From Post staff reports Lebanon’s Cracker Barrel Old Country Store, Inc. is getting the attention of financial experts on Wall Street as well as many high profile personalities reporting business news in the national media. Celebrating its 40th anniversary this year and more specifically this past Saturday, Cracker Barrel is finding ways to defy a challenging economy and in the meantime is making headlines with its strategy. Started by two local guys and a handful of investors at a single location in Lebanon on Sept. 19, 1969, the national restaurant chain now has 590 stores in 41 states. Initially it was an idea by Dan Evins and Tommy Lowe to build a restaurant with good country cooking, friendly service and prices that a family could afford. And from this modest beginning the company now, 40 years later, has become a shining star in the world of food service. While Cracker Barrel has been celebrated year after year as one of America’s favorite restaurants, it most recently has received high marks for its financial performance during what many restaurant operators see as a difficult time to try and make a profit.
The company’s current president and chairman, Mike Woodhouse, said earlier this week that last year was the most challenging he’s seen in his career. He said the company’s business has been slower during the economic downturn, but even so, those who watch the performance of restaurant chains note that Cracker Barrel has managed to stay just ahead of the market average.
Woodhouse explains the company’s recent success saying the key has been keeping cost-cutting measures out of the view of customers.
“Our foundation is solid because we haven’t changed stuff around in this past year. I wouldn’t like to be in a place where I was having to build out of a highly discounted situation or I’d changed the menu offerings just to satisfy in the short term,” Woodhouse said as reported by Public Broadcast Radio.
Cracker Barrel has streamlined both the way it gets food to the tables and its retail inventory system. Rather than dropping menu prices or portion sizes, Woodhouse told the radio network that the company has added a few smaller options that cost less.
In its fiscal fourth quarter profits for Cracker Barrel rose 9 percent, a performance mark that earned the company a nice compliment from MSNBC which noted that this is “not an easy feat in the midst of a consumer spending contraction.”
The company earned $22.8 million, or 99 cents per share, for the period ended July 31, compared to $21 million, or 93 cents per share, a year ago.
According to Cracker Barrel, it expects fiscal 2010 income from continuing operations in a range of $2.85 to $3.10 per share, with revenue up 0.5 percent to 2.5 percent from 2009’s $2.37 billion.
In 40 years Cracker Barrel has seen significant change from the first location built at the end of Leeville Pike where the road intersects Highway 109. Early menus for the restaurant were printed on brown kraft paper, eggs were intentionally misspelled with a southern country flair as “aigs,” and when patrons finished eating they could fill their gas tanks with Shell gas.
No longer do the menus appear as they once did and the Shell Oil connection has been long gone, but Cracker Barrel is still an institution.
Cracker Barrel restaurants are still a family favorite, prices are reasonable, the food is good and the company is making a profit. Some things never change.