Cracker Barrel, a staple of American dining with its Southern country-themed restaurants boasting 662 locations nationwide, has seen a sharp decline in its stock value in recent weeks following remarks from its CEO.
The food chain, founded in 1969, gained widespread acclaim for its classic American fare, including biscuits and gravy and fried chicken.
Foot traffic has dwindled in recent years, however, which was exacerbated by the pandemic’s impact on its elderly customer base, who have been slow to return.
Another significant hurdle Cracker Barrel faces is its struggle to attract younger demographics.
CEO Julie Felss Masino shocked investors after admitting to them the company is losing relevance, Daily Mail reported.
The outlet also stated that Cracker Barrel’s stock has been on a downward trajectory over the past decade, adding that the situation took a nosedive when Masino candidly told investors during an investor call, “We’re just not as relevant as we once were.”
Masino, who assumed her role as CEO nine months ago for the once beloved food chain, acknowledged, “Some of our recipes and processes haven’t evolved in decades.”
Shares of the 54-year-old company plummeted by nearly 20 percent following her startling revelations.
Cracker Barrel hit a 52-week low of $45.35 on Thursday, marking its lowest point in over a decade.
The stock closed at $45.67 that same day, representing a 2.1 percent drop since Masino’s comments.
The company’s annual dividend has been slashed from $1.30 per share to a mere 25 cents.
Cracker Barrel announced plans last week to invest $700 million over the next three years in efforts to rejuvenate its appeal in response to its declining fortunes.
Company executives in response to a waning customer base and lack of appeal with the younger generations believe that updating the menu, revamping marketing strategies, and refreshing the restaurant’s aesthetic could address some of its challenges.
Analyst Jake Bartlett from Truist stated to the New York Post a key issue contributing to the decline in the company’s stock value.
“A big reason the stock is down is that there wasn’t much of a plan,” Bartlett said, further criticizing the company’s lack of clarity in their strategy.
“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,” he continued.
Two Cracker Barrel locations have already undergone renovations, with an additional 10 experimenting with a revamped menu.
Daily Mail reported that the company plans to axe 20 items from its traditional menu, replacing them with new offerings such as “premium savory chicken and rice, slow-braised pot roast and hashbrown casserole Shepherd’s Pie.”
The new menu items are slated to debut this fall.
Cracker Barrel isn’t the only classic American chain grappling with dwindling customer support.
Red Lobster, a beloved casual seafood establishment, made headlines this week by filing for Chapter 11 bankruptcy protection, following the closure of nearly 100 of its restaurants.
The seafood giant, which has shuttered establishments in 27 states, faced mounting challenges in recent years including escalating lease and labor expenses, coupled with ill-fated promotions like its renowned all-you-can-eat shrimp deal, Daily Mail reported.
Applebee’s has also been facing its own set of hurdles, evidenced by the rapid closure of 35 locations this year alone.
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