Barrel raised the prices of these items and other improved foods on the menu.
Sales results clearly show that the appeal of the more toothsome recipes dished up to customers more than offset the impact of higher prices. The average size of checks rose by 4%, while traffic fell by 0.2%, leading to 3.8% overall growth in comparable-store restaurant sales. Quarterly operating income rose 3.2% year over year. These results surpassed those of the casual dining industry as a whole.
Source Fool.com
