Red Lobster’s history may lie in foods from the surf, but foods from the turf could play a bigger role in the brand’s future given the success of its newest menu.
Red Lobster: Maine Stays
Last October, the 705-unit chain — in a stark departure from its traditionally seafood-heavy focus — unveiled its largest menu refresh to date, featuring more nonseafood items and lower-priced entrées and helping it claim the 2013 MenuMasters Award for Best Menu Revamp.
Among the new items are Red Lobster’s first-ever pork chops, a peppercorn-seasoned sirloin with blue cheese sauce, a wood-grilled chicken dish in a wine sauce, a vegetarian option that features vegetable skewers and a section called Maine Stays comprised of 15 entrées for less than $15.
“We really set out with this menu to listen to our guests, understand their needs and deliver something that would provide more affordable options,” said Salli Setta, executive vice president of marketing. “And to get rid of the veto vote.”
Some of the best-sellers have been the Parmesan-Crusted Chicken Alfredo, Wood-Grilled Pork Chops and the brand’s tilapia dishes, Setta said. Sweet Chili Shrimp, a new appetizer, has also resonated with customers, she said.
“It’s just a natural progression of how we’re trying to grow our business,” said Michael LaDuke, who was executive chef at Red Lobster at the time of the menu’s launch. “We’re listening to customers. We want to give them more opportunities and more reason to come into the restaurant.”
Red Lobster’s parent company, Orlando, Fla.-based Darden Restaurants Inc., started testing the menu in summer 2011 as part of the brand’s “complete refresh,” Setta said.
The refresh included redesigned restaurants, new branding and advertising initiatives, and the menu revamp, all of which were intended to keep the brand relevant to consumers.
“[The menu] really was the culmination of a multiyear brand refresh,” she said. “We’re always looking at how we begin to capture new trends in the marketplace.”
Combating the veto vote
Red Lobster is smart to take that approach, said Dean Small, founder and managing partner at Synergy Restaurant Consultants in Laguna Niguel, Calif. Now that there aren’t as many veto votes, customers may be more likely to frequent Red Lobster over other casual-dining chains like Outback Steakhouse or Applebee’s, he said.
“Every customer is a potential regular now,” Small said. “People are looking for more options, and [Red Lobster] wants to be filling that need in the marketplace.”
Mary Chapman, director of product innovation at restaurant industry research firm Technomic Inc., said the big test of the refresh will be if Red Lobster can get away with adding more nonseafood items without diluting its already powerful, seafood-centric brand.
“They certainly don’t want to lose their identity as a seafood restaurant because it’s what they’re known for and what they’re best at,” she said.
Still, Chapman said she doesn’t believe the new menu detracts from the brand’s image as a fish expert.
“Steakhouse chains serve a lot of great seafood dishes, but that doesn’t mean they aren’t known for their steak,” she said.
Chapman noted that the addition of more items for less than $15 was a smart move on the brand’s part, as more consumers are value conscious these days.
Red Lobster’s flexibility — guests can order a meal and a drink for about $20 or get a big, expensive, celebratory lobster, shrimp and crab dinner — is also a draw, Chapman said.
“Red Lobster has always been known for having really good promotions and offering values on a limited-time basis,” she said. “But to have the everyday value [of the Maine Stays] just emphasizes the value aspect of their brand a little more.”
The menu changes were made amid troubled times for Red Lobster, which has seen its same-store sales tumble significantly in recent quarters. However, Stephen Anderson, senior restaurant analyst at trading firm Miller Tabak + Co. LLC, said he sees the menu changes helping the brand over the long term. Even though the average check is down, with more customers purchasing items that cost less than $15, frequency of visits should see a bump, he said.
“I’m optimistic,” Anderson said. “I think they’re wise to see their competition not just as seafood restaurants but as casual-dining restaurants in general.”
Red Lobster is sending the not-so-subtle message that it’s not just a concept for birthdays or celebrations, said Synergy’s Small. The addition of less expensive and nonseafood items was a smart move — and one that doesn’t alienate Red Lobster’s already loyal, seafood-loving customers.
“Adding nonseafood items is simply necessary for a seafood restaurant to stay relevant day-to-day for diners,” he said. “Red Lobster is not filling these cuisine gaps with lackluster offerings. They’ve invested a lot of time and energy into creating quality dishes.”
He added: “They haven’t run away from their core values. They haven’t taken anything away, which helps to preserve brand loyalty.”