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