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Financing

Red Robin sees 20-point sales drop from dining-room reclosings

A doubling of off-premise business failed to offset the loss of on-site business, the franchisor said.
Photograph: Shutterstock

After climbing to within 84.6% of year-ago levels for the week ended Nov. 1, sales at company-operated Red Robin Gourmet Burgers restaurants dropped back to 60.5% of pre-COVID levels by the seven days ended Dec. 27, a result of dining rooms being re-closed because of the post-Thanksgiving surge in new infections, the casual chain said.

Company units that were able to maintain indoor table service posted a same-store sales decline for the same period of 23.3% versus the 39.%% drop for places limited to takeout, delivery and outdoor dining. In terms of dollars, unit sales for mature units averaged $40,578 for the week ended Dec. 27, compared with a mean of $35,716 for units without indoor service, a weekly difference of $4,862.

Red Robin indicated that 176 of its 412 corporate restaurants have closed their dining rooms, primarily in California, Colorado, Oregon and Washington. The chain also has about 100 franchised locations within the U.S., according to Technomic.

The decline in in-store service was partially offset by a doubling of the brand’s orders for meals consumed off-premise.

In the business update released Monday, Red Robin said it made progress in its turnaround despite the extraordinary circumstances posed by the pandemic. Among the gains, it said, was the expansion of co-branding relationship with Donatos whereby pizzas from that regional chain are sold in Red Robin units for dine-in and takeout. 

Donatos-brand pies are now available from 79 Red Robin restaurants. The casual chain says those stores are projected to see a $45,000 bump in per-unit revenues in the second year that they offer the pies.

Overall, Red Robin said, its menu has been cut by one-third, resulting in a $2 million savings across company stores.

 

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