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Red Robin CEO reveals plan to recapture the casual dining restaurant chain's soul

Paul Murphy, speaking at the ICR Conference, said the brand’s turnaround hinges on correcting service mistakes, adding Donatos Pizza, ending promotional marketing and pivoting delivery strategy

Nancy Luna | Jan 14, 2020
Nation’s Restaurant News


Red Robin’s new CEO Paul Murphy plans to recapture the soul of the brand by correcting operational missteps of the past, expanding the Donatos Pizza test to 100 restaurants, downsizing the menu, improving the quality of core items, increasing beverage sales and taking a different approach to delivery. “The plan will transform the business,” Murphy told investors at the annual ICR Conference in Orlando.

Murphy (left) was named CEO of Red Robin Gourmet Burgers Inc. in September. A self-described turnaround specialist, Murphy said he is “extremely confident” in his plan to reverse years of declining sales at the Greenwood Village, Colo.-based casual dining chain. He said customers left the brand after a series of missteps including eliminating bussers, which negatively impacted the dine-in experience.

“We’re calling it recapturing our soul,” he said. “It’s about moments of connections with Red Robin.”

Here are the highlights of Murphy's Red Robin turnaround plan:

Moving away from promotional marketing
Unwinding “significant discounting” compared to 2018 and the new advertising campaign are making a difference.
In the third quarter of 2019, the brand snapped a six-quarter streak of negative growth when it reported a 1.6% increase in same-store sales.
On Monday, Red Robin released preliminary fourth quarter results. Same-store sales increased 1.3% in the quarter.

Expanding Donatos Pizza test
Before Murphy came on board, some Red Robin restaurants began selling eight types of Donatos Pizza for delivery and dine-in. At the time, Red Robin and Columbus, Ohio-based Donatos declined to comment on the partnership. On Tuesday, Murphy said the chain will expand the availability of Donatos Pizza to 100 restaurants this year.

Nesting the pizza brand into stores “will create buzz and give guests another reason to choose Red Robin more often,” the company said in a presentation to investors. In 2021 and 2022, Donatos will be available in 150 restaurants. Murphy said adding pizza to the chain’s burger-centric menu makes sense for the brand and consumers.

Test stores are seeing average comparable traffic improve 3.5%. Consumers are ordering pizzas as appetizers, main entrees, delivery and carryout. “It is certainly a game changer for us,” Murphy said.

Fixing missteps in the dining room
While he didn’t provide specifics, Murphy said the brand is working on a new service model at 20 restaurants that corrects missteps of the past. 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.” He said the 20-store beta test will begin to roll out nationwide in the second quarter. Technology will play a role in improving service. The brand’s use of handheld devices to take orders in the dining room is “the precursor for us to begin a new service model,” he said. Red Robin also plans to roll out a new prototype restaurant in 2020

Digital and off premise changes
Murphy said the company plans to upgrade its loyalty program to create a better connection with its 9 million members. “We’re going to speak to each person who is in the loyalty program based on their purchase history instead of spreading offers like peanut butter,” he said. In 2019, off premise sales grew 28% to $163 million. Murphy said he wants to grow off premise sales by emphasizing catering and pivoting the brand’s approach on delivery. Specifically, the CEO said he wants to focus on direct delivery where guests order food from Red Robin’s digital platforms.


Often called native delivery, these delivery purchases are margin-friendly because brands are not being charged for an order generated in a third-party app. Commission fees are lower because the brand is only paying to outsource the delivery. Besides being economically favorable, Murphy said direct delivery allows the chain to collect and retain consumer data.


After meeting with Red Robin management at ICR, Jeffries analysts said Red Robin is making progress under Murphy. “However, the competitive environment remains difficult, and we have limited visibility on potential pace of SSS recovery,” the analysts wrote in a note released Monday. Red Robin, which has 556 restaurants in 44 states and Canada, released preliminary fourth quarter results during the conference. Same-store sales increased 1.3% with guest counts decreasing 3.4%. Total revenue for the quarter was down 1.2%, to $302.9 million.

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Originally posted by kramden:
In that same vein the restaurant around here that used to be great and is now in the dumper is Fridays.

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Murphy was named CEO of Red Robin Gourmet Burgers Inc.

“We’re calling it recapturing our soul,” he said.

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Originally posted by kramden:
In that same vein the restaurant around here that used to be great and is now in the dumper is Fridays. Used to be one of our favorites. Could be just the one here.

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Originally posted by PASig:
pizza at a place the is supposed to specialize in burgers?

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Originally posted by Black92LX:

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Originally posted by kramden:
In that same vein the restaurant around here that used to be great and is now in the dumper is Fridays. Used to be one of our favorites. Could be just the one here.

Nope, not just yours all of them here closed. I used to enjoy Friday’s good food, good portions, at a reasonable price.
Their Jack Daniels Chicken Strips were quite good. Friday’s will always hold a special place for me. First place I took a girl on a for real date, picked her up in my car, paid. All that stuff.

Here is a picture of the last time I was at a Fridays probably 6 years ago. Aside from the ketchup being added to the plate this is exactly how the turkey club and fries was delivered. Yup, that bad had to take a picture. Complained to the manager his response was that is the portion size and if not enough order another. Our rather reserved friend erupted on the manager it was quite the shocker coming from that buddy.