Cracker Barrel CEO apologizes for logo, store changes

Earlier this year, Cracker Barrel angered a portion of its customer base when it released a new version of its logo without its signature barrel and the man we now know is named “Uncle Herschel.” 

Some fans of the chain saw this as Cracker Barrel “going woke” and following Mars Inc. and Pepsico, which renamed their Uncle Ben’s and Aunt Jemima brands, respectively. Both companies made those changes due to the perceived racism of the original packaging.

“We recognize Aunt Jemima’s origins are based on a racial stereotype. While work has been done over the years to update the brand in a manner intended to be appropriate and respectful, we realize those changes are not enough,” Quaker Oats Chief Marketing Officer shared in a statement when the change was made.  

Mars called the Uncle Ben’s changes an evolution.

“As a global brand, we know we have a responsibility to take a stand in helping to put an end to racial bias and injustices,” a Mars spokesperson said in a statement to HuffPost.

Both brands faced some backlash and cries of being woke, but neither saw major boycotts or drops in sales.

That was not the case with Cracker Barrel, which faced a massive backlash over its changes.

Cracker Barrel investor seeks control

Cracker Barrel has been drawn into a proxy contest started by activist investor Sardar Biglari, who owns approximately 2.9% of the company’s shares through Biglari Capital Corp. The company filed paperwork with the SEC addressing Bilgari’s action.

The filing noted that: 

• This marks his eighth attempt to secure a board seat at Cracker Barrel. 
• Biglari is urging shareholders to vote against the re-election of CEO Julie Felss Masino and director Gilbert Dávila during the upcoming annual meeting in November. 
• He attributes the company’s recent challenges, including declining customer traffic and the backlash from a controversial logo redesign, to poor leadership and strategic missteps
• Cracker Barrel noted in the filing that it’s in the early innings of its transformation “with positive signs that we are on the right path.”
• The company also shared that its turnaround plan received 100% support from the board, including a director appointed by Bilgari.

Source: SEC

Americans are divided on changing names

A Harris Poll conducted after the Aunt Jemima and Uncle Ben’s name changes showed that Americans are divided on the issue.

• Fifty-one percent of all Americans say brands with controversial names should not rebrand, while another 49% say they should.
• Younger Americans are more willing to endorse a rebrand compared to their older counterparts. 
• Almost two-thirds (63%) of consumers ages 18-34 say brands with controversial names should be rebranded, compared to just 35% of consumers ages 55-64.
• People of color are also more willing to advocate for such changes. 
• Nearly two-thirds of Black and Hispanic consumers (63% and 61%, respectively) say such brands should have their names changed, compared to only 42% of white consumers.

Cracker Barrel was hit, but how hard?

On the day Cracker Barrel released its new logo, the chain’s stock closed the day at $59.47. At market close on Thursday, Sept. 19, it was trading at $45.80.

That’s a meaningful drop, but not a collapse. The chain also posted mixed results in the fourth quarter, but that period ended on August 1, before the new logo was made public.  

• Total revenue was $868 million. Compared to the prior-year fourth quarter, which included a benefit of $62.8 million related to the 53rd week of the prior fiscal year, total revenue decreased 2.9%. Adjusting for the impact of the 53rd week in the prior-year quarter, current-year quarter revenue increased 4.4%. 
• Comparable store restaurant sales increased 5.4% over the prior-year quarter, and comparable store retail sales decreased 0.8%.
• GAAP earnings per diluted share were $0.30, and adjusted earnings per diluted share were $0.74.
• GAAP net income was $6.8 million, compared to the prior-year quarter GAAP net income of $18.1 million. 
• GAAP net income in the prior-year quarter includes a benefit of $5.5 million related to the 53rd week. Adjusting for the impact of the 53rd week in the prior-year quarter, current-year quarter net income decreased 46.6%.  

Doug Garnett, a retail author and consultant, sees the anger over the change as fake.

“We are, once again, amidst a manufactured crisis of cultural outrage — outrage unrelated to Cracker Barrel’s reality. It is not, after all, some company with deep cultural history. It was artificially created in 1969 to reap profits from consumer desire for cultural artifacts,” he wrote on RetailWire. 

More Restaurants:

• Chick-fil-A to open its first global restaurants in 2025
• Famous Japanese restaurant chain closes US restaurants
• Popular Italian restaurant chain files Chapter 11 bankruptcy

Incisiv Chief Customer Officer David Weinland shared his position on the same webpage.

“The fact that stuff like this gets so much attention these days is just endemic of the destructive nature of social media and the politicalization of literally everything. Is ‘simple’ in design boring, or modern? Do historical logo elements going away mean the company is ‘woke’? One thing is for sure: it seems everyone has an opinion on it. I really don’t care what the logo looks like – they still make a damn good biscuit,” he shared.

Cracker Barrel CEO apologizes

Cracker Barrel CEO Julie Masino opened the company’s fourth-quarter earnings call with a lengthy apology about the logo incident (although she did not use the word apologize). 

“Cracker Barrel is not just an Old Country Store or a restaurant. It’s the front porch of America, and we take that very seriously. The feedback we received from our guests in recent weeks on our brand refresh and store remodels has shown us just how deeply people care about Cracker Barrel. 

We thank our guests for sharing their voices and love for the brand and telling us when we’ve misstepped. We’ve listened carefully. As we’ve discussed on past conference calls and presentations, we’ve been advancing a multiyear plan to return Cracker Barrel to growth and ensure we’re here to welcome families around our table for generations to come, while staying true to what is so special about the brand.

We conducted extensive research to inform our strategic plan. Well, what cannot be captured in data is how much our guests see themselves and their own story in the Cracker Barrel experience, which is what’s led to such a strong response to these changes.

We have already taken steps to get back on track. We want longtime fans and new guests to experience the full story of the people, places and food that makes Cracker Barrel so special. That’s why our team pivoted quickly to switch back to our old-timer logo and has already begun executing new marketing, advertising and social media initiatives, leaning into Uncle Herschel and the nostalgia around the brand with more to come.

We also hit pause on our remodels and are reverting the 4 locations with the modern design to our old-timer signage and more traditional interiors. And we’ve adjusted the investment plan for our restaurants.”

Cracker Barrel turns its focus to food

“The brand refresh activities around our logo and our remodel tests were only one part of the work we were and are doing to make sure Cracker Barrel continues to thrive. A key imperative of our multiyear plan has been to deliver food and experience our guests love, and we are placing an even bigger emphasis in the kitchen and other areas that enhance the guest experience. In the past week, we’ve instituted process changes to ensure our signature biscuits are living up to our guests’ memories and expectations, and there is more to come on the food front.

We look forward to continuing to invest in our loyalty program to seek even more direct feedback from our core guests. We are confident in our path ahead, leveraging the many elements of our multiyear plan that have been working along with these recent changes we have made, leaning into Cracker Barrel’s heritage, listening to and deepening the connection with our guests.

We’re moving ahead with a strong plan to regain traffic and the momentum we had a month ago. There is a lot to be optimistic about. And our teams are focused on getting back to a positive trajectory.”

Related: Beloved sandwich chain closed restaurants, bakeries

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