Red Robin Could Close Up to 70 Underperforming Stores by 2030, CEO Says Brand Searching for Profitability

During an earnings call on Feb. 26, Red Robin CEO G.J. Hart was enthusiastic about the company’s future, despite a relatively weak year for the chain as a whole.

According to Restaurant Business, Red Robin’s total revenue tumbled by $54.5 million and net income ticked downward by $77.5 million. On the other hand, there was something of a silver lining present in the brand’s 2024 figures: Customer satisfaction increased by 8%, and traffic was up by 6%.

There was also a bit of good news concerning the company’s EBITDA, according to Hart.

“The last two years have been transformational years for Red Robin, and I’m proud to say we began to see the benefit of our work as we progressed through 2024, culminating in a 600-basis point improvement in traffic trends from the first quarter of the year to the fourth. We also gained traction in our cost-saving initiatives to translate our top-line momentum during the fourth quarter into a 19.0% increase in adjusted EBITDA. While financial results for 2024 fell well below our original expectations, we’ve made substantial improvements to the guest experience and believe we still have a significant opportunity ahead of us to reach the full potential of our iconic brand,” he said, per a company press release.

“As we look to 2025 and beyond, our team will focus on two key priorities: bringing guests back into our restaurants for moments of connection over craveable food that only Red Robin can provide and an accelerated effort to gain efficiency in our operations and deliver growth in restaurant and corporate-level profitability while maintaining the improved guest experience that we have developed over the past two years,” he added.

Red Robin Store Closures To Begin in 2025

As part of that search for profitability, Red Robin outlined plans to shutter up to 70 underperforming stores nationwide. Between 10 and 15 Red Robin locations will cease operations by the end of 2025, and by the end of a five-year closure plan, a total of approximately 14% of the company’s existing 500 restaurants will be shuttered.

Restaurant Business indicated that these underperforming stores have been a serious headwind fighting against the company’s overall success story. In 2024, those stores delivered a restaurant-level operating loss of about $6 million, and as Restaurant Dive suggested, that sum exerted a 210-basis-point drag on said profit.

In terms of the execution of the company’s North Star plan helmed by Hart, which is two years into its rollout, the results have seemingly been quite positive. The Red Robin Royalty loyalty program relaunch attracted 1.5 million new members in 2024, with the program now boasting nearly 15 million members across the U.S. Guest data capabilities are targeted for a beefing up, allowing the loyalty program to be further leveraged to deliver personalized offers and promotions.

Finally, Red Robin’s Managing Partner Compensation Program is now fully operational in locations from coast to coast. Managers now function as “partner and owner of their restaurants,” per Restaurant Dive, something that Hart declared was the basis of a “unified goal of driving both traffic and profit dollars.”

“We’re expecting to see continued benefits from the program as we move through 2025,” the CEO concluded.