Cracker Barrel announced on its earnings call this week the “continued expansion of [its] off-premise business.” In particular, that includes expanding its catering business and also ramping up its efforts around third-party delivery.
The Lebanon, TN-based chain might be a fixture along highway exits across the country, but where off-premises ordering is concerned, it’s been slow to adopt, having only recently started testing a third-party delivery program in a few locations. Tests are reportedly “going well,” and Cracker Barrel is looking to roll out delivery to about 170 stores over the next few months, and have third-party delivery available in 400 of Cracker Barrel’s 650-plus locations.
The company is also adjusting its menu to accommodate off-premises, and Cracker Barrel says it hopes its new bone-in fried chicken offering will boost orders in this area. As any good southerner knows, fried chicken is best eaten a little while after cooking, not as soon as it leaves the fryer. That makes it an ideal food item in a delivery world where food sits for some minutes as it travels to your house. And as we’ve discussed before, food that gets better with delivery could be a differentiating factor for restaurants as more and more restaurants join the race.
Cracker Barrel has not yet disclosed which services it will partner with when it rolls out its delivery efforts nationwide.
The company also continues to focus on its catering business, which has been in place for years. Off-premises catering is expected to continue growing over the next year, particularly in the B2B catering realm. To meet demand, Cracker Barrel has added catering managers at some locations and is also testing catering-specific items.
The focus on off-premises is part of the Southern food chain’s ongoing plan to bolster lagging sales and fix some operational issues, including increased costs due to construction of new stores, a new POS system, and the new fried chicken, which requires new kitchen equipment. The company reported two consecutive quarters of positive same-store sale growth on this week’s earning’s call, and also noted higher check averages.
As far as delivery is concerned, Cracker Barrel may be onto something with its new fried chicken offering. The company is a little late to the delivery game, compared to other “classic” family chains (Bob Evans, Denny’s, and IHOP all deliver extensively). Experimenting with which foods travel well (chicken) versus those best left on a plate (cooked carrots, IMO), could be one way for the chain to ensure higher quality food that’s worth paying a delivery fee for. Cracker Barrel has a lot of loyal followers and a decent mobile app, but so do a lot of restaurants. Truly good food that keeps its southern roots but translates to the delivery era, on the other hand, could be a game changer.
