Additionally, Cracker Barrel’s beer and wine program is now in roughly 350 stores. The full rollout to 600 stores, which has been delayed to COVID, is expected by Q1 of 2022. The program mixes about 1 percent, but Cracker Barrel believes it can double that. Thus far, mimosas have been the most popular, and the chain has continued to test more items like Sangria and Blue Moon.
In terms of store design, operators are learning how to adapt to changing dine-in preferences. Roughly 125 stores are officially offering front porch seating and about 200 are offering it unofficially. It’s not yet decided how much of that style will be incorporated into future stores, but it is one of the matters that the brand is sorting through.
“We’re thinking about how [front porch dining] should play into future prototypes,” Cochran said. “… We’ll be thinking about what kind of equipment and kitchen layout will allow our operators to deliver the menu more productively. So we have a lot of work against how to improve the productivity of new boxes, hoping that that will allow us to continue and maybe even increase the number of new Cracker Barrel units that we feel comfortable opening.”
Cracker Barrel’s other brand, Maple Street Biscuit Company, experienced a Q2 that exceeded expectations, Cochran said, including several weeks of positive comps toward the end of the period. The quick-service chain has 36 units, with one opening in Q2.
Cochran said the team is continuing to work on building the pipeline and refining operations and systems to support the scaling of the brand. She added that the focus has been on securing the best sites with appropriate occupancy rates.
“We will be entering new markets as well as looking for additional locations around existing markets,” Cochran said. “And I’d like to say within the next fiscal year, we’ll be looking at growth in the double digits back to where we originally thought in that sort of 15 to 20 range. So then it starts to become meaningful, certainly on the top line numbers for us.”
Cracker Barrel is expecting Q3 restaurant comp sales to slide between 11 and 14 percent compared to pre-pandemic 2019 levels. Cochran said roughly 126 stores were closed due to the extreme winter event across Texas, but noted those results are baked into the Q3 guidance.
Cracker Barrel also announced that it will achieve the remainder of its $50 million cost savings in Q3. The chain anticipates that a little more than half of the savings will come from labor and related areas and roughly 20 percent from G&A. The majority of the other savings will come from other operating expenses.
The offsets to the savings come in three categories: investments in labor and supplies to support safety protocols, expenses related to strategic initiatives, and net expense from sale leaseback transactions.