Cracker Barrel losing customers 65 and older as inflation soars
Cracker Barrel blamed inflation for a drop in silver-haired customers at the country-themed chain as rising prices took a bigger bite out of their budgets, the company said.
Customers 65 and older skipped by the highway staple over the summer, the company said in an earnings call with analysts on Tuesday – and “we still see them holding back visits,” chief marketing officer Jennifer Tate said on the call.
The 53 year-old chain sells kitschy items at its country store and serves up traditional southern comfort food like fried pickles, buttermilk biscuits, chicken fried steak, grits and loaded hash brown casserole.
The Lebanon, Tenn.-based company, said June and July were slower than usual as gas prices were elevated and lower income families curtailed their summer holiday driving.
“(We’re confronting) the challenge of navigating an environment of softer consumer demand and higher costs coupled with the uncertainty about when either of these dynamics will abate,” chief executive Sandra Cochran said.
Deutsche Bank analyst Brian Mullan estimates that dining room traffic was down by at least the mid-teens, he wrote in a research note, citing Cracker Barrel’s disclosure that its dine-in sales were down by 10% in the latest quarter compared with pre-COVID levels.
Mullan also pointed to menu price increases — which the company said it is expected to hike 8% in its guidance — as a potential “traffic headwind” in fiscal 2023.
Despite the loss in older diners, the company still reported growth in the most recent quarter.
Revenue for the fourth quarter ended July 29 increased by 5.9% from a year ago to $830.4 million while comparable store restaurant sales increased by 6.1% and comparable retail sales increased 3%, the company said.
Net income fell to $33 million from $36 million a year ago, as the company struggled with higher food inflation than it had expected. The company’s stock is down 1.4% to about $96 on Wednesday morning.
Cracker Barrel said it “gained traction” with millennials and guests between 44 and 55 — without offering details.
In August, the chain introduced a plant-based sausage, but also faced blowback from some customers who claimed the company was becoming too “woke.”
“Thanks Cracker Barrel now my family won’t be able to dine there because the troves of hippy stoner vegetarian lib cucks will now be invading my favorite chain restaurant,” wrote one Facebook user about the new veggie sausages.