Wednesday, September 16, 2009

Cracker Barrel's return volley

After losing customers to fast-food places, chains like IHOP and Denny’s are fighting back with grab-and-go outlets of their own. IHOP, for instance, is testing a limited-service mutation called IHOP Cafe, where the menu is limited to wraps, sandwiches and a few other portable items. Denny’s calls its entrant Fresh Express, a section set up within existing stores as a takeout station. Bakers Square and Big Boy have similar experiments underway.

But Cracker Barrel, one of that sector’s powerhouses, is betting against them. Instead of creating a new set-up for patrons in a hurry, the country-store-themed chain is trying to compress a sit-down meal into a tighter timeframe. Tests of the Seat to Eat program have cut patrons’ wait times for a meal to less than 14 minutes, CEO Michael Woodhouse told investors yesterday. Starting next month, the initiative will be expanded to include all stores, though the process will stretch to 18 months in part because of the capital requirements.

Executives didn’t reveal the price of changing units’ kitchen configurations to accommodate Seat to Eat, but they noted that it would be part of a $30-million budget that also covers maintenance and the opening of seven stores. Other comments suggested the outlay could be in the $13-million range, with about half spent in 2010.

Woodhouse called it “an integrative tool to drive store traffic and increase productivity.”

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