A new day for Ruby Tuesday?

On the way to South Florida on a recent weekday, Sandy Beall sat down for a lunch of burgers, crab cakes, guacamole, fish, chocolate cake, ice cream and tiramisu.

Why not show off the menu?

Over the past few years, Beall, founder and CEO of Maryville, Tenn.-based Ruby Tuesday Inc., has presided over a dramatic remake of the 900-restaurant chain. Four years ago, the typical Ruby Tuesday had Tiffany lamps and roller skates hanging on the walls and sold lots of burgers and beer. Now, the company is trying to cope with the decline of the casual dining category by changing its approach.

Ruby Tuesday has upgraded its menu in a bid to break out of a ferocious competition with Applebee's, Chili's and T.G.I. Friday's, with which it is often compared. In Atlanta, where it has about a dozen restaurants, Ruby Tuesday has rolled out or plans to introduce new mahi-mahi, salads, garlic cheese biscuits, steaks and trout.

In the summer of 2008, in the midst of an economic downturn, Ruby Tuesday worked on a $100 million project to renovate the interior of its restaurants. It was a risky move, especially given the chain's small size relative to larger competitors Applebee's and Chili's. Then, as now, there is the possibility that any gains will be a zero-sum game, as the crowded category continues to shrink.

But for now, Beall accentuates the positive. He brags about improved glassware, crab cakes made from $16-a-pound jumbo crab meat and the sleek all-black uniforms of the wait staff. (No more jeans, he points out.) The company now sells more seafood than burgers and is adding staff to its restaurants to improve customer service, which Beall believes must improve if the company is to move into more lucrative territory.

"You'll see the difference," Beall said over lunch. "We totally changed the food, totally changed the look and really changed the management of our entire staff."

Q: Are customers noticing the changes?

A: Yes, they are already noticing. Our sales have beaten the industry for the last five or six quarters now, so they're noticing it. We still have a long way to go, because we don't advertise too much. It's a five-year process, I figure, but we're getting traction.

Q: Will the menu changes be constant?

A: Constant. In the last twelve months or so, from the end of this summer to a year ago, we'll have rolled out a four-course Sunday brunch. We'll have rolled out a significantly better beverage program, with premium liquor and all fresh juices and mixes. We rolled out five lobster entrees, the best lobster you can buy from Boston and the northeast. We've got steak and lobster specials for $14.99. There's probably more I'm not thinking of. It's just nonstop. Our ultimate goal is to deliver a $25 experience for a $15 check. Today, we're probably delivering a $15 experience for $12. Our goal is to elevate that.

Q: How challenging is the U.S. restaurant industry right now?

A: I think in restaurants across America, casual dining is probably overbuilt by 15 percent. Demand has gone down so much and yet you have the same number of restaurants, which was overbuilt anyway. As demand fell over the past six or seven years, people just kept building restaurants. I hope over five years it gets back in balance. Demand has been falling for five, six, seven years, and it really fell in the last 24 months.

Q: Are you guys planning to open restaurants or are you hunkered down?

A: I haven't opened a store in a couple years. I'm actually opening two this year. But you shouldn't be opening restaurants. We're spending all our time and money in making what we have better. We spent about $100 million just remodeling. We're investing in service. Our food costs are higher than they used to be four years ago, because we've invested in lobster. We sell lobster for $16.95. A fine dining restaurant is selling that for $39.95. I can't charge my customers that, but it's the same lobster.

Q: When did you realize the roller skates on the wall weren't working for you?

A: About five years ago. We realized Applebee's and Chili's and Ruby Tuesday all kind of looked the same. And since we didn't have the budget -- Applebee's is No. 1, Chili's is No. 2 -- we thought if we're going to win this war, demand's coming down and there's more and more restaurants and everybody's the same, who's going to lose? It's going to be the small guys. We learned real fast that we needed to differentiate ourselves. In a crowded, maturing marketplace, we concluded that it was imperative that we differentiate our brand and improve the quality and eventually be able to get a higher check so we could pay our people more and thus execute at an even higher level.