Cracker Barrel announced it plans to raise menu prices despite reporting a decline in third-quarter restaurant revenue, after the Southern-themed restaurant chain’s CEO acknowledged last week that menu prices “are not as important as they used to be.”
Cracker Barrel is the latest company struggling to turn a profit in times of continued inflation.
The company hopes that a 5% price increase by the end of the year will help turn things around.
The Tennessee-based company reported third-quarter total revenue of $817.1 million, down 1.9% from the same period last year.
Cracker Barrel also reported same-store restaurant sales fell 1.5% and same-store retail shares fell 3.8%.
Last year, Cracker Barrel reported same-store sales increased 7.4% compared to the previous year.
“As we noted on our recent business conference call, our third quarter results were lower than expected due to slower than initially anticipated traffic, which underscores the importance of executing on our strategic transformation,” Cracker Barrel President and CEO Julie Masino told investors during the earnings call.
“Our team is committed to delivering these plans and continuing to deliver an excellent guest experience and manage our business every day, every shift.”
Despite the report, Cracker Barrel shares rose 3% on Thursday after the company reported earnings per share of $0.88, beating analyst expectations.
Cracker Barrel also lowered its full-year sales forecast to $3.49 billion from $3.55 billion, a 1.7 percent decrease.
The chain, which operates more than 700 locations across the United States, announced last week that it plans to spend up to $700 million over the next three years to renovate its restaurants.
Cracker Barrel plans to revamp its menu, overhaul its marketing strategy, and repaint the interior and exterior in new colors.
The company also wants to brighten the lighting in its restaurants and replace wooden chairs with booths and banquettes.
Cracker Barrel also cut 20 items from its menu and introduced new dishes like upscale, savory chicken and rice, slow-cooked pot roast and shepherd’s pie with hash brown casserole.
Cracker Barrel shares have fallen nearly 40% so far this year after trading at an all-time high of nearly $180 in July 2019.
Since then, the stock has fallen more than 73%.
Cracker Barrel has struggled to appeal to a younger customer base while still retaining its traditional older customer base.
Last year, the chain introduced rainbow-colored rocking chairs for Pride Month, sparking backlash and accusations of “rainbowwashing.”
