Ruby Tuesday has taken off its ill-fitting suit, put its jeans back on and is ordering a cold one and a burger.
James J. “JJ” Buettgen, named president-CEO of Maryville, Tenn.-based Ruby Tuesday last November, told analysts he is continuing to dismantle the efforts by his predecessor—Founder Sandy Beall, who retired after 40 years at the helm—to move 786-unit Ruby Tuesday to a more upscale operation and market image expressed in its now-abandoned descriptor “Simple Fresh American Dining.” Buettgen carefully navigated the delicate matter of changing course, telling analysts that “repositioning out of the bar-and-grill competitive set several years ago was the correct decision.” However, “in our pursuit of a more upscale brand positioning we may have unintentionally overshot the runway,” said Buettgen, who had been SVP-chief marketing officer at Darden Restaurants (parent of Red Lobster and Olive Garden) before joining Ruby Tuesday. He believes the brand needs to move back toward the mainstream.
“Said differently, we believe the biggest strategic opportunity for us is to migrate the Ruby Tuesday brand towards a more casual and approachable positioning and experience that is appealing to a broader guest demographic and suitable for a wider range of dining locations, whether it be a fun night out for dinner and drinks with friends, connecting with family, date night or celebrating a special occasion,” he said.
In seeking to shift from its origins in the bar-and-grill category to a higher-price-point tier, Ruby Tuesday “may have moved a bit too far from its heritage and core guest base,” he said. Buettgen vowed to steer Ruby Tuesday toward becoming “more lively, approachable and fun.”
The back peddling is evident in Ruby Tuesday’s recent TV ads where pricing is emphasized. One TV spot promotes “Over 15 chef-inspired selections for under $15, starting at $9.99.” The past tagline, “It’s All Good Here,” is not used. One of the featured items is the $13.99 Smoky Mountain Chicken, an entrée with grilled chicken topped with smoky barbecue sauce, Cheddar and Swiss cheese and applewood bacon. That dish had been dropped from the Ruby Tuesday menu in the push for more sophisticated items. Now back on the menu, it is one of the chain’s top sellers, Buettgen said. The chain continues to offer nine beef, chicken or turkey burgers priced from $9.49 to $12.49.
Ruby Tuesday will downplay the emphasis on wines by the glass and bottle that Beall had orchestrated. A more mainstream focus on beers and cocktails will return.
The chain says it expects advertising spending to swell to $71 million to $75 million this fiscal year, compared with the $47 million it spent last year. This will be “incremental television advertising expense, which is largely funded by our cost savings initiatives and reductions in promotional spending,” according to the company release. the chain expects to distribute coupons valued at $60 million in the current fiscal year, down from $80 million the previous year. Durham, N.C.-based McKinney handles the account. A review seems possible once Ruby Tuesday fills the vacant chief marketing officer post.
Ruby Tuesday’s menu now is being overseen by new hire Mark Bibby, who joined last month as VP-Culinary & Beverage. Bibby previously was VP-Culinary Operations for Smokey Bones Bar & Grill.
Ruby Tuesday’s results for the quarter ended Mach 5, 2013, were disappointing. Same-store sales declined 2.8% at company Ruby Tuesday restaurants, 1.7% at franchised units. The company forecasts comp sales will be flat for fiscal 2013.
“We believe the initiatives we are working on will shift consumers’ perceptions of the brand toward a more mainstream, lively, and approachable position,” Buettgen said in a release announcing the quarterly results. “We have already introduced a handful of new menu items, and our current advertising and merchandising materials portray a more fun, casual, and affordable personality for the brand. As we broaden the brand’s appeal and make it relevant for more everyday occasions, we will be able to more effectively compete in the marketplace.”
Buettgen also is backing away from Beall’s expansion into non-core concepts. Ruby Tuesday previously announced it would close its Marlin & Ray’s seafood units, as well as well as its fledgling Truffles Grill and Wok Hay concepts. Although it is closing two company locations of the Lime Fresh Mexican Grill concept Ruby Tuesday acquired a year ago for $24 million, Buettgen says the company remains optimistic about the brand’s prospects.