Did you know Red Robin offers unlimited free refills on more than 30 menu items?
The 500-unit casual-dining brand is betting most of its customers don’t. And it’s hoping to use those bottomless offerings to lure more people into its restaurants this year.
“For over 54 years, Red Robin has had bottomless sides and other menu items, but has not done a good job historically of telling people that,” CEO G.J. Hart said during an earnings call Wednesday, according to a transcript from AlphaSense. “Beginning in March that will change.”
That’s when the chain will kick off a $3 million marketing campaign focused on bottomless items like fries and floats. It’s part of Red Robin’s goal to outpace the industry on traffic growth this year.
The Englewood, Colo.-based brand is facing a number of headwinds on that front, some of which are by design. When Hart took over as CEO in late 2022, he began dismantling many of the prior regime’s strategies, including deep discounting and the use of virtual brands like MrBeast Burger. While that has helped profits, it has hurt sales and traffic.
Meanwhile, inflation-weary customers are continuing to watch their spending, ordering cheaper items or skipping dessert—a trend that has been noted by restaurants for months.
“You see people just managing their overall check, which is not surprising to us there,” said CFO Todd Wilson, according to the AlphaSense transcript.
All told, Red Robin’s same-store sales fell 2.7% year over year in the fourth quarter.
The chain has already worked to improve those trends by investing in staffing and menu improvements, which it said has translated to higher customer satisfaction scores. Now it will ramp up its marketing efforts as another way to promote value and get people in the door.
The bottomless campaign will include targeted digital marketing, a recent area of emphasis for Red Robin. It will also feature TV ads in six of the chain’s core markets.
Red Robin is one of several casual-dining chains touting value amid a tough economy. Chili’s, Applebee’s, Olive Garden and Red Lobster have all offered lower-priced or all-you-can-eat options over the past several years to appeal to price-sensitive guests.
That can be an effective traffic driver, as Chili's has found with its $10.99 “3 for Me” combos that are designed to rival fast-food prices. But offer too good a deal, and you might get burned: A $20 all-you-can-eat shrimp deal at Red Lobster led to steep losses at the chain.
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