Happy lobster trails: So long Red Lobster, we probably won't miss you

05/22/14 by Rennie Detore

The once popular restaurant chain, Red Lobster, is barely staying afloat, and that distinction, coupled with sagging sales, has the brand on the selling block.
Darden Restaurants owns Red Lobster, and the company is no longer interested in keeping the once promising restaurant and instead sold it off to Golden Gate Capital for a little more than two billion dollars, reportedly just enough for Darden to pay off its debt from years of stagnant revenue from Red Lobster restaurants.
Unless you had access to the profit and loss information of Red Lobster, you could easily make the incorrect assumption that Red Lobster was doing just fine. Plenty of colorful, energetic television commercials masked the problems the restaurant chain had been having, including appealing to more of an older crowd and failing to capture the feel of a family style eatery.

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Another restaurant chain owned by Darden, The Olive Garden, is doing better than its seafood counterpart, and a lot of that has to do with how the Italian restaurant is promoted and marketing versus Red Lobster. The Olive Garden is sold as a place for families as well as the ubiquitous all you can eat bread sticks and salad to get consumers through the door.
Red Lobster failed to create a niche for itself beyond all you can eat shrimp, which arguably isn't as all encompassing as a full course Italian meal, salad and bread. Olive Garden also hit a nerve with customers by centering its efforts on price points that appealed to families, such as pasta bowls for under $10 bucks.
Conversely, Red Lobster is selling its expensive seafood menu for close to $20 per plate.
But perhaps the hardest aspect of Red Lobster to swallow and the one part of the chain that failed to keep it current isn't so much the fault of the restaurant but rather a sign of the times as far as how we eat.
Darden is telling anyone who will listen that Red Lobster or any sit down restaurant for that matter struggles against the likes of higher end fast food spots like Five Guys, Chipolte or Panera Bread. These places offer a quicker, equally scrumptious alternative to sitting down and paying double.
That point certain seems valid, but Red Lobster became lost at sea from a sales standpoint years ago with failing to change its image or do anything to garner new customers. Showing food being made or touting shrimp isn't going to come up big enough for any chain, most notably Red Lobster.
Also, Red Lobster again is already fighting an uphill battle as being pigeon holed as being a place for seafood lovers. Anyone ever order a steak or chicken at Red Lobster? Probably not.
That's why Darden still is drooling over its Olive Garden and Texas Longhorn chains since they're more universally appealing than Red Lobster. Those places also are struggling but not as badly and offer a little more of an eclectic mix of food choices.
Red Lobster certainly had its moments but the combination of lesser expensive spots and zero new customer growth means the once lauded lobster shop won't be around much longer.

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