Though Red Robin Gourmet Burgers is experiencing same-store sales improvements in recent months, the casual-dining chain is still struggling with plunging visits due to dine-in restrictions tied to COVID-19.
Same-store sales for the quarter ended Oct. 4, decreased 25.1% driven by a 24.6% decrease in guest traffic. Average check declined by 0.5%, driven, in part, by fewer orders for beverages and premium burgers, the company reported Thursday. The company logged a $6.2 million net loss, widening from last year’s third quarter loss of $1.8 million.
Six of 35 temporarily closed company-owned restaurants reopened during the quarter and five shuttered permanently, the company said.
CEO Paul Murphy, who started last year, called the quarter an “inflection point” for Red Robin, which has seen sales improve since the onset of the pandemic.
“Comparable sales grew from negative 41.4% in the second quarter, two negative 13 to 14%. exiting the third quarter,” he said.
Off-premise sales increased 127.2%, accounting for 40.7% of total food and beverage sales.
Expanding outdoor seating by adding tables and heat lamps under all-weather tents has helped offset indoor seating restrictions. This makeshift outdoor dining allows restaurants to increase capacity by 10% to 15%. It's also driving a 4% increase in comps, Murphy said.
Murphy said the company is starting to install partitions between tables in order to expand indoor capacity, where allowed, as winter approaches.
Later this month, Red Robin will return to traditional TV advertising to help drive visits Monday through Thursday.
The company was “filled with optimism” before the pandemic, Murphy told investors.
Through the first eight weeks of the year, same-store sales grew 3.7%. COVID, he said, served as a catalyst to prioritize certain strategies including streamlining operations, trimming the menu and adding Donatos pizza to the menu. To date, Donatos is now in 79 restaurants.
The company plans to add Donatos to 120 locations in 2021.
“We are confident in our ability to invest in the growth of Red Robin as we emerge from the pandemic,” Murphy said.
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