Goodbye Ruby Tuesday?

To use a clichéd musical-themed pun, we could soon be saying goodbye to Ruby Tuesday. The Tennessee-based bar and grill restaurant chain announced this past March that they would be putting themselves up for sale or a potential merger. The unsurprising announcement comes after years of declining sales and location closures for the brand that thrived in the 1990s and early 2000s. Ruby Tuesday has not seen a year of growth since 2011 and approximately 100 locations closed in 2016 alone. The chain had also recently taken to selling certain locations to investors in sale-leaseback deals, foreshadowing the brand’s desperate move to come. More than anything, the sale of Ruby Tuesday signals an end to the reign of the casual dining category of the food industry.

Ruby Tuesday can’t seem to resurrect itself.

Unfortunately for Ruby Tuesday’s executives, the announcement also comes after years of attempts at menu innovation and risky marketing decisions. In 2016, Ruby Tuesday gained a new CMO and re-focused their advertising efforts on targeting families, especially millennial moms; in previous years, the brand had tried to do away with their focus on the family and move to a more adults-only aesthetic, even going as far as to remove diaper-changing stations from restaurant bathrooms. This attempt at brand revitalization resulted in removing advertising dollars from television completely, choosing instead to focus on paid social advertising and online video with Hulu and YouTube.

The nontraditional move was risky but allowed the struggling restaurant chain to geo-target their advertising to areas surrounding their locations, specifically reach their chosen audience and tell more emotional visual stories than a mere 30-second television spot could ever allow. 2016 also saw Ruby Tuesday honing in on their Garden Bar, a self-service salad bar, in advertising. There was an introduction of new, fresh Garden Bar ingredients, better to serve the moms the brand desperately wanted to appease. For all of their risk, it seems that the brand’s moves did not result in much reward.

Ruby Tuesday’s attempt to reinvent themselves is a great example of marketing trial and error, but it also signals trouble for the casual dining industry as a whole. Similar restaurant chains like Olive Garden and Applebee’s are struggling as well, though those brands have not made such brazen attempts at menu and marketing changes like Ruby Tuesday. Both still favor a heavily TV-focused media rotation, insisting that inundating consumers’ screens will work in their favor, and rely on limited time offers and slashed prices in order to attempt to make a splash in a dining landscape that currently favors fast casual restaurants and healthy food trends.

You wouldn’t exactly go to Olive Garden and eat their bottomless breadsticks if you were looking for a healthy place to eat out with your family, but a “two entrees for the price of one” deal can only do so much to convince you otherwise.

How casual dining can survive a changing industry.

So, were Ruby Tuesday’s last-ditch attempts to make a profit worthwhile? Yes and no. The re-focus on family dining and adding new ingredients to the Garden Bar menu prove that the brand wasn’t willing to go down without a fight.

The move away from traditional advertising and increased efforts in paid social advertising were innovative and forward-thinking, particularly because TV commercials are a familiar and effective way for brands to reach a wider audience and straying from that tried-and-true model will always be perilous. However, those risks might also have contributed to the chain’s demise. Other casual dining restaurant chains have stayed the course, choosing to put the majority of their ad dollars in television and not make drastic changes to their menus.

Those chains are still open for business, though they might soon follow in Ruby Tuesday’s worn footsteps. In February 2017, Applebee’s posted their sixth straight negative sales quarter and in March their CEO was ousted. Bloomin’ Brands, which owns casual dining chains Outback Steakhouse and Carrabba’s Grill, recently announced plans to close 43 locations after a rough 2016. Though brand reinvention wasn’t to be for Ruby Tuesday, perhaps other troubled chains could take a few notes from their demise and, at the very least, go down swinging

The paradox of choice and missed opportunity

Watch new guests walk into your restaurant and stare at the menu. Do they scan quickly and nod or do they drift across the options, mouth dropping open?

In 2004, Barry Schwartz wrote Paradox of Choice, in which he proves that more options can actually reduce the quality of the customer experience (which was not yet a buzzword). This theory explains the growth of fast casual restaurants. The concepts are simple to understand, the menu is void of the clutter that QSR and casual dining brands have added over the years to keep up.

While choices are necessary to fight the veto, too much choice confuses guests and weakens their understanding of the concept. As Zac Painter, VP of Marketing at Fatz Cafe told F&RM, during the great recession the brand had added a Chinese chicken salad to its menu of home cooked southern classics. The item has since been removed from the menu.

