Ruby Tuesday is in a tough position and company officials hope to turn things around with a “relentless” focus on improving the customer experience.
During Monday’s fourth-quarter earnings call, Ruby Tuesday CEO Jim Hyatt discussed at length the problems the company faces with enhancing the guest experience foremost among them.
“Having now been a part of our Senior Leadership Team since April, I’ve spent a great deal of time at our restaurants with our team members and managers to determine the best plan of action for the Ruby Tuesday brand,” Hyatt explained. “In fact, I’ve experienced over 60 restaurant visits now in just the past four months, and I have experienced both the positive and the negative that our brand has to offer.”
It is only through these first-hand experiences, Hyatt noted, that he and the leadership team can fully understand needs to be accomplished in the months and years ahead “to make this great brand a great business again.”
Hyatt and his team, based on these learnings, developed a road map for success during the next 12 months.
“Our top three priorities are: One, dramatically improve the total guest experience; two, ignite same restaurant sales growth; and three, delivery system profitability,” he explained. “During the fourth quarter, we launched our spring fresh favorites campaign, focusing on our new Garden Bar as well as veggie filled dishes such as the California Primavera to drive awareness and trial. These efforts led to growth in average check during the quarter and increased traffic trends during lunch, which we attribute particularly to the Garden Bar, so following our first full quarter with our new Garden Bar, we continued to receive positive customer and operator feedback, and we are encouraged by how it is re-energizing the Ruby Tuesday brand.”
Improving the guest experience, though, stands head and shoulders above all other challenges.
“Over the past several quarters, the Ruby Tuesday leadership team has discussed the importance of the Fresh Start Initiative, which includes the new Garden Bar, new menu, and a new image,” Hyatt explained. “Although these initiatives are extremely important to the brand, they now fall into a larger and broader strategic initiative called the total guest experience. As an outcome of our extensive restaurant business and input from our guests, we are now assessing every aspect of our guest visit; from the hostess greeting until they drive off our parking lot. Our focus on dramatically improving our guest experience will be unrelenting and will establish the foundation of the brand for our quick turnaround as we move forward. We are developing, refining, and rolling out a 12-month operations calendar to enhance operational excellence to provide additional support through our marketing initiatives and promotions. We will have a relentless focus on improving the guest experience through better training and simplifying processes and back-house operations for managers and team members.”
Hyatt noted an “urgent but mentoring” focus on achieving progressive improvements on all guest experience attributes.
“Over the past three months, we have seen progressive improvement in guest scores on overall guest satisfaction, staff attentiveness, the taste of food, Garden Bar presentation, the pacing of the experience, and manager visibility, just to name a few of the attributes that we track,” Hyatt added. “Our goal is to seek continued improvement in all of these measurements throughout fiscal 2018 and deliver guest excellence at Ruby Tuesday with every check.”
Given its challenging vertical, how difficult will it be for Ruby Tuesday to make significant inroads regarding customer experience?
Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, told Loyalty360 that he is skeptical, at best, about the company’s chances.
“While Ruby Tuesday’s has stemmed some of the bleeding since its previous quarter, it still has a long road ahead and the outlook is rather grim,” Magliocca explained. “Shareholders should be encouraged that the company is focusing on value—increasing margins and earnings, but the total guest experience is hard to overcome.”
The problem is bigger than Ruby Tuesday, Magliocca said.
“It’s the same issue for Applebee’s, Buffalo Wild Wings and a dozen other casual dining restaurants,” he explained. “The customer pool is a desert compared to what it used to be five or 10 years ago. While Ruby Tuesday’s might increase market share, there isn’t much of a market to be gained right now. While most issues are cyclical, casual dining restaurants need to change their approach to younger generations if they hope to survive a challenging period.”