Ruby Tuesday is hungry to get diners to come back to its restaurants. The casual dining behemoth has been grappling with sagging sales and waning foot traffic for more than two years, and an earnings report on Thursday only continued that bleak pattern: The company said sales sank 4 percent at its restaurants open more than a year.
And so the chain is seeking salvation — at the salad bar.
While restaurants such as Wendy’s ditched their salad bar years ago, Ruby Tuesday has stuck with the concept. And it is now betting that it can be an anchor of a turnaround for a restaurant that’s been battered by new competition and outmaneuvered by one of its oldest rivals.
As of January, all 607 of Ruby Tuesday’s locations were outfitted with a revamped “Garden Bar,” the hipper-sounding name the chain has long used for its make-your-own salad station. The restaurant has spent months working on an overhaul of the offering, taking it from 36 items to 58 and adding trendier ingredients such as kale and edamame.
This may not sound like a radical shift, but it’s clear that Ruby Tuesday is thinking of it that way. On a Thursday call with investors, director F. Lane Cardwell Jr. called the salad bar revamp the “biggest change we’ve made to our brand in the last decade.” At a conference in January, David Skena, the company’s chief marketing officer, said, “we’re essentially a hot new salad concept with a full menu on the side.”
The chain is pulling out all the stops to try make this work, launching a marketing blitz that includes national TV advertising. In particular, it is hoping to attract women and families — groups it says it needs to do better with if it is to stage a comeback.
On paper, staking its bets on the Garden Bar is an entirely logical strategy. For starters, people increasingly associate freshness as being synonymous with healthfulness. The salad dressings are house-made, another characteristic that many consumers now take as a cue that what they’re eating is good for them. Plus, a salad bar meal is customizable, and you don’t have to look far across the restaurant industry to see how attractive that idea is these days: Sweetgreen, Roti, Cava Grill, Blaze Pizza — all of these buzzy fast-casual concepts are centered around the idea of letting people build their own entree.
Executives said Thursday that the Garden Bar revamp has gotten “positive feedback” from guests, and the company expects it will soon contribute to improvements in sales and traffic. And yet there’s no clear bounce from it, at least so far. Ruby Tuesday still sees roughly the same share of diners using the Garden Bar during their visit as before the launch, and the weak sales and traffic numbers don’t exactly suggest that this is a game-changer.
It’s still early, but this could reflect a hard truth for Ruby Tuesday: Salad bars feel like a vestige of another era. They conjure that moment in the ’90s when seemingly every casual chain restaurant was outfitted with Tiffany-style stained glass lamps and festooned with quirky antiques and beat-up license plates. It could prove hard to win over millennial diners over with a format that feels like a throwback.
If the salad bar makeover isn’t a hit, maybe some of Ruby Tuesday’s other changes can still add up to improvement. It has slashed the number of items on the main menu by about 30 percent, a move aimed at speeding up orders in the kitchen and improving the accuracy of what reached customers’ plates. It is remodeling restaurants, trying to give them a more contemporary vibe.
It’s clear that investors are losing patience, though, as they sent the stock down more than 10 percent in morning trading on Friday.
All of this suggests that Ruby Tuesday’s new chief executive — Jim Hyatt, a veteran of Church’s Chicken, Cosi and Burger King — has a tough task ahead of him. For one, he has to hit the ground running against a backdrop of uncertainty, as the company announced last month that it is exploring strategic alternatives, including a possible sale.
And the big-picture trends don’t look good: Casual sit-down restaurants have generally struggled to connect with diners as fast-casual upstarts provide intense and fast-growing competition.
That said, one of Ruby Tuesday’s key competitors offers evidence that it’s not impossible to cut through the noise. It wasn’t long ago that Olive Garden was in a serious rough patch: Sales were disappointing, and an activist investor slammed the restaurant for moves such as not salting its pasta water. But Olive Garden has shown significant improvement, in part by overhauling its menu and embracing contemporary dining preferences. Olive Garden is going big with its carryout business, for example, which allows it to compete more directly with fast-casual chains and grew a robust 17 percent in the most recent quarter.
Olive Garden’s journey shows there is a path for success casual dining chains in 2017. Now Ruby Tuesday just has to find one of its own.