Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The turnaround plan at Red Robin is underway. The historic
Speaker 2: burger chain is making some big changes. Gjheart took over
Speaker 2: in late twenty twenty two after a year's long slump
Speaker 2: for the firm stock, and his plan is starting to
Speaker 2: pay off. The company minted the best performance in the
Speaker 2: last two quarters. And the changes come at a time
Speaker 2: when a number of inflationary headwinds are challenging the food industry.
Speaker 2: Joining us now Gjhart himself CEO of Red Robin Gourmet Burgers.
Speaker 2: You know, interesting time to be navigating in your industry,
Speaker 2: especially because the cost of some types of food have
Speaker 2: been leading people to change course. For example, Shakeshack has
Speaker 2: been warning that competitors may double down on beef and
Speaker 2: chicken with egg prices surging. And if people are doubling
Speaker 2: down on beef, then do beef prices get impacted? How
Speaker 2: are you reacting? Are you making any changes to your
Speaker 2: offerings given what's going on?
Speaker 1: Well here at Red Robin. First of all, good morning,
Speaker 1: Good to be with you here at Red Robin. In
Speaker 1: our turnaround and just we call it a comeback here,
Speaker 1: we've had a lot of fundamental blocking and tackling work
Speaker 1: we've had to do, and so part of that is
Speaker 1: really reinvesting into food quality, raising up to standards at
Speaker 1: Red Robin, and we've done that now. So I would
Speaker 1: tell you we're not changing course from our overall north
Speaker 1: Star plan as we call it. But there's no question
Speaker 1: that inflation in our headwinds in our industry, and the
Speaker 1: consumers ever more sensitive to pricing and there's more and
Speaker 1: more value out there.
Speaker 3: So we do it.
Speaker 1: Around appointment dining, which is taking lower volume days of
Speaker 1: the week and promoting and having some price points. But
Speaker 1: what our strategy is with that, it gives guests the
Speaker 1: opportunity to come into Red Robin and really see what
Speaker 1: we're up to and that there's a whole new Red
Speaker 1: Robin here and that we're worthy of getting in their
Speaker 1: consideration set.
Speaker 4: It's a far more labor intensive restaurant then maybe other
Speaker 4: burger chains around the US. How have labor costs been
Speaker 4: and how is it managing a labor force right now?
Speaker 1: Yeah, So there's no question is there's the pressure on labor,
Speaker 1: particularly out in some of the high minimum wage states.
Speaker 1: In our comeback strategy, it was reinvesting labor back into
Speaker 1: our business so that we could provide the appropriate hospitality
Speaker 1: and fund to our guests. And we've been doing that
Speaker 1: and now as we enter into the third year this
Speaker 1: year at twenty twenty five, we're really focused on the
Speaker 1: efficiency we can gain because we've had to retrain and
Speaker 1: rewrite every training manual for everything that we're doing, and
Speaker 1: so now that we're through that, we can really focus
Speaker 1: on becoming much more efficient and that is one of
Speaker 1: our priorities this year.
Speaker 2: Do you worry about labor costs moving forward as well?
Speaker 2: With the immigration policies that are being put forward by
Speaker 2: the Trump administration, there have been a number of a
Speaker 2: restaurant companies in particular that are worried about what that
Speaker 2: would mean for the cost of labor.
Speaker 3: Yeah, well, it's yet to be seen.
Speaker 1: One of the things that we have here at Red
Speaker 1: Robin would being a fifty six year old brand. We
Speaker 1: have a lot of long tenure team members all over
Speaker 1: this country, and so that's a that's a good staple
Speaker 1: and steady group that we have and we're pretty well
Speaker 1: fully staffed around the country.
Speaker 3: So we're definitely paying attention to it.
Speaker 1: But I wouldn't tell you that I'm overly worried about
Speaker 1: it at this point.
Speaker 4: How hard is it to operate as a you know,
Speaker 4: fairly old brand. I mean, you're at least as old
Speaker 4: as I am.
Speaker 3: In a world when.
Speaker 4: These kind of smash burger trendy restaurants are are growing
Speaker 4: so prolifically. How do you how do you how do
Speaker 4: you keep the brand fresh?
Speaker 3: Yeah?
