Red Robin Gourmet Burgers (RRGB) – One Company One Story

Welcome to another story and another video in my One Company One Story series.
This time, Red Robin Gourmet Burgers.

Here comes the amateur legalese.

I began investing in companies and their stocks in the late 70s, but am not a certified investment professional.

My style and history of investing is described in Dream. Invest. Live., a book I wrote by request – which came out as the Great Recession (the Second Great Depression) began. Bad timing, eh? https://www.amazon.com/-/e/B0035XVXAA

My personal finance blog (a blog about my finances) is: https://trimbathcreative.net/

I am not investment professional. This is not financial advice. 

This time it is about Red Robin, or more fully, Red Robin Gourmet Burgers (aka RRGB). 

Imagine a small place in Seattle a few decades ago serving something that everyone considered to be something simple and every day. They get known. They grow. They become an international phenomena. It worked for coffee and Starbucks. Why wouldn’t it work for burgers and Red Robin? It did and it didn’t, at least when comparing the crimson bird to the green lady.

Red Robin has not been as successful as Starbucks, but the company does have over 500 restaurants. 

Disclosure: I bought and sold my stock in RRGB about a decade ago. See that history at the link: https://trimbathcreative.net/?s=RRGB).

The idea is basic and simple: provide a place that is nicer than MacDonald’s, can serve drinks, but also is a good place for kids. If you dined there you may have heard their own Happy Birthday song. Birthday cakes and beer. Something for everyone.

I was impressed with the restaurants. They weren’t my style, but they were a better fit than most. Their mix of comfort food and clean casual dining was good for families, but also for informal business lunches. I like casual. I prefer to eat in quiet places, so I am more likely to go for a picnic than to be surrounded by sports broadcasts or amped music; but I invest in stocks based on what other people want. Evidently, people wanted burgers. OK. I’ll buy. 

The problem with simple business models is that they are easier to duplicate. I think Starbucks got such a head start because the investment community enjoyed laughing at it; then, no one could catch up. Burger joints are more expensive to start and operate, and easier to replicate.

I still like them, but haven’t eaten at one for years – and even then, someone paid for my meal. I moved to an island, so going to Red Robin involves a boat ride. Inconvenient, but living here is quiet.

A pandemic didn’t help, but even before then annual revenues were trailing down, not up. The uneven growth might explain the uneven stock price. Now, as people expect home delivery and some are protecting themselves by staying out of unmasked areas like restaurants, Red Robin continues to have challenges. Labor and food shortages as costs climb can’t help.

I’ll continue to cheer them on, but not as an investor and from a distance – unless I visit a mall, which I haven’t done this decade.

The video: