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Ruby Tuesday goes upmarket (sorta)

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According to Nation’s Restaurant News, Ruby Tuesday has reworked their menu to grab a share of the upper demographic. They have, however, hedged their bets in a fashion similar to what we’ve seen in the high-end steakhouse market – the judicious use of cocktail discounting. They have also avoided dropping the value portions of their menu.

The article points out that Ruby Tuesday is also focused on the financial side of things as well, working to buy down its debt load. This is a focus that smart restaurants are focusing on in these lean financial times. It seems counterproductive, throwing money at debt while sales and profit margins shrink. But it’s a wise strategy, a strategy that has been woefully lacking from the initial business plans of many a startup.

I worked for a company who had this sort of plan from the start. They paid off their first restaurant in just under 5 years; their second in just short of 7 years (this location was in a high-rent district). Their original restaurant is now over 15 years old and has been basically free of debt for 3/4th of that time.

Aspiring restauranteurs should take note. 

Ruby Tuesday aims to serve both value and luxury in upgraded menu

by Marc Brandau

MARYVILLE, Tenn. (Nov. 11, 2009) After two years and $100 million worth of rebranding efforts, Ruby Tuesday has an upgraded, modern look and a menu with more than 27 new premium items. But just because the 896-unit casual-dining chain is targeting a more upscale demographic doesn’t mean it’s trying to be more exclusive.

On the contrary, said Andy Scoggins, vice president of culinary and beverage, the point of Ruby Tuesday’s new menu, launched last week, is to grow profitability through increased traffic, not just menu price hikes.

“We’ve already had the shift in our target demographic,” Scoggins said. “We knew the changes would get us into a little higher-income groups, about $50,000 to $75,000 a year. We’ve come through that shift, and we’re hitting on that demographic now.”

Focusing on a more upscale clientele hasn’t prevented Ruby Tuesday from also developing value-focused promotions, however.

One upgrade meant to combine value and premium quality is the chain’s new $5 cocktail program, offering not only Ruby Tuesday’s 17 signature drinks but also any of its premium well liquors — including Bacardi and Beefeater — for that ubiquitous price point.

Read the rest of the article here:
 
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