Cracker Barrel Old Country Store Inc. plans by the end of September to launch its first loyalty program, covering both the restaurant items and retail and offering another tool to stem slowing traffic that extended into the fourth quarter and the current first quarter, executives said Wednesday.
The Lebanon, Tenn.-based full-service company, which also owns the Maple Street Biscuit Co. brand, reported earnings for the fourth quarter, which ended July 28, and leaders said they were taking steps to address diminished traffic at its stores.
“We had expected the traffic would improve in June and July with the onset of the summer travel season,” said Sandra Cochran, who will be stepping down as Cracker Barrel president CEO, on the call. “Unfortunately, this didn't materialize, and our restaurant and retail sales performance came in below our expectations. Although they've stabilized, we believe these fourth-quarter traffic trends will continue through most of the first quarter as well.”
Cracker Barrel is focused on marketing during the upcoming holiday season, during the company’s second quarter, and launching its first loyalty program, which Cochran said would be “a meaningful traffic driver as well as a key source of guest insight and data.”
While it will take time to build awareness and participation, she said, “We believe it has the potential to be the best, most engaging loyalty program in the full-service dining industry and will help us further extend our hospitality into the digital realm.”
The loyalty program is based on Cracker Barrel’s peg game, and participants will earn “pegs” for each dollar they spend with in both the restaurants and the retail shops.
Julie Fells Masino, who transitions into the role of Cracker Barrel CEO in November, said the fact that consumer can earn loyalty rewards through both retail and restaurant purchases is a key differentiator for the program.
“We know technology is important to a lot of our consumers,” Masino said. “But even if you're not super into technology, we're allowing you to earn points outside of the app, which is really distinctive in the industry. And we'll allow everybody to participate and let everybody know that we value them and that we value their visits with us.”
Cochran said the loyalty program’s pegs can be used for reward at various levels.
“The program is gamified, allowing guests to earn additional pegs through fun challenges as well as surprise-and-delight events,” she said. “We've been testing it with positive results among our own employees, who we know will be the best ambassadors for the program and key to its rollout.”
To further drive awareness, enrollment will be accompanied by a multi-channel media campaign. “We'll be partnering with Dolly Parton in late October to highlight the program,” Cochran added, “and to promote Dolly's highly anticipated collaborative album, ‘Rock Star,’ which will be available in our stores.”
For the fourth quarter ended July 28, Cracker Barrel’s net income was $37.5 million, or $1.68 a share, compared to $33.4 million, or $1.47 a share, in the prior-year period. Revenues were up 0.8%, to $836.7 million in quarter vs. $830.4 million in the prior-year period.
Same-store restaurant sales increased 2.4%, and same-store retail sales declined 6.8%.
As of July 28, Cracker Barrel operated 660 company-owned Old Country Store locations in 45 states and 59 fast-casual Maple Street Biscuit Co. restaurants.
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