Speaker 1: Well, first I would say that Red Robin has been
Speaker 1: known as the burgerth or really mixing different flavors with
Speaker 1: burgers and doing some very unique and different things like
Speaker 1: our lava Caeso burger or our mad Love Burger or
Speaker 1: Jalapeno heat wave, things like that, And so we continue
Speaker 1: down the path of innovation and being really the leader
Speaker 1: around being the burger authority on gourmet burgers. But there's
Speaker 1: no question that some of the more fast casual concepts,
Speaker 1: they're growing fast and certainly have some intrusion and competition
Speaker 1: to us.
Speaker 5: But remember we are a full service experience here at
Speaker 5: Red Robin and what we call casual dining, and so
Speaker 5: if you want a great experience for a night out
Speaker 5: with your family, we're the place to go.
Speaker 1: And oh, by the way, we really will give you
Speaker 1: some unique opportunities.
Speaker 3: To try different products that have.
Speaker 1: Unique flavors, and so from that aspect, we're a little
Speaker 1: bit different than most of those other folks.
Speaker 4: I wonder about New York City. I don't believe there's
Speaker 4: a Texas Roadhouse here, which you know is your previous employer.
Speaker 4: And I know there's no Robin here because I was
Speaker 4: looking for one all day yesterday. So why it's not
Speaker 4: just you? Why do a lot of you know, nationwide
Speaker 4: restaurant brands skip New York City.
Speaker 1: Well, I think, well, listen, and we don't have anything
Speaker 1: in New York City. We do have plenty in New Jersey.
Speaker 1: Part of it is just in an economic model. In
Speaker 1: the restaurant business, occupancy costs are a key component, and
Speaker 1: in places like Manhattan or New York City, it's super
Speaker 1: super expensive and there is a ton of competition, and
Speaker 1: so there's so many and if you're a casual brand
Speaker 1: like US, there's just so much white space around the
Speaker 1: United States.
Speaker 3: We're a community brand. We want to be part.
Speaker 1: Of communities, and so you know, it's pretty tough to
Speaker 1: be part of Manhattan as a you know, one restaurant
Speaker 1: in a big sea of other folks.
Speaker 3: So I think that's part of it.
Speaker 1: And if you really want to put it as a
Speaker 1: showcase things like Times Square, lots of people will do that.
Speaker 1: Certainly you can do that, but you need to be
Speaker 1: willing to understand that that's going to have cost ramifications
Speaker 1: and be pretty tough to make money.
Speaker 2: I want to go back to something you were talking
Speaker 2: about a little earlier, where consumers really are cost conscious,
Speaker 2: and in your industry in particular, there have been a
Speaker 2: lot of value offers out there. Five dollar value offers
Speaker 2: in particular, that seems to be a golden number. I
Speaker 2: know you offer that ten dollars cheeseburger Tuesday, for example.
Speaker 2: Do you think that you need to go lower in
Speaker 2: price point because of what you're seeing from fast casual, Well, we.
Speaker 1: Have a very varied menu, so we have a lot
Speaker 1: of value on our menu with our tavern lineup of burgers,
Speaker 1: and again.
Speaker 3: We're full service experience.
Speaker 1: So when you combine that fact, we think we are
Speaker 1: very very value arned from that aspect. In fact, all
Speaker 1: of our consumer sentiment and our scores from a guest
Speaker 1: satisfaction show us that our value continues to improve. That said,
Speaker 1: when you start to have price points, particularly in the
Speaker 1: fast food or fast casual folks that are that cheap.
Speaker 1: Certainly people wonder, but at the end of the day,
Speaker 1: we think we're hitting the right mark. So we have
Speaker 1: our Monster Mondays, which is essentially where you can get
Speaker 1: a dollar or two off five items and you can
Speaker 1: really get a lot of value there. As you mentioned
Speaker 1: cheeseburger Tuesdays, we're getting double digit growth there. So certainly
Speaker 1: those are lower volume days of the week and we
Speaker 1: think that that helps get people and we're seeing their
Speaker 1: frequency on the weekends is higher now as a result
Speaker 1: of that, and our guest satisfaction scores again reflect that
Speaker 1: we've hit all time highs and guest satisfaction scores since
Speaker 1: we've been tracking with Technomic and with smg our current partners.
Speaker 3: So it's telling us that I think we're doing all
Speaker 3: the right things.
Speaker 1: But clearly this value message hopefully will start to dissipate
Speaker 1: for the industry as we go through twenty twenty five,
Speaker 1: because it's a tough one.
Speaker 4: All right, GJ, thanks very much for joining us. Look
Speaker 4: forward to attempting to get one of your burgers sometime soon.
Speaker 4: J hert there of Red Robin Gourmet Burgers