Red Robin Expands in Philadelphia
Greenwood Village, Colorado-based casual dining restaurateur, Red Robin Gourmet Burgers Inc. (RRGB), is set to open a restaurant in Philadelphia shortly. The restaurant will add to the company’s more than 485 restaurants which it operates across the United States and Canada.
The company intends to contribute the restaurant’s first six days’ sales to the non-profit entity Alex's Lemonade Stand Foundation.
The restaurant, positioned on the south of the Cherry Hill Mall, will attract customers with its premium offerings and contemporary ambience.
In order to avoid market saturation, Red Robin is establishing its presence in several less-penetrated locations in the U.S. At present, the gourmet burger expert has about 29 units in Pennsylvania, which makes the state a relatively newer market for Red Robin compared to California which boasts as many as 88 restaurants.
According to the National Restaurant Association, Pennsylvania’s restaurants are expected to record $17.8 billion in sales in 2013, 4% of total projected sales in the U.S. High demand and spending ability of the state, which is also one of the most populous and fastest growing states in the U.S., are favorable to its restaurant sector’s growth. We believe these factors encouraged Red Robin.
The company has been on an expansion spree for quite some time. With improving consumer confidence, management has accelerated its unit openings and plans to unveil another 20 units in 2013, half of which have already been opened. This Zacks Rank #2 (Buy) restaurateur recently unveiled a restaurant in Paramus, New Jersey, another underserved market, where it operates only 10 units. We believe these openings will give a boost to the company’s sales.
Some other players in the restaurant industry which look attractive at present include Cracker Barrel Old Country Store, Inc. (CBRL), DineEquity, Inc. (DIN) and Bob Evans Farms, Inc. (BOBE). All the companies hold a Zacks Rank #2.
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