Red Robin CEO looks to the future

By

Rounding out his second year as chief executive at Red Robin Gourmet Burgers, Steve Carley said efforts to revitalize the casual-dining chain are taking hold.

Known for its two-handed burgers and bottomless fries, Red Robin has been hit by growth in the fast-casual segment as “better burger” players like Five Guys Burgers and Fries and Smashburger expand.

With a multi-point turnaround plan dubbed Project RED — which stands for revenue growth, expense management and deployment of capital — Red Robin has cut costs, upgraded its menu, built up its bar business and launched a new loyalty program that has more than a million members.

Most recently, Red Robin has beefed up its culinary team and, in January, the chain opened a state-of-the-art test kitchen and consumer-learning lab, where training videos can also be filmed.

Earlier this year, Red Robin also launched a new Tavern Double platform with innovative burgers that start at $6.99, but have check-building add-on options for $1 more.

Traffic counts have been declining, however, and Carley said new initiatives will focus on driving guests through the door.

In an interview with Nation’s Restaurant News Friday, Carley outlined things to come for Red Robin:

It sounds like you’re gearing up for more work on the menu. Can you tell us what’s planned?

When I first came on board, it had come to a point where we didn’t even have alcohol or dessert menus on the table anymore. It was more important to turn the table than giving guests a chance to get dessert or a milkshake or another beer. The first thing I did was put menus on the tables, and we put in a happy hour and expanded our appetizer menu. Then we began to build our dessert menu.

We’re in early innings of all of that. Now we’re making a real effort around appetizers, especially ones for parties of two — now all are shareable for four or more. We’ll do more desserts, like individual indulgences that people can share or take with them. We’re looking at things like cake pops and samplers of different milkshakes, or stuff that’s shareable so you don’t have to commit to a big slice of pie, and prices that are flexible to add on to a check.

Our new mixologist has taken a new look at our beverage lineup, so you’ll see more there.

You have been building the bar business. How is that going?

Ten years ago we were doing about 11 percent beverage/alcohol sales. Over the next decade, that dropped to almost 6 percent. The great news is that in 2011, we added 70 basis points to beverage/alcohol and 90 basis points in the first quarter.

You have been taking a lot lately about value. How is Red Robin communicating that message to consumers?

We did more consumer research last year than we’ve ever done. We wanted to see where we were winning and where we were losing. What came back is that we have overwhelming brand equity with families and kids, and if you’re looking for a high-energy casual environment. The challenge is all-around value and affordability. Consumers said, ‘We want Red Robin, but we need more value and affordability.’

We think the new Tavern platform offers that. It’s a third-pound of beef, with American cheese, lettuce, tomato, mayo on a toasted bun, and then we have things like Buffalo style with blue cheese and shaved celery, and you can add that for only $1.

Next page