Casual dining restaurant operator, Red Robin Gourmet Burgers Inc.’s (RRGB) unit expansion remains unruffled amid an uncertain economy. With the resurgence of consumer confidence, management has accelerated unit openings and plans to unveil 20 units in 2013, half of which have already been opened.
Red Robin, which currently boasts nearly 480 restaurants across the United States and Canada, is set to unveil a restaurant in Hagerstown, Md. on Oct 28. The restaurant, positioned at Valley Mall next to Halfway Blvd., will mark the company’s entry into Hagerstown. We believe the spacious unit with its signature food offerings like Royal Red Robin Burger and Red Robin's Freckled Lemonade will add to the company’s sales.
Though for the past few years Red Robin was only focused on strengthening its presence in the home market, California, citing plenty of opportunities, recently it has started exploring other potential markets. The Maryland market is newer and underserved for the company with only 15 units, as compared with California where it operates as many as 70 restaurants.
The restaurant industry contributes considerably toward the flourishing economy of Maryland — one of the most populous and wealthiest states in the U.S. Marylanders’ inclination toward eating out is favorable for the sector’s growth, which, we believe, has caught the attention of Red Robin. According to National Restaurant Association, Maryland’s restaurants are expected to earn $10.3 billion in sales in 2013.
In late September, the restaurateur opened a unit in Baltimore, Md. Positioned at the Inner Harbor area of downtown Baltimore near Canton Crossing, the outlet will beef up the restaurateur’s U.S. portfolio.
Red Robin holds a Zacks Rank #1 (Strong Buy). Other players in the restaurant industry that look attractive at the current levels include AFC Enterprises Inc. (AFCE), Bob Evans Farms, Inc. (BOBE) and Chipotle Mexican Grill, Inc. (CMG). All these stocks carry a Zacks Rank #2 (Buy).