Options like these create confusion for the guest. It’s why Chick Fil A and In-N-Out Burger continue to succeed. Customers know what they come in for, and the brand doesn’t make them search to hard for it.

choice, veto, menu
Four food items, three of which are hamburgers. How’s that for choice?

That’s not to say that every brand should restrict choice to less than ten items. But a key point here is that brands like these offer streamlined menus, and execute on every item. Can you even imagine the wait at In-N-Out if they added more items?

Look at the top growth brands and you’ll see that they all have simple menus in common. Chicken brands like Zaxby’s and Raising Cane’s keep the menu options tight and reap the benefit. Guests crave chicken, they go to a place that executes what they have on their mind.

When guests order from a busy menu they aren’t thinking very logically about making the optimal selection. That’s just not how we’re wired. Instead, in an environment scattered with choice, they simply try to meet the requirement of the task – choose something.

Being overwhelmed by choice can leave people feeling lonely and even depressed, according to Barry Schwartz. Not exactly the aim of hospitality. People are looking to choose but don’t know how to make the choice.

But this harried execution of selection leads to a state that Schwartz calls ‘missed opportunity.’ This happens when they realize they chose something they didn’t really want, or later find a selection they believe would have been more satisfying. This also creates a bad brand experience because they feel that they ‘ordered the wrong thing.’

Of course brands like The Cheesecake Factory deliver on a menu as thick as a phone book every day. There will always be exceptions to any rule. For whatever reason, that brand has driven loyalty by offering tons of choice – even on the dessert menu. This is because, like Chick Fil A and Raising Cane’s, they execute every time.

It is hard to make the wrong choice. But most restaurants are not The Cheesecake Factory. To simplify on execution, simplify the menu. As a brand, there shouldn’t be a wrong thing to be ordered. There shouldn’t be that Chinese chicken salad.

Three Steps for an Applebee’s Turnaround

Applebee’s recorded a 7.2% drop in Same-Store Sales (Fortune) in the 4th quarter of 2016. With the end of Q1 of 2017 looming, my assumption is that it’ll be their 7th consecutive sales decline. With the recent resignation of DineEquity’s CEO and the hiring of iconic ad agency Grey, Applebee’s is no doubt gearing up for its attempt at a turnaround. Yet without three essential steps, Applebee’s will continue their downward trajectory.

Develop a tighter, more defined brand.

I’m not talking about a tagline like Neighborhood Grill and Bar. I mean actually define why you exist and your largest point of difference from your competition. When thinking about some of the brands in the casual dining category some have done a fairly decent job at differentiating to the consumer. Think Buffalo Wild Wings, Red Robin, Outback Steakhouse. Each brand has a theme.

What does Applebee’s specialize in? It’s not clear.

I’m not here to say that these brands are thriving and setting the pace for the restaurant industry, but remember that casual dining as a whole has had a rough two to three years and you have to give me a better reason than value alone for me to choose to dine at your restaurant. The brands above do that. This leads me to my next point.

Focus on your differentiator.

The brands mentioned above will always be on my shortlist if I’m thinking about or craving wings, burgers, or steaks. They deliver on what I’m craving and are established as specialized and innovators in what they specialize in. I can’t think of one thing Applebee’s specializes in. Nothing stands out for me. Even competitor TGI Friday’s while not specializing in a specific dish, is differentiating with its endless apps, which the company announced will be a permanent part of the menu.

Applebee’s is “famously” known as a grill and bar. So I was surprised when looking at their menu and there were stir-frys, pasta, tacos, and something called a fajita rollup. Hey, at least there wasn’t any Kale on the menu!. The menu read more like a Cheesecake Factory menu than Applebee’s. You’re a bar and grill. Give me fun, straight forward bar food. In today’s restaurant landscape, this would differentiate. I don’t want a caprese mozzarella burger from you, ever. Or a burger with an egg on it for that matter. Master the basic things that people love about bar food. You don’t even have onion rings as an appetizer!

Put the website to work.

Applebee’s website looks like it’s from 2006. There’s very little food imagery so there’s no craveability being created. The homepage isn’t responsive so it’s difficult to navigate to other pages on the website and the menu is filled with images of dishes shot at a distance, so it’s hard to see what a dish actually looks like. A website isn’t the most important channel for a restaurant brand but they need to improve the basics to get on the same level as their competition.

If Applebee’s takes these simple steps and give their audience a reason to come back and try them again, they have a chance to turn their slump around. It’s time for their people to listen to customers and vendors.