If you really want to know how the economy is doing, don’t look at Wall Street. Instead, look at Main Street, at those coffee and donut shops, burger joints, and delis.
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When times get tough financially, as they have for millions of Americans lately, eating out is one of the luxuries people cut first.
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And the data shows people are cutting back on meals away from home. In fact, a majority of restaurant owners (63%) said their same-store sales declined in February after a robust January, according to the March report from the National Restaurant Association.
Red Robin is known for its burgers and endless baskets of fries.
Image source: Shutterstock
Dining out is becoming a luxury
Even though the rate of inflation is slowing down, for now, consumers are still wary, especially since the cost of staples like eggs, meat, and cereal is still high.
Food prices rose 1.2% over the past year, with significant increases in beef (+3.0%), dairy (+2.5%), and cereal (+2.0%), according to the Bureau of Labor Statistics. The cost of groceries has been inching up continually for several years, and 2025 will likely see an addition 2.2% increase, according to the USDA’s Food Price Outlook.
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Some restaurants are looking for creative ways to get more people through their doors. Take Red Robin. The family-friendly burger joint recently announced an astonishingly good deal: the $20 “Burger Pass.”
For $20, customers could eat a burger and fries every day for the whole month of May. The offer was so popular it quickly overwhelmed and then crashed the company’s website before selling out.
Family-friendly burger chain closing locations, changing leadership
The Burger Pass was another effort by the company to reinvigorate itself. Two years ago the company announced a plan to update the brand, calling it a “North Star” reinvention plan. But equipment updates, intense staff training, and an expanded menu haven’t delivered the results the company hoped for.
Now the CEO who launched the North Star plan, G.J. Hart, is stepping down, effective immediately. Hart took the CEO role in 2022; in fiscal 2024, Red Robin saw a net loss of $77.5 million, up from $21.2 million in fiscal 2023.
Hart will be replaced by Board Chairman David Pace but will remain in an advisory role until September, according to a company statement.
“It has been a privilege to lead such an iconic brand over the last two-and-a-half years. Together we have made important strides in strengthening the essential foundation of great food and great service, and I look at our progress with immense pride,” Hart said in the statement.
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Red Robin has more than 500 locations in the U.S. and Canada, 90 of which are franchises.
The company also recently announced it would close 70 underperforming locations over the next five years, including between 10 and 15 in 2025 alone, focusing on closing those with expiring leases.
The locations that will close have not been announced but the Colorado-based company has 57 locations in California, 37 in Washington, and 18 each in Texas and Arizona, so there’s a good chance those states will lose some locations.
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