In this Weekly Wrap, we’re looking at the decline in tourism and restaurant sales, restructuring at Cracker Barrel after a tough quarter, Denny’s ‘Sticky Kicks,’ and more.
Tourism’s Impact on Restaurants
The Headline: “A decline in tourism is impacting restaurants”
The Source: Nation’s Restaurant News
What You Need to Know:
The U.S. Travel Association recently released its Travel Forecast, projecting little growth in spending for 2025 but a significant decline in international inbound travel.
Domestic travelers are forecast to spend $1.2 trillion in 2025, while international visitors are estimated to spend $173 billion this year, which makes travel America’s largest services export. That said, visits are expected to drop from 72.4 million in 2024 to 67.9 million in 2025, or by more than 6%.
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The reliance on tourism is highest in the fine dining segment, with an average of 41% of sales coming from travelers and visitors. One in four fine dining operators say visitors account for at least 60% of their annual sales. In the family dining, casual dining, and coffee-and-snack segments, roughly one-third of sales come from travelers and visitors. Travelers and visitors account for one in four dollars spent in the quick-service and fast-casual segments.
According to the association’s research, most restaurant operators say overall business conditions have deteriorated this year, with declining traffic and elevated costs dominating headlines. The decline in travel and tourism sales has exacerbated these challenges — 47% of operators say their sales from travelers and visitors in 2025 are lower than they would normally be in a typical year. Only 8% of operators say their tourism-related sales are higher, while 45% say they are about the same as normal.
Our Take:
We can sit and complain that international travelers, especially Canadian visitors, aren’t coming to the U.S. as much, and that areas that were once considered tourist havens are seeing a downturn in business. Or we can focus on what we can control, namely service and hospitality, and put a sharper spotlight on repeat guests.
The focus on repeat guests is more important than ever. Especially in tourist communities. And by repeat guests, I don’t just mean the local community. Humans are creatures of habit, and many people tend to frequent the same spots. Roughly one in three travelers repeats their vacations.
The good news is that most sit-down restaurants already have a tool at their disposal to track repeat guests: their reservation platform. Smart operators keep notes on guests — their preferences, allergies, etc. — and have their contact info. This does not mean you should barrage seasonal guests with emails right before high season arrives. But thoughtful, light outreach, assuming they are on your mailing list, is wise.
Even more important are the small details when a repeat guest returns after a long hiatus. A splash of wine, a tiny taster of a dish, or even a simple welcome back goes a long way. Sometimes it is as simple as remembering they loved a certain wine or food item the last time they dined. That alone can turn your restaurant into their go-to spot during their annual vacation. And more often than not, they will tell friends who may also vacation there.
It is not going to be easy for tourist hotspots. That means operators need to turn up every aspect of their business, focus on remembering the people who walk through the door, and make guests feel special every single time they arrive.
Appetizer Economy
The Headline: “Appetizer economy’: Food inflation is on restaurant table as diners go smaller with menu choices”
The Source: CNBC
What You Need to Know:
“Appetizer orders are up 20% year over year, even as entrees and desserts are largely flat or declining,” said Jim Pazzanese, executive vice president of global strategic procurement of Buyers Edge Platform, which tracks supply chain data within the food service industry. “The shift is visible at the item level,” he said, with some popular appetizer sales to restaurant operators experiencing growth rates north of 30%.
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“Consumers realize appetizers are more frequently tied to promotions and drink specials,” he said. “This makes eating out more affordable.”
He added that buying of frozen or shelf-stable appetizers, which are the fastest-growing appetizer SKUs, makes sense from an economic perspective for restaurant operators, too. “This is helping owners and managers reduce waste and manage unpredictable demands,” Pazzanese said.
Our Take:
I’ve been hearing this from numerous operators. We are in a value driven economy, and Olive Garden and other brands are seeing success with regular-sized and smaller-portioned entrees as an option.
This article doesn’t touch on it, but the GLP-1 and Ozempic trend is also affecting how and what people order. Usage of GLP-1s is on the uptick, and in the short term I don’t see that trend slowing down anytime soon.
Which means operators should be putting some focus and thought into the value and portion size of their menu engineering. Make sure the appetizer and small bites sections are thoughtful and bring value. It is also worth looking at the entree section to see if pricing and sizing can be adjusted on a few items to create a larger draw.
