Red Robin's revamp takes a bite out of wait times

Just 2% of guests now report waiting more than 15 minutes for a table, an 8-point improvement from a year ago.
Red Robin exterior
Same-store sales rose 8.6% in Red Robin's first quarter. / Photo: Shutterstock

If you visited a Red Robin last year, there was a decent chance you’d have to wait to get a table.

About 1 in 10 guests reported waiting more than 15 minutes to be seated a year ago, according to a company survey.

It is one of the No. 1 problems the chain has been working to solve as part of its turnaround plan under new CEO G.J. Hart. 

And while executives have cautioned that major changes at the 500-unit chain will take time, the brand has already made significant progress on wait times: In the first quarter of 2023, just 2% of guests reported waiting more than 15 minutes for a table, Hart said Wednesday.

Executives credited the improvement to better staffing, including the return of bussers, hosts, bartenders and expo staff that have enabled faster table turns. 

The reduced wait times may have translated to a slight bump in traffic, which rose 0.6% year over year, and dine-in sales, which were up 16%. Same-store sales, meanwhile, were up 8.6%, largely thanks to higher prices.

There were several other signs that Hart’s “North Star” plan is working. In the first quarter, Red Robin restaurants broke 700 sales records across hourly, daily and weekly benchmarks.

“The sales-per-hour levels that we are seeing from some of our best operators are incredible,” Hart said during a call with analysts. 

Supply chain efficiencies and other cost-saving measures contributed to better restaurant-level margins: 14.7% compared to 14% a year ago and 11.4% in the previous quarter.

The chain is also making progress on other efforts, like installing flattop grills designed to produce bigger, juicier burgers. They are in nearly 300 restaurants now and will be in place systemwide by the end of this quarter.  

Team members have said the grills are easier to use than Red Robin’s old conveyor-belt cooking system, Hart said. The new equipment also requires less maintenance and cleaning, he said.

The grills are part of a renewed focus on Red Robin’s signature product: its self-described gourmet burgers. To ensure that the burgers live up to that name, the brand is making upgrades to its buns, bacon, mayonnaise and tomatoes and changing how it preps caramelized onions and sauteed mushrooms, Hart said. 

It’s also changing how it presents the burgers. It has long served them in wax paper, but will move away from that later this year with new plateware that allows each burger to “stand tall on its own,” Hart said.

“With an upgraded burger patty and the best and freshest ingredients we can source, we think the time has come to showcase the beauty and deliciousness of our truly gourmet burger,” he said. 

The turnaround plan is moving forward on another front, too. Red Robin is close to completing a sale-leaseback of 10 of its restaurants that it expects will generate gross proceeds of $30 million. 

The chain announced earlier this year that it planned to sell up to 35 properties and lease them back from the buyers to help pay off debt, fund capital investments and buy back stock. 

Also in the quarter, the company bought five restaurants from a franchisee who retired for about $3.3 million. Red Robin already owns and operates more than three-quarters of its system.

With the chain’s revamp apparently working on all cylinders, Red Robin raised its outlook for the year. It’s now expecting total revenues of at least $1.3 billion in 2023, a slight adjustment to its previously announced guidance of “approximately” $1.3 billion.

It also expects restaurant-level margins of 13.5%, up from 13%, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $70 million to $80 million, up from $62.5 million to $72.5 million. 

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