Under pressure from investors to initiate actions to turn around its economic status, the chain of casual restaurants earlier this week reported a 37% increase in profits for the 4th quarter of 2009. However, it is planning a 1.5% increase in menu prices in April to offset projected cost increases.
Also, the chain has been adding drink and appetizer specials at its bars, where performance has been way down. The industry average for casual dining spots is 14% of total revenues. Red Robin had been at 10% some years ago, but has dipped to the current low of 6%.
Red Robin also has launched early- and late-night happy hours, plus redesigned menus and point-of-purchase materials to highlight both alcohol and non-alcoholic beverages and promotions. For every 1% increase in its alcohol sales mix, the chain would expect to see a $6 million increase in profit, the company says.
In addition, Red Robin is planning a series of limited-time offers (LTOs) beginning Monday, with the launch of a Prime Chophouse Burger with horseradish-sauteed mushrooms, onion straws and melted provolone for $6.99. The promo will be coupled with the promotion of a “full margin” spicy avocado chicken wrap, and other promos will include new Cheesecake Bites desserts, served with strawberry or chocolate dipping sauces.
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