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Ruth’s Chris CEO: 7 new leases signed for restaurants in next two years

Ruth’s Chris Steak House has seven new leases signed for restaurants over the next two years.
Ruth’s Chris Steak House has seven new leases signed for restaurants over the next two years.(Red Huber, Orlando Sentinel)

Ruth’s Chris Steak House has seven new leases signed for restaurants over the next two years, the Winter Park company’s CEO said Monday.

Cheryl Henry, CEO of Ruth’s Hospitality Group, announced the growth during a presentation at the ICR Conference taking place this week in Orlando. Ruth’s Chris, which also opened a relocated Washington D.C. restaurant on Monday, has nearly 160 restaurants.

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It wasn’t the only steak restaurant expansion discussed Monday at the conference, where public and private companies connected with investors, bankers, analysts and media members. Gene Lee, CEO of Orlando-based Darden Restaurants, discussed LongHorn Steakhouse’s growth after that brand saw same-restaurant sales jump 6.7% in a recent quarter.

“We don’t know what the limits are for LongHorn,” Lee said. “I do think that we can add somewhere between 15 and 20 restaurants a year, continue to build on this.”

LongHorn had 518 restaurants in November.

Both Ruth’s and Darden, which has about 1,800 restaurants including Olive Garden and LongHorn Steakhouse, addressed off-premises business during their presentations.

The trend toward takeout and delivery could continue this year as the Summer Olympic Games and political debates could mean customers stay home, analyst Peter Saleh, of BTIG, wrote in a report.

The summer Olympics and political debates could mean more people order delivery or takeout in 2020.

“We launched this year online ordering,” Henry said. “People can now order online, in advance, sides-to-go, for any occasion. It was live for Thanksgiving. It was live for Christmas, and it’s live now.”

She said Ruth’s Chris offers delivery in 20 markets.

“We are in delivery," she said. “It is not going to be as meaningful for this high human touch brand as it may be for a different brand.”

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Darden Restaurants prefers to focus on its takeout and large-party catering business instead of using a third-party delivery service like Uber Eats or DoorDash.

“We don’t really want to have to pay a third party,” CFO Rick Cardenas said.

When outside delivery services started, restaurants were charged about 30% in addition to what customers were charged for delivery, restaurant analyst John Gordon previously told the Orlando Sentinel. Large restaurant chains are working to negotiate that down.

Lee said in December the company is looking to improve takeout for customers. It’s investing money in restaurants for the space and equipment to handle additional demand. Lee called it a “big effort” over the next 12 to 18 months.

On Monday, he also addressed Cheddar’s Scratch Kitchen, which has seen its same-restaurant sales fall every full quarter compared to the previous year since Darden acquired the chain in 2017.

He said he wants to see management turnover below 20% and employee turnover south of 80%. Cheddar’s had 166 company-owned restaurants in November.

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“We are trying to build a foundation to do this for the long term,” Lee said. “We are not in a hurry to just start adding units. We’re doing this under the cover of our whole portfolio. I want this to be a great, great business."

Contact the reporter at [email protected] or 407-420-5664; Twitter @afullerreporter

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