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Ruby Tuesday

Ruby Tuesday launches operations improvements

Plan includes reduced lunch menu, delivery test

While Ruby Tuesday Inc. studies its strategic options, including a possible sale, the casual-dining brand has begun a 12-month plan to improve its operations and positioning, the company CEO said Monday.

“Our first and foremost priority is to dramatically improve the total guest experience,” said Jim Hyatt, Ruby Tuesday CEO, in a fourth-quarter earnings call, adding that he’s visited more than 60 restaurants in his four months in the role.

“I have experienced both the positive and the negative, that our brand has to offer,” Hyatt said.

He said the Ruby Tuesday leadership team is assessing all aspects of a guest’s visit, “from the hostess greeting until they drive off our parking lot.”

As a result, the Maryville, Tenn.-based casual-dining operator is rolling out a 12-month calendar of operational improvements called the “Plan to Win,” which will be supported with marketing and promotions, he said.

“We have recently provided some new tools for our operations teams to utilize,” Hyatt said. “Taking our top performing restaurants for best-in-class bench-marking across multiple areas, we established accountability within peer groups. We know that if our top performing restaurants can reach our expectations and guest attribute levels of excellence, so can the rest of our system.”

He said customers had been giving the brand high marks for changes like the new Garden Bar that was rolled out systemwide in mid-January after testing in several markets last year. It features 55 ingredients, which is nearly double the number of items previously offered.

The Garden Bar, he said, appears “to be a very good move and allows us to position ourselves a little differently in the marketplace.”

The company on July 10 also began testing a new lunch menu at 29 restaurants. 

 “The new menu has a simple one-page design,” Hyatt said, and it “includes new items and combinations at more desirable price points.” The smaller menu also allows Ruby Tuesday “to be faster in that critical time-sensitive lunch day part.”

Competitor Chili’s Grill & Bar has announced it will reduce its menu by 30 to 40 percent in September to increase service speed as well, that Brinker International Inc. division said earlier in the month.  

Ruby Tuesday is also testing delivery with Amazon in eight restaurants, Hyatt said, adding that the delivery pilot was to test the mechanics and execution of third-party delivery.

“It is a little expensive,” he acknowledged. “There's a bite of the apple there, for sure. It seems to be something that every brand is going to have to measure right now, which I think you see some of the brands determining that they want to make that an internal mechanism instead of using a third-party.”

For the fourth quarter ended June 6, Ruby Tuesday narrowed its loss to $8.7 million, or 14 cents a share, from a loss of $27.6 million, or 46 cents a share, in the year-ago period. Revenues declined 8.8 percent to $254.9 million from $279.3 million in the same quarter a year ago. 

Fourth-quarter same-store sales declined 1.6 percent, compared to a 3.7 percent decline in the same period last year. Sue Briley, Ruby Tuesday chief financial officer, said traffic was down 2.9 percent in the quarter and checks were up 1.3 percent. 

As of June 6, Ruby Tuesday had 605 restaurants systemwide, of which 543 were company-owned.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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