Cracker Barrel Update
The Headline: “Cracker Barrel cuts corporate staff as sales and profits tumble”
The Source: Restaurant Business Online
What You Need to Know:
The announcement was part of the chain’s business update for the three months ended Oct. 31, a period during which it unveiled a new, more modern logo that sparked intense backlash from consumers, who complained that it was bland and “woke.” The controversy, which appears to have been fueled by social media bots, led to calls to boycott the chain and oust its CEO and even drew a rebuke from President Trump.
Cracker Barrel quickly walked back the logo, as well as a plan to remodel its restaurants, but the damage was done. For the quarter, same-store sales declined 4.7% on a 7.3% traffic decline. Total revenues fell 5.7%, and income swung to a loss of $24.6 million.
The fallout from the logo debacle was exacerbated by a softer macroeconomic backdrop, executives said. And trends have worsened more recently, with traffic down about 11% quarter to date.
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On the food front, it's continuing to bring back old customer favorites. Most recently, that included country fried turkey, cinnamon swirl French toast, and the much-requested turkey sausage. Up next are hamburger steak and eggs in a basket. It’s also introducing innovative new items, like a breakfast burger.
The operations side remains a work in progress. After rolling out the first phase of a plan to streamline its back-of-house operations this summer, the company determined that it wasn’t working and has returned to its former processes.
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Executives also pointed to the chain’s loyalty program, Cracker Barrel Rewards, which now has more than 10 million members who account for 40% of sales. “We're able to talk to those guests directly in a more cost-effective way,” Pommells said, which could help the chain manage with less advertising.
Our Take:
Part of me feels bad for Cracker Barrel. I personally don’t think the backlash was warranted. They were trying to move into the 21st century and, in doing so, alienated the core of their clientele. I also think the outrage was artificially amplified by bots and a handful of very influential figures who, truth be told, should realize that their words can have outsized and sometimes catastrophic consequences for businesses.
I would be interested in hearing more about what specifically wasn’t working with the streamlining of BOH operations. Was the plan itself flawed, or was the drop in business so swift that the cost of those changes no longer made sense? I hope it was the latter, as operational changes generally take time to show results and often come with a fair amount of hiccups. You need to give changes time before pulling the plug, unless the changes were so poorly thought out and executed that a premature ending was unavoidable.
Another interesting point is that 40 percent of their sales are tied to Cracker Barrel Rewards. That suggests something is working. It’s worth looking at why it works and how similar approaches can help other operators better engage their regular and rewards-driven clientele.
Denny’s Sneakers
The Headline: “Denny’s unveils sneakers made with syrup”
The Source: Nation’s Restaurant News
What You Need to Know:
Denny’s is celebrating National Maple Syrup Day Dec. 17 by introducing Sticky Kicks — sneakers made with the brand’s signature syrup created in collaboration with footwear artist and designer Dan Gamache, better known as Mache.
The limited-edition high-top sneakers feature a clear, sealed panel to showcase the syrup, and are also designed with syrup-colored patent leather, tumbled yellow accents, and the Denny’s logo embossed on the heel.
“Sticky Kicks are impractical, unnecessary, and completely over the top, which is exactly why we love them,” chief brand officer Ellie Doty said in a statement. “At Denny’s, syrup isn’t just something we serve. It’s part of who we are. It’s our golden thread. So, it only makes sense we’d be the first to turn it into fashion.”
Our Take:
This is going to drive all the wrong PR. As a sneakerhead myself, I love exclusive sneaker offerings. And I guarantee these shoes will most likely be worth far more than their sticker value after launch.
But what does this promotion do for a business that is closing 150 underperforming stores in the coming months? Nothing. Is it going to drive new customers into stores? Maybe once, and that is a big maybe.
Does it resonate with the core clientele that has slowly disappeared over the past few years? No. Does it bring attention to food quality, offerings, or value? No.
This feels like one of those overly gimmicky PR and marketing stunts that does nothing in the long run to drive consistent sales. Their efforts and money would be far better spent on branding, improving service, food quality, and operational efficiencies. Brand awareness is important, but this type of awareness does not really fit the brand.