This Gourmet Burger Chain Is Ramping Up Its Value Deals
Like its bottomless sides and drinks, the value deals at Red Robin just keep on coming. As confirmed in the company's recent earnings call, new value offers will soon hit the restaurant's menus to give consumers a much-needed price break and boost Red Robin's sales.
Starting at the end of August, customers will be invited to join Red Robin restaurants for a new Happy Hour deal, which is expected to include discounts on liquor. Additionally, later in the fall, the burger chain will begin to test various lunch specials across its 500+ locations nationwide.
The Red Robin executive team hopes the emphasis on value will resonate with customers and help generate buzz in the same way that its $10 Gourmet Meal Deal has since it was rolled out in late June. After introducing the meal deal—which includes a drink, bottomless steak fries, and a choice between the Banzai, Whiskey River BBQ, or Red Robin Gourmet Cheeseburger—customer value perception has grown and orders have been higher than anticipated, according to CEO Paul Murphy.
The company believes this new menu offering contributed to the 4% sales growth realized in the beginning of Q3—a positive rebound after coming off a slow end to Q2.
Red Robin attributed the unsatisfactory Q2 numbers to rising inflation and the general decline of casual dine-in traffic across the entire industry. Delivery and take-out options have continued to dominate across the board and many popular chains—including New York City-based Shake Shack—have struggled to get customers through their doors post-pandemic.
Even with these setbacks, Murphy expressed confidence that Red Robin's unique market positioning and these new deals give the burger chain a leg up against the competition.
"Still, when we evaluate our sales and traffic trends relative to our peers in the same markets, we are outperforming the casual dine-in segment," Murphy shared in the earnings call. "We attribute this outperformance to our high-low strategic approach to value, including higher priced, innovative, limited time offers and more compelling promotions."
Fresh offerings like the new Happy Hour and upcoming lunch specials are designed to attract business to Red Robin restaurants. But, in order to maintain acceptable profit margins, the company has also implemented a price increase of over 2% and is pushing its pricier limited-time menu items.
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Limited time offers in Q2 hit record sales levels and included the Smokehouse Brisket Burger, Pineapple Upside-Down Cake Milkshake, and Tequila Sunset Cocktail. Summer promotions currently on offer consist of the Savory Steakhouse Burger, Loaded Baked Potato Fries, a Pumpkin Spice Milkshake, and two alcoholic beverage options.
