Cracker Barrel ($CBRL) continues to enjoy its down-home advantages that come along with its geographic footprint.
With its southern style of cuisine, Cracker Barrel sells 11 million tons of chicken and dumplings each year - along with 151 million eggs, 121 million slices of bacon, 57 million pancakes, 37 million orders of grits, 13 million pounds of chicken tenders, and more than four million Moon Pies.
Just taking a look at Cracker Barrel check-ins on social media shows how much people love this chain. Its Facebook ($FB) Were Here Count continues to steadily increase and is closing in on the 17-million mark today. It's not showing up in the stock price, however - Cracker Barrel stock is down in 2019, despite a string of earnings expectation beats.
The Secret To Their Success? Tourists Are Creatures Of Habit
Ever since the original Cracker Barrel opened in Lebanon, Tennessee, Dan Evins honed in on the thing that would make the chain (and keep the chain) a success: serving comfort food quickly, reliably and consistently in locations close to interstate highways. Evins realized that customers may not eat at the same Cracker Barrel more than once, but that they just might start looking for a Cracker Barrel every time they were on the road.
Cracker Barrel hits a sweet note with its fans which is evident in the data we found regarding hiring, social media, and the consistent expansion of Cracker Barrel locations. Part of that is driven by M&A. In October 2019 Cracker Barrel purchased Maple Street Biscuit Company in an all-cash transaction for $36 million. Over the course of 2019, job postings for Cracker Barrel rose more than 1.3%, as it looked to add staff.
1969 – 1979: beginnings of the Cracker Barrel empire
The very first Cracker Barrel was opened by Shell Oil sales rep Dan Evins. Back then, the U.S.’s highways weren’t as developed as they are today. His idea was to improve the sales of gasoline by opening a traditional country store and restaurant near highway exits, which would also make travelers’ road trips more pleasant.
The first restaurant was located close to I-40 in Lebanon, Tennessee. It opened in September 1969, serving up biscuits, grits, turnip greens, and country ham the Southern way. Back the cornbread was made from scratch, a practice that is still going strong at Cracker Barrel today.
Evins incorporated Cracker Barrel in February 1970 and opened up more locations. Throughout the early 1970s, Evins leased land on the sites of gasoline stations near highways to build his restaurants. In the early days, nearly every location featured gas pumps. The company started phasing this out during the gas shortage of the mid to late 1970s.
In the early 1980s, Cracker Barrel turned its focus on the restaurant and gift store sales. The company made its IPO in 1981 to raise funding for more expansion. After the IPO, the company grew at the rate of about 20% per year and by 1987 had more than 50 stores in eight states and an annual revenue of nearly $81 million.
As you can see in the graph below, Cracker Barrel had a rather flat period of growth in 2017 and then an uptick over 2018 and 2019. This year, store counts rose by about 1%.
By 1992, Cracker Barrel had a market value of $1 billion. The following year, the company’s revenue was nearly twice that of any other family restaurant. By the fall of 1997, there were 314 Cracker Barrel restaurants and the company had a goal of increasing the number of stores by 50% over the next five years.
The number of Cracker Barrel locations grew to more than 420 locations from 1997 to 2000. This rapid growth caused infrastructure and staffing issues for the company. By 2011 there were more than 600 Cracker Barrel restaurants in 42 states.
The map below shows Cracker Barrel locations today. The company has 650 stores in 45 states with the vast majority of them in the South, of course.
The Controversies And Recovering From Them
For years, Cracker Barrel suffered scandals tied to its hiring policies, resulting in lawsuits from staffers who alleged their sexual orientation was used to discriminate against them - however, the chain changed policies after that, and a separate US Department of Justice investigation in 2004 that resulted in a $8.7 million settlement paid by the restaurant chain.
Here’s the thing though: Cracker Barrel learned from its mistakes. Today, the company is one of the best rated (meaning most inclusive) companies by the Human Rights Campaign for its anti-discrimination policies and the benefits it offers to same-sex couples.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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