Under fire for its re-branding, Cracker Barrel on Tuesday night reversed course, and announced, “Our new logo is going away and our ‘Old Timer’ will remain,” becoming the latest company to have to reverse itself in response to a massive backlash on social media.
While the reversal may tamp down some criticism and reassure investors in the short-term, it won’t solve the company’s underlying problems. It’s stock is up today, recouping the value that was lost during the unveiling of the new logo. Yet while it is hovering at around $63 today, it was at $175 back in April of 2021.
As I noted in the Corner and discussed at greater length on The Editors, the problem I had wasn’t as much with the logo, but with the antiseptic redesign of the actual restaurants, which removed all their charm.
Some defenders argued that the chain has been in a death spiral with younger patrons not replacing older diners who had fond memories of the place, and that they needed to do something. But that “something” was clearly not to gut everything that existing customers liked about the brand.
Fox Business surfaced a number of warnings of the chain and the rebranding by an activist investor of the company, Sardar Biglari, who called the effort an “obvious folly” and begged the board to scrap it. I went through his 120-page slide deck on the issue last year, in which he made a very strong case that instead of spending $700 million on a rebrand, it should be focusing on improving food and customer service in its existing restaurants.
One of the most prescient slides highlighted a 2013 quote from the chain’s retired CFO, Larry Hyatt, in which he touted the lack of remodeling as a benefit of Cracker Barrel. He said, “[M]y rule of thumb is if there’s a casual dining company I’m invested in that’s just announcing new store remodel program, run, don’t walk in the other direction. And one of the financial strengths of the Cracker Barrel brand is, in our 43 years, we have never, let me say that again, never done a cosmetic remodel. We have never spent one dime of our shareholder’s money on a cosmetic remodel. Why? Because we’re an old country store.”
Reversing course on the logo was a very easy step for Cracker Barrel to make, but restoring the brand will require a bigger course correction.