Red Robin's Improving Guest Satisfaction
Red Robin Gourmet Burgers Inc. is reporting improved guest satisfaction as it makes progress towards its three-year reinvention plan named North Star.
Guest satisfaction scores have increased 5 percentage points as compared to 2022. Guest wait times and false waits, measured through guest surveys, have “declined substantially” as restaurants return to being adequately staffed. “A year ago, more than 10% of our guests reported waiting more than 15 minutes to be seated. Now that it's down to only 2% of our guests. Shorter wait times result in happier guests and reduced walkaways,” said G.J. Hart - President and CEO, in a May 24 earnings call with analysts.
Financial results for the fiscal Q1 ended April 16 include:
- Total revenues are $418.0 million, an increase of $22.4 million compared to 2022.
- Comparable restaurant revenue increased 8.6%.
- Ninth consecutive quarter of positive comparable restaurant revenue growth.
- Comparable restaurant traffic increased 0.6%.
- Comparable restaurant dine-in sales increased 16.4%
- Comparable restaurant sales for the first 13 weeks of the quarter increased 10.0%
- Net loss of $3.1 million was unchanged compared to 2022.
-
Dine-in sales increased 16% as compared to the Q1 2022. Dine-in sales represent 74% of restaurant sales in Q1.
-
Restaurant-level operating profit as a percentage of restaurant revenue was 14.7%.
"We are pleased with our performance to start 2023 and the traction we are seeing as we roll out our North Star plan,” said Hart. “...Our strong results in the first quarter are a great first step on this journey. And we know this is a comeback that will take time to fully deliver.”
Former Jamba CIO Joins the C-Suite
Lynch’s official start date is June 5. She is tasked with innovating Red Robin’s technology landscape to deliver enhanced guest experiences, operational performance and shareholder value as the company executes its North Star plan announced earlier this year.
As CTO of Red Robin, Lynch will oversee strategic and operational planning, innovation, growth and maintenance of Red Robin’s comprehensive information systems and technological functions for corporate-owned locations and its restaurant support center.
Most recently, Lynch served as Chief Information Officer at European Wax Center, a specialty personal care brand with more than 950 retail locations, where she spearheaded the modernization of the company’s retail technology and digital transformation.. Prior, Lynch served as Senior Vice President and Chief Information Officer at Jamba Juice where she led the creation of a modernized, multi-platform digital ecosystem, including key operational and guest experience technology initiatives.
Red Robin’s North Star plan consists of five pillars, and the brand made progress on each during the 16 week Q1.
- Transforming to an operations-focused restaurant company. “This program changes the compensation structure for these partners to reward them based on the profits of the restaurants they oversee,” Hart explained. “... Leaders are incentivized and rewarded for driving and delivering results.” This is being rolled out to this multiunit operators. and will launch with the single-unit operators in 2024.
- Elevating the guest experience. The top two investment priorities related to the guest experience are staffing at hospitality levels and food quality enhancements and menu options. The brand, Hart, explained, is “ reverting back to our more traditional hospitality standard where servers have fewer tables and do not rely as heavily on server assistance.” The brand is installing a new flat top system that results in faster cook times and juicier burgers, and is adding new menu items.
- Removing costs and complexity. Red Robin’s supply chain team has been working to identify “areas where we can thoughtfully reduce or remove costs that do not impede the guest experience or detract from our commitment to quality,” Hart explained.
- Optimizing the guest engagement. Red Robin is moving towards an “operator- focused company.” To that end, the company is “ empowering our restaurants to engage with their communities directly,” as it returns “to our local marketing routes,” Hart explained. The Red Robin Royalty loyalty program has 11.5 million members, up from 11.3 million members a quarter ago. The brand is among those shifting from discounts to rewards for its most loyal fans.
- Driving growth in comparable restaurant revenue and unit level profitability. “Q1 results demonstrate what we can accomplish when we have the right strategy in place and execute accordingly, and we have only just begun,” said Hart.
Leadership Team Updates
New members to the brand’s leadership team were introduced. Jyoti Lynch, Chief Technology Officer; Kevin Mayer, Chief Marketing Officer; Mark Simpson as Interim Chief People Officer. Jason Rusk was promoted to Chief Business Development Officer. Chef Brian Sullivan joined the team in February and is leading culinary efforts.