Red Lobster tries to boost sales by going fancy

Red Lobster's food is being plated differently to mimic more upscale restaurants' styles and cater to clients who 'are not going to go a Chipotle for their anniversary,' according to the chain's new CEO. On Monday, Darden Restaurants closed its sale of Red Lobster to Golden Gate Capital for $2.1 billion.

Red Lobster/AP
Red Lobster's Wood Grilled Tilapia on a circular plate on which slabs of fish are piled over the rice, an architectural presentation that is common at higher-end restaurants. The new plating style marks the latest attempt by the struggling seafood to right its course as it embarks on a new era.

As Red Lobster finalizes its sale to a private equity firm, the seafood chain is already seeing changes.

Red Lobster is nixing some of its promotional discounts and going vertical with its food plating in an effort to give itself a high-end facelift. Its former parent company, Darden Restaurants, completed its sale of Red Lobster to Golden Gate Capital for $2.1 billion Monday, Darden announced Monday, despite investors voicing their disagreement.

Red Lobster's new chief executive, Kim Lopdruptold the AP that he thinks Red Lobster can get customers back by going more upscale.

“At the end of the day, people are not going to go a Chipotle for their anniversary or their birthday,” Mr. Lopdrup says.

In order to be the place where people go for their anniversary, Red Lobster is mimicking the style of fancier restaurants. One example: the chain is going more "vertical" with its plating, placing fish dishes on round plates with more of the food stacked on top of itself. Lopdrup says Red Lobster will also continue to offer pricier food selections, including options that are over $30, as well as cheaper picks. It is part of the seafood chain’s efforts to be more upscale and recover from years of dismal sales. Red Lobster’s total sales fell 1.7 percent to $2.62 billion in 2013, according to Darden’s annual financial report, and have stayed static in the $2.6 billion range for years.

Red Lobster and other sit-down restaurants have struggled with many customers cutting back on spending, and choosing places like Chipotle and Panera for similar quality food at a lower price. Darden announced earlier this year it would sell Red Lobster and focus on branding for Olive Garden, its remaining major chain. 

The decision to sell Red Lobster left some investors bitter that they were not informed of the decision until after the fact. Starboard Value LP, one of Darden’s largest shareholders with a 5.5 percent stake, had expressed concern of a possible sale. Starboard even sent a letter to Darden’s board of directors, stating that selling Red Lobster would not be good for the chain.

Once Darden announced the sale to Golden Gate capital in May, Starboard’s chief executive Jeffrey Smith said in a statement the sale undervalues Red Lobster and its real estate assets. Mr. Smith also expressed discontent of Darden negotiating a sale without shareholders’ approval, even though many asked for a special meeting. 

of stories this month > Get unlimited stories
You've read  of  free articles. Subscribe to continue.

Unlimited digital access $11/month.

Get unlimited Monitor journalism.