Red Lobster: Getting All Dressed Up, but Where's It Going?

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Red Lobster Sold To Golden Gate Capital For 2.1 Billion
Justin Sullivan/Getty Images
By CANDICE CHOI

NEW YORK -- Red Lobster wants to be seen as a purveyor of quality seafood, so it's getting rid of some of its promotional discounts and stacking the food higher on plates, as is the style at fancier restaurants.

The changes mark the latest attempt by the struggling seafood to stop a years-long sales decline as it embarks on a new era. On Monday, Darden Restaurants (DRI) said it completed its sale of the chain to investment firm Golden Gate Capital, despite contentious protests from activist investors.

In his first interview as Red Lobster's new CEO, Kim Lopdrup outlined the missteps he thought his predecessors made and why he thinks Red Lobster can win back customers.

"At the end of the day, people are not going to go a Chipotle for their anniversary or their birthday," he said.

Sit-down chains like Red Lobster have been struggling since the economic downturn as people cut back on spending. Such chains are also losing business to places such as Chipotle Mexican Grill (CMG) and Panera Bread (PNRA), where people feel they can get restaurant quality food without paying as much. And Darden's recent attempts to spark turnarounds at Red Lobster and Olive Garden haven't worked.

Amid intensifying pressure from investors, the company announced late last year it would hold onto Olive Garden but get rid of Red Lobster. The company, based in Orlando, Florida, noted Red Lobster's customers were increasingly from lower-income groups, compared with Olive Garden and its specialty chains such as Capital Grille. Investors Barington Capital and Starboard Value wanted the breakup structured differently, with the latter filing a lawsuit last week for records related to the sale.

In the meantime, Lopdrup said, many people still view Red Lobster as "fine-dining for the middle class." But changing perceptions about the quality of Red Lobster's food could be a challenge, given recent promotions like "30 shrimp for $11.99," or a lobster pot pie that had just a half-ounce of lobster meat.

Lopdrup, who served as president of Red Lobster from 2004 to 2011 before moving on to head other aspects of Darden's business, said he planned to end such steep discounting.

Red Lobster tries acting like a fancier restaurant
Red Lobster/APRed Lobster's new plating style (bottom image), in which slabs of fish are piled over the rice, marks the latest attempt by the struggling seafood chain to right its course as it embarks on a new era.
"You're not going to see any of these low-priced specials that we're not proud of," he said. Popular promotions like "Endless Shrimp" and "Crabfest" will stay, however.

About two weeks ago, Red Lobster also starting rolling out a new plating style for its fish dishes that will expand to other parts of the menu.

Previously, fish dishes were served on rectangular plates, with the fish, rice and vegetables spread out in separate corners. Now when customers order off the "Fresh Fish" menu, they get a round plate on which slabs of fish are piled over the rice, a vertical presentation commonly found at higher-end establishments.

"The food arranged in a way that's more like you'd see at a fine-dining restaurant," Lopdrup said. "The seafood is the star."

As for the food itself, that hasn't changed.

Lopdrup also said he planned to reverse the decision in late 2012 to expand non-seafood options to up to a quarter of the menu and bring the figure back down to around 10 to 15 percent by November.

He declined to provide details on other menu changes planned for coming months. But he said the chain will take a "barbell strategy," meaning it will continue to offer pricier items, including dishes that are more than $30, as well as affordable options more akin to the recently introduced lobster tacos.


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Lori Testy

Red Lobster has went down hill in the last few years. It used to be my favorite place to eat, now, I don't want to eat there. The last 2 times we were there, the food wasn't great and I had a dirty glass with a lemon seed stuck to it. The lunch portions used to have large, butterfly shrimp and now have smaller, puny ones and less too. The baked potation was so hot, you couldn't even eat it with the rest of the food. I'd rather pay a few dollars more to be served larger, more filling portions and I am not even a big eater. My sister recently asked me if I wanted to eat there and before I would of jumped through hoops to have a chance, not anymore. Not good eating.

October 03 2014 at 3:27 AM Report abuse rate up rate down Reply
susaanh

Over priced and terrible. My friend ordered 6 fried oysters and was served 2 very small oysters and a plate of beer batter crumbs. I ordered coconut shrimp and a salad and was served a salad and later some very small cocktail shrimp in a relish cup. What a mess!

