In Q1, Cracker Barrel expects sales to be negatively affected by rising COVID cases in core markets, but despite this headwind, comps are currently flat versus 2019, and the chain believes those levels will remain throughout the period. Another encouraging sign is the fact that weekday sales have continued to be strong and were positive compared to two years ago in the fourth quarter.
To Cochran, it shows some customers are returning to their regular habits.
“I do think that we're seeing in some communities some normalization of routines as we've now gone back to the back-to-school session and so on,” the CEO said. “So, we are pleased that we've seen the improvement and are hopeful that we will see continued recovery as we head into the second quarter.”
“We're pleased with the performance we've seen at the breakfast daypart and in the weekday breakfast in particular, which says we've got a lot of our guests wanting to get back to normal,” she continued later on the earnings call. “And so, it really is a state where many of our customers are just anxious to recover and get back to their routines. And on the other hand, we've got consumers that have increased concern with the Delta variant and we're just going to have to deal with that as it moves through in the next few months.”
As Cracker Barrel heads further into fiscal 2022, the company plans to leverage brand advantages to drive frequency from new and existing guests, starting with continued evolution of the menu. The chain finished the final phase of its dinner menu upgrades in Q4, and now will shift to breakfast.
Similar to what Cracker Barrel did with dinner items, the strategy is to streamline breakfast offerings to alleviate confusion, enable customization with build-your-own products, and highlight value. At the same time, the brand will improve back-of-house procedures and add new items to fuel check growth. The changes will be split into two phases, with the first part currently under test.
The company also hopes to bolster its off-premises presence. Cracker Barrel is confident that it can retain at least 60 percent of off-premises growth experienced during the peak of COVID through awareness building, advertising, and bigger partnerships with third parties, especially virtual concepts.
The chain's first digital brand, Chicken ‘n Biscuits, was expanded to 100 stores at the end of August. Pleased with the concept’s performance thus far, the company expects the virtual brand to reach roughly 500 locations by the end of Q1. As that product expands, Cracker Barrel will introduce a second concept, Pancake Kitchen, in roughly 100 stores.