Is Cracker Barrel Really Closing Forever?

Cracker Barrel has been around for a long time and has come to be associated with delicious and homey Southern comfort food. Per Country Living, the first outlet was launched in 1969 by Dan Evins in Lebanon, Tennessee. Everything was prepared from scratch including cornbread, something that the restaurant continues to do even now. Its menu items are wildly popular among its loyal customers. Consider this: Customers order around 11 million Chicken n' Dumplins each year. Phew, what a number! Other popular items include pancakes, bacon, chicken tenders, moon pies, and a lot more.

Despite being such a well-established brand, Cracker Barrel has occasionally found itself addressing unwanted rumors. For example, recently, some folks claimed that the chain is closing all its stores for good in 2021 (via Snopes). The rumor seems to have started because of an online ad that made the rounds this month and claimed that Cracker Barrel was closing up shop. So, what's really going on with the chain?

Well, as Snopes revealed, the rumors of Cracker Barrel's demise are unfounded and began when an advertisement proclaimed that Cracker Barrel is planning to get rid of its stores this year. The ad basically claimed, "Saying Goodbye: Stores Closing in 2021 Across The Nation (See Full List)." It appeared on the Outbrain advertising network and its origins remain unclear. What the link brought readers to was a 35-page slideshow that looks like it originated from Definition.org. Of course, Cracker Barrel never ended up even appearing in the article. This one was nothing but a viral rumor. 

In fact, as of May 2021, Cracker Barrel stated that it was back to its 2019 profits. The pandemic, of course, had a negative impact on its revenue in 2020. However, the company said nothing in its news release about shutting down any of its outlets — especially not on a full-time basis. The company's president and chief executive officer, Sandra B. Cochran, said, "As the ongoing recovery from the pandemic brings us closer to 2019 sales levels, I am confident our solid execution, unique brand, and the strategic initiatives implemented during the pandemic will support growth in long-term shareholder value." 

In 2020, Cracker Barrel seemed to be weathering the storm by keeping open up to 95% of the dining rooms across its 654 stores, according to FSR Magazine. The chain even utilized front porch dining to get through the tough year. As it turns to the future, the brand also plans to focus on an upgraded app to help customers ordering food and retail items. Like with many restaurants, Cracker Barrel has kicked off this year by welcoming guests back into dining rooms and continuing to offer curbside pickup for breakfast, lunch, and dinner, per the brand.

Basically, you can breathe a sigh of relief. Cracker Barrel is here to stay.

Cracker Barrel may not be going under, but its financial position still appears precarious. At least, it does when you consider its most recent moves. On Monday, June 14, The Morning Star reported the company will issue $275 million of convertible senior notes due in 2026 that will be fully or partially redeemable when Cracker Barrel gets optioned. So, what's that mean? Cracker Barrel is looking for people to buy debt securities (via Investopedia). In other words, it's a quick way to raise money at the risk of losing the company if Cracker Barrel can't pay it back.

This offering became a reality when Cracker Barrel made a press release announcing it all in a longer, more technical form. So, is Cracker Barrel being shrewd or desperate? In view of the company reaching its 2019 profits once more, it may be tempting to see the move as a bold maneuver to recoup losses from 2020. However, as The Morning Star noted, Cracker Barrel's shares had slipped by 2.5 percent while they were privately discussing this option. The decision to bet their future in such a manner, then, comes across more as a measure born from the pressures of the pandemic and Cracker Barrel's other possible issues that afflict restaurants in the casual dining industry.

Cracker Barrel will remain, either under present ownership or new, but it looks like the last year definitely made an impact.