August 06 2014 at 11:44 AM Report abuse rate up rate down Reply
Carl Pilarczyk

I WAS a regular of RED LOBSTER until the past 2 visits. First of my wife & I were entertained by someone that looked like He was the MANager. Almost the entire time he was spending up front at the greeting station leaning against the counter, and not to what I noticed, helping/assisting any customers or associates with the food service, nor introducing himself as a "?". As a matter of fact, my wife was almost hit on the leg by one of the waiters carrying the serving table with the straps over his shoulder. He slammed it into the wall right next to my wife's leg. And with out one apology, he just stood there while one of the station greeters stated to him to be more careful. I guess he didn't listen, because he just disappeared to the back with it and the group of other waiters went ahead of him.
Our seating was fast, but it took 10 minutes before a server was assigned to take our orders. I ordered an tall draft which came over 2 inches from the top. My wife water was ok, but the glass really didn't look that clean. WE went ahead and ordered our foods at the same time. Salid came to us about HALF the normal amount. The biscuits were not hot or fresh. My wife's plate came and the flounder was over cooked, tasted like fried breading. My plate was over cooked also. Walts favorite shrimp came to me almost burnt and very crunchy. The baked potato was not hot and didn't melt the butter. And my shrimp scampi tasted as though there was no white wine and garlic added to it.
This change in management needs Lots of help because they have the responsibility of this restaurant and its employees TO THE PUBLIC "customers". The business will not run itself. That manager needs to do the job he was hired to do. I know that I didn't see it at the North 10th street in Mc Allen ,Tx

August 02 2014 at 10:29 AM Report abuse rate up rate down Reply
Velocity105

I love Red Lobster. Always have, always will and I'll go there for dinner right up to their last day if that's what it takes. I've been going there for 40 years. There was a lull in service about 20 years ago then suddenly some of the restaurants were rebuilt and reorganized and the food went from sub-par to very good. I think they're doing a great job. I know their seafood is expensive but I've rarely been disappointed there.

August 02 2014 at 1:06 AM Report abuse rate up rate down Reply
malinda.smith1

When you wholesale a cuisine (and I use that word loosely here), it is never good, like Chinese buffets, Olive garden, etc. The rolled out assembly line of dishes and the cheaper prices guarantee you one thing - lackluster food with cheap ingredients. It all looks the same and it all tastes the same.

August 02 2014 at 12:46 AM Report abuse rate up rate down Reply
Sheila

I hate chain restaurants. I can't believe that so many people love Olive Garden when there are so many good Italian restaurants around. Same with Red Lobster. I live at the shore in New Jersey where seafood is fresh and people line up to eat this frozen farm raised garbage. I don't get it.

August 02 2014 at 12:30 AM Report abuse +1 rate up rate down Reply
brenhatestwinkie

The lobster tasted like rubber

August 02 2014 at 12:21 AM Report abuse +1 rate up rate down Reply
Ed

Red Lobster
10500 E Ulmerton Road
Largo, FL 33771
727-581-5272
They need to improve on their service! We had the worst service there.
I've been in the business all my life, from Dishwasher to General Manager (fine dinning). I have taught service!
Last December, my sister and I, ate at this establishment. Although the food was good, not great, the service really slacked. It was a slow night, a Wednesday, December 18. Had to ask three persons for bread, our server never asked us if we would like another drink or refill water and, after serving our food, never came back to ask us about our meals. A server, after serving every course, should return to the table and ask “is everything to your liking”. “Is there anything I can get for you at this time”. A server needs to have a sense of urgency and be attentive. This GUY was neither!
I won’t get into the management part but, would be a subject I could go on about!

August 02 2014 at 12:09 AM Report abuse +1 rate up rate down Reply
asreber

If Red Lobster would serve several "wild" caught selections then I might consider going...I detest farm raised fish...not healthy!

August 01 2014 at 11:52 PM Report abuse rate up rate down Reply
ga7smi

try serving some good quality food

August 01 2014 at 11:21 PM Report abuse +1 rate up rate down Reply