Cracker Barrel Country Store Thrives

December 20, 2013
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The notion of impulse buying is supposed to speak of spontaneity and fun. But the folks at Cracker Barrel Country Store have fashioned it into a kind of science. Although the notion of shopping at CBOCS is about as American as apple pie, the whole megillah means something different to an army of mostly white customers, whether they’re urban, suburban or foreign tourists. Although the CBOCS nearest you probably conjures up a certain stereotype and well-hackneyed images of down-home southern cooking, biscuits and gravy, chicken-fried steak, mashed potatoes with creamed gravy, black-eyed peas and racks of barbequed ribs, probably the farthest thing from your mind is furniture and bric-a-brac.

Yet it turns out that that the true bread-and-butter isn’t on the white bread, but in the thirty-slat rocking chair you take home between the kids in the back of your four-wheel-drive vehicle or have them send home to you in Cleveland, Turin or Adelaide. The layout of a typical Cracker Barrel restaurant is ingenious. Out front, a waiting area, with a retail store carrying everything from apparel to perishable food items to, you guessed it, the rocking chairs that grace each location’s front patio.

Cracker Barrel Country StoreAs with those clever folks at Ikea and Apple, that thinking-outside-the-box conceptual thing paid dividends in spades for its founding father. After customers leave their name with their hostess they are then guided toward the Cracker Barrel Old Country Store. The rest, as they say, is gravy! Cracker Barrel has leveraged its franchise into something massively lucrative. In its most recent quarter, the 625-unit chain derived over 20% of its total revenue from retail sales alone. An estimated 215 million customers visit Cracker Barrel locations each year, according to New York magazine. And because so many of them are sweetly coerced into helping out with informational surveys, the company already knows that 40% of its clientele are traveling. And travelers, surveys say, are always willing to open up their wallets and spend. According to The Financial Times, that means US$2.6bn in annual revenue for Cracker Barrel, which equates to US$400 per square foot of their business, which ties it with the profit machine that is Wal-Mart, offering gross margins of around 50%. Cracker Barrel and its shareholders have watched as shares in the chain gained 65%, almost triple that of the S&P 500, which is up by only 23% over the same time period.

The brainchild of Dan Evins a former Shell oil executive, the first restaurant was built in Lebanon, Tennessee, on Highway 40 in 1969. Instinctively, Evins added a country gift store to accompany the simple menus that provided genuine down-home country cooking on two-menus-a-day’s worth of breakfast and lunch of ‘Southern specialties’ to create a sort of eclectic Mountain Folks’ house of fun. Publicly traded by 1981, it grew and grew until it had a US$1bn value by 1992.

There have, however, been some bumps along the road to accompany such promiscuous success. The company’s innovations in food and Southern chatchkes were not accompanied by any sort of corporate will to embrace multiculturalism in the same manner most other corporate giants have over recent years. And although the company has provided millions for the Wounded Warriors Project, which helps veterans recover from PTSD and other problems, there was always a darker corporate side.

Consequently, when a New York Newsday article in December 1991 publicized a company memo encouraged managers to dismiss employees who “do not display normal heterosexual values,” all hell broke loose. As such, eleven employees were fired in separate states and the ACLU* and LGBT* went to war with the company. Worse yet, some restaurants were accused of discriminating against minority customers. It was the company’s dirty hidden secret, and it took until 2002 for the majority of shareholders to vote away any form of acceptable discrimination from the company’s bylaws.

In 2006, Cracker Barrel paid a US$2m settlement to end a lawsuit alleging sexual and racial harassment in three Illinois stores. They now display signs in the front foyer explaining the company’s non-discrimination policy and have finally brought themselves into line with the rest of corporate America.

*ACLU: The American Civil Liberties Union

*LGBT: The Lesbian, Gay, Transgender and Bisexual Communities

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