It's not too difficult to connect the dots here: listening to employees and improving the staff experience automatically flows through to improving the guest experience.
— Erika Adams
Early signs from Cracker Barrel‘s push to improve the guest experience by investing in the employee experience indicates that the move was the right one for the company, according to Cracker Barrel’s latest quarterly earnings report.
The company reported total revenue of $733.5 million in the current quarter, a 3.3 percent increase compared to the year prior. Restaurant revenue was up 2.2 percent ($591 million) while retail revenue was up 7.9 percent ($142.6 million). Same-store sales were up by 1.4 percent and Cracker Barrel’s average check increased by 3 percent, due in part to a 2 percent menu price increase and high-performing new menu items. Customer traffic decreased by 1.6 percent.
Last quarter, Cracker Barrel reported traffic declines of over 3 percent and negative same-store sales. It was not a great performance for the company, and CEO Sandra Cochran acknowledged that work needed to be done on the staff experience to improve those numbers.
“We’re looking more at every piece of it, how we are training our employees, how we are communicating to them, how we define the service model,” Cochran said at the time.
This quarter, the metrics are improving. Traffic was down by 1.6 percent and same-store sales were up by 1.4 percent. Cochran noted that the company would continue to invest in training into the next quarter.
“We’re looking at our manager training, our district manager training, as well as our hourly training and how to better incorporate technology; we’ll be rolling that out late in the year after we get through the holidays. And how we can do with even better job of leveraging our most senior hourly employees,” Cochran said on the company’s earnings call this quarter. “Those are the areas that we’re focused on in the employee experience.”
Cracker Barrel switched to a new point-of-sale system earlier this year, and is in the process of implementing tablets for servers as part of the upgrade. Leadership has also spent more time better training restaurant hosts to handle the pressure of both in-store and off-premise guests that they were juggling.
It’s not a full success story yet, and Cracker Barrel’s chief financial officer Jill Golder told analysts to expect that further investment in staff training may affect profit margins going forward. Labor costs accounted for 35.2 percent of total revenue for the current quarter, compared to 35.4 percent of total revenue last quarter.
Cracker Barrel shares were trading up 5 percent immediately after the call.