Same-store sales were down 85 percent in the last week of March
Five Cracker Barrel units in Georgia and five Maple Street units in Georgia and Tennessee reopened dining rooms Tuesday after the states scaled back their mandated shutdowns earlier this week.
Cracker Barrel expects to open more units in those states and other areas as more stay-at-home orders are lifted. More than a dozen states have given official, clear-cut dates of when restaurants can resume dine-in services. Texas, Oklahoma, and Utah are among the states to reopen restaurants on Friday. Florida will allow dine-in customers on Monday, except for three South Florida counties.
Although states are reopening restaurants, there are notable restrictions. For example, in Texas, locations must limit dine-in traffic to 25 percent of capacity. In Georgia, there can be no more than 10 people per 500 square feet.
“Regardless of the manner in which public health restrictions are lifted, the Company is taking a cautious approach to reopening dining rooms, and is instituting operational protocols to comply with applicable regulatory requirements and to monitor developing health authority recommendations in order to protect the health and foster the confidence of the Company’s employees and guests in these communities,” Cracker Barrel said in a filing.
The brand has offered a limited menu and takeout Family Meal Baskets, added DoorDash, and implemented contactless curbside delivery.
In the week ending March 27, the first week in which all of Cracker Barrel’s locations were limited to off-premises, same-store sales sank 85 percent year-over-year.
After adjusting to the new model of operation, comps have improved since that time. The same is true for Maple Street, which had a smaller decline because of its size and underlying business model. Comps are expected to continue to rise as more states reopen dining rooms.
In response to the pandemic, the company furloughed employees and eliminated a larger number of positions at all levels—both at headquarters and in the field. Salaries were cut for corporate officers, including a 50 percent reduction for CEO Sandy Cochran. Compensation for board members was cut by 50 percent for the rest of 2020.
Cracker Barrel has also significantly reduced operating expenses, eliminated nonessential spending, adapted its labor model, instituted inventory management measures, and negotiated terms with vendors and landlords.
“These steps have resulted in significant savings and benefits to the Company, and the Company’s cash burn level has improved as a result,” the company said. “While some of these savings and benefits are one-time in nature, the Company believes that others represent on-going cost savings or business model improvements that will positively impact the Company beyond the pandemic. The Company will continue to evaluate additional actions to ensure the viability of Cracker Barrel and Maple Street and to preserve and, if necessary, increase available liquidity to maximize financial flexibility.”