Cracker Barrel takes McDonald's strategy to win back lost customers

For many who grew up in the South, Cracker Barrel has long been a home away from home. Even for those far away from the region, its country-inspired décor and homestyle meals have become a comfort staple that evokes a sense of nostalgia in homesick fans.

Maybe it's the smell of its biscuits' n' gravy, country fried steak, and cheesy grits, or perhaps it's the Southern country-themed gift shop, where shoppers can easily lose track of time and leave with more than they intended to.  

This year, Cracker Barrel rolled out a $700 million transformation plan aimed at remodeling its stores and updating the brand's identity. However, the changes sparked major backlash from the chain's once-loyal customers.

Now, the company is working to win fans back in any way it can, and it appears to be taking a page from McDonald's playbook.

Cracker Barrel offers free toys with kids' meals for Christmas 2025

From now through December 24, 2025, Cracker Barrel will include a free toy from the Old Country Store, valued at $5 or less, with every dine-in kid's meal. If the toy exceeds that price, customers will receive a $5 discount and pay the difference.

"With so much on families' plates at this time of year, we wanted to offer a small moment of joy that makes the season feel easier and full of cheer," said Cracker Barrel CMO Sarah Moore in a press release.

McDonald's is renowned for pioneering the kids' meal toy trend, selling over 1.5 billion Happy Meals annually worldwide, which accounts for a significant part of its sales, according to People Plus Science.

The fast-food giant leverages nostalgic marketing to create a deep emotional connection between its products and customers, fostering a sense of familiarity that has helped it build a loyal fanbase.

McDonald's has also expanded its offering by introducing merchandise collections, aiming to diversify its revenue sources, keep customers engaged, and boost sales. Most recently, the company released an exclusive winter collection just in time for the holiday season, featuring apparel, accessories, and home décor, now available through its Smilemakers and Golden Arches Unlimited online stores.

These strategies have paid off. In the third quarter of fiscal 2025, the company's comparable U.S. sales increased 2.4% year-over-year, driven by value offerings, menu innovation, and compelling marketing campaigns.

Cracker Barrel brings back holiday meal promotions

Cracker Barrel's seasonal promotions aren't just for children. The chain is also launching a "Meals for Two" offer, which includes a choice of a shareable starter or dessert and two full-sized entrées starting at $19.99. This deal is available all day Monday through Friday for dine-in only through February 5, 2026.

Additionally, the company is bringing back its Holiday Heat & Serve meals this year, available for pickup from December 21 to 28 at all locations.

Holiday Heat & Serve options

• Holiday Ham Heat & Serve Feast: Sugar-cured ham, cornbread dressing, gravy, cranberry relish, mac & cheese, mashed potatoes, green beans, rolls, apple streusel pie, and a pecan pie (Serves 8-10 people).
• Holiday Ham Heat & Serve Family Dinner: Sugar-cured ham, mac & cheese, green beans, rolls, dressing, gravy, and cranberry relish (Serves 4-6 people).
• Prime Rib Heat & Serve Family Dinner: Slow-roasted prime rib with au jus, creamy horseradish sauce, and classic sides (Serves 4-6 people).
• Holiday Pies: Available in Apple Streusel, Pecan, Chocolate Pecan, and Cinnamon Roll flavors.

Cracker Barrel faces customer backlash

Recently, Cracker Barrel modernized its classic country-style décor at some locations, removing all taxidermy and vintage products, and redesigned its iconic logo, eliminating the iconic man sitting next to a barrel.

However, the changes sparked massive backlash against the chain on social media, with fans accusing Cracker Barrel of abandoning its Southern roots. 

Even U.S. President Doland Trump slammed the company on his platform, Truth Social, calling for Cracker Barrel to restore its original logo, manage the company better than before, and "make Cracker Barrel a winner again."

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The critique led the company to issue a public statement promising to reinstate its original logo, suspend store remodels, and begin executing new marketing, advertising, and social media initiatives that align with its heritage. 

"The feedback we received from our guests in recent weeks on our brand refresh and store remodels has shown us just how deeply people care about Cracker Barrel," said Cracker Barrel CEO Julie Felss Masino in an earnings call. "We thank our guests for sharing their voices and love for the brand and telling us when we've misstepped."

Cracker Barrel suffers consequences

Despite reversing its mistakes, Cracker Barrel's business still suffered consequences. In the first quarter of fiscal 2026, total revenue decreased 5.7% year-over-year, with comparable restaurant sales down 4.7% and comparable retail sales falling 8.5%.

The company also closed one Cracker Barrel location and 14 Maple Street Biscuit Company restaurants during the quarter.

"First quarter results were below our expectations amid unique and ongoing headwinds," said CEO Masino in the opening remarks. "We have adjusted our operational initiatives, menu, and marketing to ensure we are consistently delivering delicious food and exceptional experiences. Additionally, we are executing a variety of cost savings initiatives to bolster our financial performance."

"Although our recovery will take time, our teams are more committed than ever, and we are confident that we will regain momentum," she added.

Restaurant chains lean on fast-food rivals' strategies

Cracker Barrel isn't alone in facing challenges. Food service traffic declined by 1% in the quarter ending June 2025, driven by consumers eating out less frequently, according to Circana. However, value-menu traffic rose 1%, marking the first positive growth in the last three years.

"Consumers are saying, 'We're struggling, or we're beginning to struggle or we're thinking more carefully about what we spend,'" said Harvard Business School Consultant and Lecturer on Restaurants Michael S. Kaufman.

To stay competitive, many restaurants are now trying to match fast-food pricing with new value deals and promotions.

"It's important for restaurants to remember that value is rarely defined only by price," said Circana Senior VP and Industry Advisor for Food and Foodservice David Portalatin in a statement. "Operational excellence in providing quality, affordability, great experiences, and convenience is what leads winning restaurants and their supply chain partners to greater success."

Between 2020 and 2025, menu prices at 16 major American restaurant chains increased by an average of 39%, nearly double the national inflation rate of 22%, according to FinanceBuzz. Cracker Barrel's prices rose by 35%.

"The casual restaurant market is usually one of the more pressured segments due to the higher price and tip," retail analyst Bruce Winder told The Street. "Deals will help drive traffic and conversion if executed correctly."

Related: 65-year-old fast-food chain sues major operator after closures