Red Robin CEO Explains Turnaround Plan At ICR Conference

Restaurant chain Red Robin Gourmet Burgers, Inc. RRGB CEO Paul Murphy discussed at the 22nd Annual ICR Investor Conference certain aspects of his turnaround plan, according to Nation's Restaurant News.

What Happened

Murphy told investors at the ICR Conference his turnaround plan will "transform the business" through multiple initiatives, NRN reported. Some of the core strategies include simplifying the menu through fewer items, improving the quality of key items, focus on beverage sales, and expand the Donatos Pizza test to 100 restaurants.

Murphy said during his presentation he is "extremely confident" the multi-pronged approach can reverse a multi-year long trend of falling sales. Customers had become frustrated with the brand, especially when the restaurant slashed the roles of its bussers and expeditors.

"I don't think it's a secret we made mistakes in some of the things we did with the service model by eliminating bussers," he said. "It had a negative impact on the business."

Why It's Important

Customers are likely to "re-engage" with the restaurant if and when problems are fixed.
Red Robin also believes it will be better off by shifting away from being known as a discounting restaurant to one that is more family-friendly. The CEO wants to create "moments of connections with Red Robin," according to NRN.

Red Robin will explore a new service model at nearly two dozen restaurants in the second quarter with a focus on how technology can improve service. In the meantime, Jefferies analysts recognize initial signs of progress under Murphy's leadership but there is "limited visibility" on any potential same-store sales recovery, NRN quoted the research firm as saying in a Monday note.

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