When G.J. Hart came on board as CEO of Red Robin in late 2022, he had a laundry list of things he wanted to get done to turn the brand around. All of the items on that list were part of his “North Star” plan and included efforts to elevate the guest experience, remove costs and complexity, and drive revenue and profitability. The chain brought back bussers and kitchen managers, for instance, began incentivizing managers for generating profits, and overhauled its menu, including its signature burgers.
To support the investments needed to drive these changes, Red Robin intentionally pulled back on its marketing and promotional and marketing activity in 2023, including a reduction of media spend on social and local channels. As Hart told analysts in November, it’s important to execute at a high level when there are so many changes before promoting those changes. Now, however, the company is ready to talk about those changes.
During its Q4 earnings call Wednesday, Hart noted the company has been elevating its marketing capabilities which has “rapidly improved guest acquisition capabilities and capacity to target the right audience with timely and pertinent messaging.”
This improvement has been driven by its paid media strategy and a shift to more category-specific search engine strategies. There’s also a focus on social media, including a collaboration with celebrity bartender Ariana Madix, in October, which generated over 500,000 impressions in its first few days. In February, Robin partnered with Juicy Couture to “reimagine” the track suit to celebrate the chain’s enhanced burgers, launched in October. The campaign has generated over 800,000 impressions to date.
The company has also prioritized local marketing initiatives and provided each single unit operator with a local store marketing toolkit, including how to engage in fundraisers, to support those initiatives. Executives have said such integration into local communities is what made Red Robin “great in the past.”
Now, Red Robin is in the process of launching an entirely new marketing program. Beginning in March and through the second quarter, this program will showcase the work that’s been done as part of that North Star plan. It will include TV ads tested in six core markets. CFO Todd Wilson said those ads will target certain channels, events and times of day.
“We think going on TV really does get the word out broadly and so part of our approach is to go into those six markets, measure performance and that will inform how we approach the second half of the year,” Wilson said. “But it’s really pushing to get the word out and get people back in.”
Hart adds the point is to “remind our guests about some of the unique aspects of Red Robin;” for example, bottomless sides.
“We have over 30 items that are bottomless and we want to make sure our consumers know that. We want to ensure consumers know this core equity of Red Robin – a place for everyday value,” Hart said.
No doubt such value is becoming increasingly critical this year, and plenty of casual dining peers have reiterated their value strategies, accordingly, including via marketing support. For Red Robin, the plan is to invest an incremental $3 million for its marketing plan, offset by a reduction in G&A expenses.
The company will also update its loyalty program, which counts about 13 million members, in the middle of the year, shifting from a discount-based focus to a points-based rewards-based focus.
“We intend to transform our program into a VIP-like experience, delivering more relevant messaging to our members and ultimately fostering a new generation of ambassadors,” Hart said.
By the numbers
Red Robin’s marketing push comes as the chain continues to make progress toward its North Star Plan. As Hart noted, progress should accelerate this year as all the pieces fall into place, including marketing. In the meantime, here’s what Q4 looked like for the chain:
- Total revenues are $309.0 million, an increase of $19.4 million, inclusive of an additional week in the quarter
- Comparable store sales decreased 2.7%
- Net loss is $13.7 million, an improvement of $31.0 million from a net loss of $44.7 million during the same period of 2022.
- Adjusted EBITDA is $10.6 million, a 26% increase.
For full-year 2023:
- Total revenues are $1.3 billion, an increase of $37.5 million versus 2022
- The fifty-third week in 2023 contributed $24.5 million of restaurant revenue
- Comparable store sales increased 1.6%
- Net loss is $21.2 million, an improvement of $57.7 million from a net loss of $78.9 million during 2022.
- Adjusted EBITDA is $68.9 million, a 33% increase
- Repaid $24.9 million of debt and repurchased $10.0 million of stock.
Contact Alicia Kelso at [email protected]
