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Red Lobster goes vertical on plate to push quality

Published on NewsOK Modified: July 28, 2014 at 12:04 pm •  Published: July 28, 2014
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NEW YORK (AP) — 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 Inc. 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 like Chipotle and Panera, 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.

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