Ever since I was old enough to actually enjoy eating fish, Red Lobster has been a pretty solid option for getting some seafood.  We don’t go very often because we have a local place that we enjoy much better, but we’ve been a number of times over the years.

Recently, Red Lobster was sold by their former parent company, the Darden Group (who also owns Olive Garden as the most comparable type of restaurant), and the new holding company, Golden Gate Capital, just completed the sale, and has already announced some changes.

They boil down to two changes: They’re going to charge more money and they’re going to try to present the restaurant as more fancy.  Both of these things are with the intent to curb years of steadily declining sales.

After reading the article and absorbing the strategy, I think that Golden Gate Capital may have just wasted a whole lot of money.  Personally I don’t see things working out.  Here is why I think that Red Lobster may be doomed for failure based on the strategy and their history:

  • People love promotions – Red Lobster wants to get away from low priced specials and many promotional items.  On paper their reason looks good: Promotions like that tend to erode the brand, so why not end the erosion?  In reality, the damage has been done and it’s going to be next to impossible to unwind that clock.  People are used to promotions, and by eliminating them, the people that would have come in the door are now going to go elsewhere.  If you want to see how eliminating promotions works out, let’s remember the massive failure that almost sent an iconic department store chain into bankruptcy.
  • Chain restaurants aren’t fancy – Apparently laying food out on the plate is another big part of the turnaround strategy.  Instead of having the fish side by side with the other items (potatoes, rice, vegetables), the fish will now be placed on top of those items.  This will make the fish the centerpiece of the…..You know what?  I can’t even finish the sentence.  This strategy might make a difference in a high end restaurant with one or two locations, but for a chain restaurant with thousands of locations, this is not going to be a difference maker.
  • Things run their course – I was originally going to split this post into two parts, the reason I think the strategy stinks (which I did), and what they should do instead.  Then, I got to thinking that maybe there really isn’t anything much they can do.  Many things simply come and go in terms of popularity.  Maybe Red Lobster has been around for long enough that it’s simply run out of steam.  It happens.  Especially in the food industry where tastes change and what’s cool one day is replaced by the new cool thing down the street the next day.

Simply put, I think Red Lobster is going to continue on the downtrend.  I just don’t see how different pricing or plate arrangement is going to change that.

Readers, what do you think?  Is Red Lobster a brand that can be revived or is it a brand that has run its course?  What do you think about the new approaches?