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Ruby Tuesday Steps Back From Upscale Positioning

Filed under Branding, Casual Dining Burgers, Pricing

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.

TV advertising once again promotes affordability.

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.

12 Responses to Ruby Tuesday Steps Back From Upscale Positioning

  1. My husband and I have been going on Wed nites to Ruby Tuesdays. The salad bar is awesome and I’m sure a big hit with customers.

  2. Jim Wordsworth

    Sorry to hear this. As a restaurateur and Nat Rest. Board member, my wife and I have touted Ruby’s as the industry’s best kept secret! The look, service, and cleanliness are refreshing compared to Friday’s, Applebee’s, etc. The wine list, chicken wings, salad bar, and vegetables are far superior to any competitors. Ruby’s leadership in health conscious dining and menu calorie counts much appreciated.
    Needed better and more marketing to its civil American style dining. Biggest problem is that nearly all stores have outside lights burned out/missing. Always give the manager a compliment, a card, and outside light comment. They don’t seem to feel ownership, as if it’s corporates problem!
    Sorry to see it step back into the crowded fray.
    Most sincerely and knowledgeably commented, Jim and Karen



  4. mike

    I used to work across the street from a Ruby’s back in the day. Many lunches and happy hours…and I remember $1 draft Tuesdays all day as well. Used to love going with the family, too, LOVED your all American cheeseburger and it was a consistent menu item that you could count on no matter which location you stopped in.
    Then Ruby’s went foo foo and the burger not only shrank but it was a totally different burger. After that, all that was left for me was the salad bar.

  5. Caroline W.

    I’ve been going there for years with my husband! We love their fresh salad bar and really delicious cheese biscuits! Don’t change these two and really appreciate their coupons!

  6. Having worked closely with this brand for several years, I am so impressed by their team’s ability to create a catering business for the business to business lunchtime opportunity. They have mastered the art of setting up salad bars on the boardroom table. Next time you have an opportunity, order their catering straight to your office!

  7. Ben C.

    I’ve eaten at Ruby Tuesday around four times over the last 20 years. There’s a reason for that. It has no specific appeal. There’s nothing about Ruby Tuesday that’s worth talking about. The menu tries so hard to appeal to everyone that it appeals to very few. Can anyone tell me what’s notably different about Ruby Tuesday than its direct competitors? And please don’t say it’s the salad bar. I like it too, but it’s no great motivator to get people to choose Ruby Tuesday over other restaurants. I can tell you one thing for sure, going from an upscale full-service restaurant to a casual full-service restaurant isn’t going to increase the customer count for the long-term. The new marketing campaign will temporarily increase sales, but sales will soon drop back down. The only thing all that marketing will do is remind people why they rarely go to Ruby Tuesday in the first place: it’s a ho-hum experience, easily forgettable.

  8. Eugenia B.

    I am definitely sad to hear about these Ruby Tuesday changes. I have my favorite steak and vegetables, and favorite “best wine” and I like knowing I can find this healthy combination as I travel around the country. I had avoided Ruby Tuesday for years and was happy with the step away from the noisy bar and grill atmosphere. Guess I will be looking elsewhere soon!

  9. Fran S

    Too bad. One more chain that has gone the way of “eat as much as you can for the least amount of money.” Hope they leave their great salad bar alone along with the low calorie sides and petite portions. we are not all gluttons.

  10. Rich

    How do these analysts tend to overlook the real reasons behind customer dropouts….”service…service…service!!!!”

    I cannot recall how many times I’ve gone to Ruby Tues and to endure..slow wait times…cold or undercooked food…infrequent replenishments of drinks…etc.

    Not that Ruby T. has the market cornered on lousy service by any means, its a problem affecting the entire industry because they tend to hire, well just about “anyone” for staff.

  11. Amanda

    I eat at Ruby Tuesday once in a while, hoping I will receive good quality food. Their food has that chain restaurant taste. I wish companies would buy from fresh local farms and prepare fresh food. Their biscuits I have been served are hard and seem old from yesterday. If people really enjoy this place they must not eat anywhere else. The food for me gets a 6 rating out of 1-10, 1 being bad and 10 being great.

  12. Andy C

    Well, after our latest visit to Ruby T as it now seems to be known we (4) were extremely disappointed to find the the salad bar as a “side” option had been removed in place of “you can add it to your meal” for $3.99.
    So…… rather than the four of us having salad only one added to their meal and was EXTREMELY disappointed.
    Now you look to the salad bar and there no-one or very few that we seen buying into this new feature.
    In our opinion, this is a very bad move…….. so much so, that I doubt if we’ll be rushing back to Ruby T any time soon.
    Just our thoughts.