Red Robin CEO on what’s next for the restaurant industry

Red Robin Gourmet Burgers Inc (NASDAQ: RRGB) CEO Paul Murphy joined CNBC’s “Squawk on the Street” on Friday to share his views on what’s next for the restaurant industry and discuss the company’s gameplan for summers, by when the COVID-19 restrictions are likely to be lifted.

CEO Paul Murphy’s comments on CNBC’s “Squawk on the Street”

To be fully staffed by summers and stabilise staffing regulations, Murphy said the company has simplified its training programme and made application, hiring, and onboarding efficient. According to the chief executive:

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“There is a bit of a shift in the workforce. Before the pandemic, restaurants focused on hiring people with prior experience. But now, we have a lot of first-timers in the industry, and we wanted to make it less frustrating for them.”

Red Robin recently implemented a new wage progression programme that lays out the schedule for pay increments for the new hires. Leading to more transparency, Murphy said, it has helped the company improve retention. Every week, he added, Red Robin is now receiving more applications, and the group’s conversion rate has jumped almost 100% compared to before the pandemic.

Red Robin recently added three virtual brands to its system

Commenting on capacity, CEO Paul Murphy further said on CNBC’s “Squawk on the Street”:

“We are lagging in the industry a bit. In the first quarter, we were at 48% as of the end of period five which we just reported. Outside of the first quarter, we were at 65%. But the capacity is increasing, and from kitchen capacity standpoint, we see no issues.”

Red Robin recently added three virtual brands, after which, it stress tested the kitchen to evaluate the ultimate capacity.

“The good news is that even as we’re reopening dining rooms, and adding the virtual brands, and maintaining a sustained off-premise sales level, the kitchen capacity was sufficient to support all of that.”

Red Robin opened at $36.31 per share (£25.59 per share) on Friday and slipped to $34.69 per share in the next hour. At the time of writing, the stock has recovered to $35.73 per share versus $18.43 per share at the start of the year.

The American chain of casual dining restaurants performed largely downbeat in the stock market last year, with an annual decline of close to 40%. At the time of writing, Red Robin Gourmet Burgers is valued at $561.42 billion.