Red Robin’s “North Star” plan, put into place in early 2023 shortly after G.J. Hart came on board as CEO, has hit a few roadblocks in the past year. Chief among them, a more discerning consumer set, which has impacted restaurant brands across the industry throughout the past few quarters. It has also hit Red Robin’s stock price, which is down nearly 60% over the past year.
But Hart didn’t take the job because it was going to be an easy – or fast – turnaround, and his five-point plan has gained enough traction to create a healthy dose of optimism among him and his team. If the company was in the “second or third inning” of that plan a year ago, it’s now about in its fifth, stalled only by those softening consumers, but gaining plenty of momentum nonetheless.
“I am proud of where we are relative to our plan. We’ve seen so many great signals that are giving us reason to believe the plan is working,” Hart said during a recent interview. “It’s never fast enough, but we’re seeing amazing improvement. These plans don’t happen overnight, we just need a better consumer environment.”
Hart believes such an environment will start to present itself after the presidential election on Nov. 5.
“The election is creating a bit of angst. I am optimistic once we get that behind us, it will create some stability and people can take a deep breath and settle back into a somewhat more normal environment, and that consumer sentiment should get better,” he said.
In the meantime, Red Robin is following the “signals” and staying the course. A recent team member survey, for instance, yielded record-high engagement. Overall guest satisfaction scores are higher than they were 10 years ago and are much higher than when Hart and his leadership team joined the company. Taste scores are up, guest sentiment scores are up, wait times are down, and guest relations complaints have “fallen off a cliff.”
“We’re seeing all these metrics move positive. They’re little things but they’re a precursor to what happens when a business gets stronger,” Hart said. “We’re continuing to make strides and making up ground to the industry relative to Black Box Intelligence data.”
What will further move the needle, according to Hart, is Red Robin’s recently revamped loyalty program, introduced earlier this year. The program has far exceeded expectations, yielding higher checks and frequency. Since the launch, Red Robin has experienced a 12% rise in people who come in up to five times a year.
“You start doing the math on that and you’re getting traffic like nobody’s business,” Hart said. “The second part of the program is we now have guest data capabilities to personalize communication to members that we couldn’t do before. That ability to personalize [messaging] to them will be another way to move the needle for us. I want people to understand this isn’t just loyalty, it’s about communication with loyalty members.”
The focal point of Red Robin’s messaging is its menu. Not only has the chain revamped its burger lineup, it has also leveraged that new platform to launch limited-time offers like the new Jalapeño Heatwave burger. Further, the chain is getting more aggressive about promoting its 30 Bottomless Sides. The messaging is intentional, moving away from discounting which hindered the brand in the past and moving toward value as it pertains to a better experience and better food quality.
“We’re screaming ‘value’ without deep discounting,” Hart said.
Like most companies, Red Robin’s value strategy has been adjusted to keep pace with a somewhat unexpected consumer slowdown in the second quarter. The chain started offering $10 cheeseburgers on Tuesdays, for instance, and added Monster Mondays, when customers can upgrade any burger to a Monster for $2 or grab a Monster Margarita for $5. These adjustments have lifted business during slower days and have supported its broader value messaging. What hasn’t been adjusted is the company’s big-picture plan. Indeed, Hart makes it a point to reiterate that Red Robin is sticking to that plan.
“The consumer is worried about economic conditions and they’re more discerning, so you better give them a great experience and that is what we’re focused on. We’re seeing real proof points and, in my experience, when you have proof points, then traffic will grow and you will see movement,” he said. “Staying the course, adjusting where we need to, and focusing on operations is going to pay dividends.”
Contact Alicia Kelso at [email protected]
