American restaurant chain Cracker Barrel is slashing its corporate workforce in a bid to save $25 million, as it struggles to recover from a disastrous and expensive rebranding effort that has alienated its core customer base.
A Costly Reversal and Corporate Restructuring
During an earnings call last Tuesday, CEO Julie Felss Masino confirmed the 660-restaurant chain would be laying off members of its corporate staff. The 56-year-old Tennessee-based company stated the cuts would be implemented in two waves, which include some recent internal restructures. It declined to specify the exact number of jobs affected.
Masino acknowledged the move would be "understandably difficult" for employees but insisted it was "necessary to successfully navigate the current headwinds." These headwinds follow a catastrophic three-month period where the company was forced to abandon a major modernisation project after spending a staggering $700 million on updates to its logo, menu, and restaurant interiors.
The Backfired Rebrand and Customer Backlash
The chain's troubles began in mid-August when it retired its iconic logo of an old man in a rocking chair for a minimalist, flat yellow design. This, coupled with a store modernisation campaign that replaced its signature cluttered, wood-panelled walls with white paint and simpler art, sparked immediate fury.
Conservative commentators, including former President Donald Trump, labelled the new look as "woke." More broadly, loyal customers and staff complained the chain had abandoned its rustic charm and nostalgic appeal, which was central to its identity as a provider of Southern comfort food and country-themed shopping.
The financial impact was severe. The company reported a $25 million loss in the last quarter, with retail sales plummeting 8.5% compared to the same period last year. CEO Masino had initially pushed for the rebrand to combat relevance issues, noting that 26% of its customers were over 65 while only 12% were aged 25-34.
Analysts Doubtful of Cost-Cutting Cure
Industry experts are sceptical that layoffs alone can remedy the chain's deep-seated problems. Retail strategist Carol Spieckerman told the Daily Mail, "You can't cost-cut your way out of an identity crisis." She argued the $20 million in savings from job cuts "won't fix what's fundamentally broken here: a loss of confidence and clarity about what Cracker Barrel stands for."
Spieckerman compared the situation to retail giant Target's recent struggles, where attempts to navigate political and social issues led to customer alienation on both sides. "They were both left scrambling in the worst possible position: begging forgiveness during an economic downturn," she said.
Neil Saunders, Managing Director of GlobalData, noted, "Cracker Barrel's performance is very soft. And this was not helped by a botched rebrand, which pushed some diners away."
A Long Road to Recovery
Despite the turmoil, there are faint glimmers of hope. Spieckerman pointed out that Google review ratings have actually risen during the controversy and are at a five-year peak. The menu is receiving updates, and the brand's loyalty programme boasts 10 million members.
However, the path forward requires steadfast focus. "If they can stay focused on operations and stop chasing shiny objects, there's a path back. But it's a long road," Spieckerman concluded. Cracker Barrel did not respond to a request for comment from the Daily Mail.
