For about 15 months, Cracker Barrel’s turnaround strategy seemed to be going almost exactly as planned.
Customers were responding well to new menu items, and simplified operations were bearing fruit. Remodeled restaurants were showing sales and traffic improvements. The changes helped propel the 660-unit family dining chain to four straight quarters of positive same-store sales and a brightened earnings outlook for the year.
Then, on Aug. 19, Cracker Barrel quietly unveiled a new logo, a streamlined “Cracker Barrel” wordmark within a six-sided barrel-like shape. Gone was the image of an old man leaning on a barrel that had adorned the chain’s roadside restaurants and signage for most of its 55-year existence.
The new look fit well with Cracker Barrel’s $700 million plan to return to relevance under CEO Julie Fels Masino, who set out to refresh the old-timey brand for a more modern audience while maintaining a clear link to its past.
Instead, the new logo became a fixation of conservative critics, who accused the chain of going “woke” by shedding its classic Americana image. It added fuel to simmering social media angst over the chain’s restaurant makeovers, which replaced dark wood and kitschy decor with a cleaner, brighter design—but only at four test locations.
The controversy soon exploded across the internet, sending Cracker Barrel’s stock price plummeting and even drawing a rebuke from President Donald Trump. There is some evidence to suggest that the uproar also impacted customer behavior: According to Bloomberg Second Measure data, credit card transactions at Cracker Barrel began to slow the day the logo appeared and continued to slide as the backlash picked up steam.
Cracker Barrel responded by walking back the new logo and then suspending plans to remodel more locations. In a series of messages on its website, it said it had heard customers’ complaints, and assured them that the things they love about the brand are not going anywhere.
Now, as the dust settles, the Tennessee-based chain has become a closely watched case study at a time when many restaurant brands, from Starbucks to KFC to Red Lobster, are investing in significant changes designed to win back customers.
“Any rebranding, any strategy, will always have refinements and adjustments,” said Craig Miller, the former CIO of Sonic Drive-In who helped modernize the fast-food chain in the 2010s. But those changes must be made methodically as they are scaled across a brand.
Cracker Barrel’s mistake, he said, was that it made big pivots—particularly with its new logo—too quickly, without communicating them adequately to the market first.
“There’s so many ways that they could have tested this before it actually went up, particularly with social media,” Miller said. “You want to have as many checkpoints as possible before you expand it, and you want to be able to adjust as you go.”
Miller offered up an example from his time at Sonic. The brand had hired a new marketing firm that advised it to move away from a popular and long-running advertising campaign featuring two guys bantering in a car. The new firm felt that the bit was getting stale. But the change did not go over well.
“It was a disaster,” Miller said. Sonic decided it had to bring back the two guys, with a refresh. But it didn’t make the switch all at once.
“We didn’t just say, ‘We’re gonna stop,’” he said. “Instead, we got them together, and within two weeks, we put together a social media campaign, and I used it as a tool, because I can quickly see how consumers react a lot faster than I can in traditional media.”
The initial reaction was positive, and Sonic gradually shifted its advertising back to the two guys.
That example shows how, when used correctly, social media can be a valuable sounding board. But it can cut both ways. In Cracker Barrel’s case, the logo created a firestorm online that ultimately led to the chain's about-face.
“In the climate that we are all living in, the rules are different,” said Eric Yaverbaum, CEO of PR firm Ericho Communications, “and they got different really fast.”
Yaverbaum didn’t fault Cracker Barrel for its efforts to update itself for the modern era. “It’s not a grievous crime to want to be fashion-forward,” he said.
But he said the new look and feel may have clashed with an “erratic” economic environment in which consumers are craving familiarity and comfort.
“What people like in times of economic uncertainty—and this has always been the case—is things they’re used to,” he said. “They like nostalgia. They wanted the country kitsch.”
Cracker Barrel may not have been able to see that coming when it began plotting its turnaround last year, he said. But other companies have. He noted how Starbucks, McDonald’s and Chili’s have recently tapped into nostalgia in an effort to grab customers’ attention, in many cases with great success.
Still, Yaverbaum said he felt Cracker Barrel did the right thing by quickly reversing the logo and remodel plans and apologizing to customers. And, for better or for worse, the brouhaha has certainly put the brand on top of consumers’ minds.
“They just got an enormous amount of attention. They literally said, ‘Hey, sorry, we hear you, we’re gonna stick with what we have,’” he said. “Maybe that, after all is said and done, is a positive.”
Cracker Barrel still has work to do in terms of regaining the trust of customers and investors and even employees, said Miller, the former Sonic CIO. It will have to update its forecasts and overcommunicate about next steps as it works to get back on track.
“This was a massive emotional reaction,” he said. “I do think that they can recover. And it just means the first thing they’ve got to figure out is how do they rebuild trust and confidence as a public company.”
Cracker Barrel did not respond to a request for comment about the future of its turnaround plan.