Cracker Barrel’s Brand Misstep: A Case in Customer Loyalty
Cracker Barrel’s struggles reveal key lessons in branding, stakeholder trust, and the dangers of abandoning a company’s core identity.
When companies face declining sales or shifts in consumer behavior, leaders often feel pressure to innovate. But innovation without alignment to core values can backfire. A recent example is Cracker Barrel Old Country Store, a restaurant chain long associated with comfort, tradition, and nostalgia.
This discussion builds on an analysis of Cracker Barrel’s branding missteps by O.C. Ferrell and Linda Ferrell that argues Cracker Barrel’s recent struggles were not the result of “wokeness,” as some commentators suggested, but rather of management decisions that failed to respect the brand’s heritage.
The Importance of Brand Identity
Successful companies understand that customers value more than just a product or service. They also value the brand’s story. Coca-Cola’s failed “New Coke” launch in the 1980s illustrates this lesson. By altering its iconic formula to compete with Pepsi, Coca-Cola overlooked the emotional connection consumers had to the original formula. The backlash forced the company to revert to its original product, reminding managers everywhere that loyalty depends on trust and familiarity.
Cracker Barrel has now encountered a similar challenge. For decades, the company positioned itself as a place where families could enjoy comfort food in a rustic setting. Its rocking chairs, fireplaces, and décor all reinforced a sense of tradition. This emotional connection is as important as the food itself.
Management Decisions and Their Consequences
Rather than reinforcing this identity, Cracker Barrel’s leadership pursued an aggressive rebranding strategy. They hired a new CEO with fast-food experience, redesigned stores, altered menus, and even changed the logo. These decisions attempted to appeal to younger generations but failed to resonate with existing customers.
Longtime patrons felt alienated, believing the company no longer valued its roots. Meanwhile, younger customers had no nostalgic connection to replace what had been lost. As a result, the brand risked losing both groups.
Shareholders and Stakeholders Push Back
Major investors voiced concerns. For instance, shareholder Sardar Biglari called the remodels “folly” and reminded leadership that heritage, not trendiness, built the brand. Still, the company pressed forward with costly renovations. The result was negative feedback from customers, social media backlash, and falling stock prices.
This demonstrates a key point in stakeholder management: ignoring loyal customers and shareholders undermines trust, especially when decisions appear disconnected from the brand’s values.
Lessons in Crisis Management
Other companies have faced similar crises, such as Bud Light’s advertising controversy and Target’s shifting social positions. In all cases, the deeper issue was not politics but trust. Customers respond negatively when they feel brands are inconsistent or insincere.
Cracker Barrel’s additional mistake was in communication. Rather than acknowledging concerns and clarifying its intentions, the company released statements that seemed defensive and out of touch. Eventually, it restored its classic logo and slowed the redesign plans, but by then much of the reputational damage had been done.
Moving Forward
For Cracker Barrel, the path to recovery requires rebuilding trust by returning to its core identity: comfort, tradition, and community. This means listening closely to loyal customers, being transparent with shareholders, and enhancing (not discarding) the elements that made the brand successful.
For business students, the Cracker Barrel case highlights important lessons in branding, stakeholder management, and the risks of strategic missteps. Companies that abandon their unique identity to chase trends may not only fail to gain new markets but also lose the ones they already have.
For a deeper look at Cracker Barrel’s rebranding failure and the lessons for managers, read the full editorial analysis by O.C. Ferrell and Linda Ferrell.
In the Classroom
This article can be used to discuss strategic decision-making (Chapter 6: The Nature of Management) and the marketing concept (Chapter 11: Customer-Driven Marketing).
Discussion Questions
- Cracker Barrel’s challenges have been compared to Coca-Cola’s launch of ‘New Coke’ in the 1980s, which was quickly reversed after customer backlash. Research the ‘New Coke’ case and then explain how it is similar to and different from Cracker Barrel’s recent strategy.
- How can businesses balance the need for innovation with the need to preserve tradition and customer trust?
- In what ways did Cracker Barrel’s response to criticism worsen the situation, and what could the company have done differently?
This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.
O.C. Ferrell is the James T. Pursell Sr. Eminent Scholar in Ethics and Director of the Center for Ethical Organizational Cultures in the Raymond J. Harbert College of Business, Auburn University. He was formerly Distinguished Professor of Leadership and Business Ethics at Belmont University and University Distinguished Professor at the University of New Mexico. He has also been on the faculties of the University of Wyoming, Colorado State University, University of Memphis, Texas A&M University, Illinois State University, and Southern Illinois University. He received his Ph.D. in marketing from Louisiana State University.
