Red Robin Plans to Close 70 Locations Amid Financial Struggles

SEATTLE – Red Robin Gourmet Burgers is considering closing up to 70 underperforming locations across the United States and Canada as it seeks to navigate financial challenges and enhance operations. The announcement follows a disappointing fiscal year 2024, during which the chain reported a net loss of $77.5 million, significantly larger than the prior year’s loss of $21.2 million.

The decision to potentially close locations comes as the company struggles with rising operational costs and declining revenues. In a Wednesday release, Red Robin stated it is evaluating the performance of various sites and expects many closures to coincide with expiring leases. CEO G.J. Hart mentioned that up to 15 restaurants could close in 2025 alone.

Red Robin’s total revenue for 2024 was approximately $1.25 billion, which marked a decrease of $54.5 million compared to 2023. Hart acknowledged these results and stated the company has made “substantial improvements to the guest experience” to revive traffic to its establishments. Despite some recent improvements in customer engagement, the restaurant chain has not yet regained its pre-pandemic success.

During a financial call last week, Hart noted a 600 basis-point improvement in traffic trends from the first quarter to the fourth quarter of 2024 but highlighted ongoing challenges. “While our improvement has been substantial, we have not yet reached the potential of our iconic brand,” he said, expressing optimism for 2025.

The restaurant industry, which anticipated a recovery in consumer spending post-pandemic, has instead faced declining traffic as many consumers continue to opt for home dining due to inflation and rising living costs. Other well-known chains, such as TGI Friday’s, Denny's, and Red Lobster, have similarly filed for bankruptcy protection or closed locations to adapt to the changing market.

Hart confirmed that Red Robin is exploring options to stabilize its financial situation, including selling three properties to generate around $5.8 million for debt repayment and operational costs. “Our focus is to better our efficiency and grow profitability,” he added, emphasizing the importance of improving the customer experience to drive better outcomes.

Jon Taffer, host of the television show “Bar Rescue,” expressed his views on the broader restaurant industry issues that are contributing to the current wave of restaurant closures. Taffer cited the lasting effects of the pandemic, inflation, staffing shortages, and changing consumer habits due to diet trends as critical factors.

“Many businesses are still recovering from the debts incurred during the pandemic,” Taffer said during an interview. He described the current challenges as a combination of economic pressures and evolving consumer preferences, stressing the need for restaurants to adapt to stay relevant.

As Red Robin navigates through these trials, the company remains committed to enhancing its offerings and customer service while seeking ways to balance its financial books. Updates regarding specific locations targeted for closure are expected in the upcoming months.