On special occasions, when she was a little girl in Kentucky, Rebecca Covington and her family packed up their car and took the short drive to the Red Lobster on Lexington’s Nicholasville Road.
She’d stand between her brothers in front of the tank full of crustaceans, rapt with wonder as the lobsters jockeyed for position in slo-mo, unaware of their imminent demise. Daring each other to stick each others hand in the tank, Covington says they stood there for what seemed like hours on end.
“I remember my dad coming to see me in my first professional show,” Covington says now, recounting the memory as she prepares for her role in the Broadway musical Motown. “And after the show he took me to Red Lobster to let me know how proud he was. It was the first time he saw me as a professional actress, which is now my life. And Red Lobster is a part of that.â€
From Rego Park, Queens to Reno, Nev., few chains evoke as much passion as Red Lobster, an accessible and affordable family-friendly option promising fresh seafood options, pastas and, most infamously, seafood specials that come out again and again until you burst.
For thousands of its most loyal African American customers, Red Lobster proved a national chain could serve as a touchstone and venue for memories.
“When I first started I remember that Red Lobster was a place that you’d go and dress up for celebrations,†recalls Keisha Black, general manager of the Red Lobster’s location in Pineville, N.C., who began working at the restaurant while in college 16 years ago. “It used to be the kind of place you’d save up for and go once or twice a year.”
Indeed, changes which began eight years ago and are expected to be complete across Red Lobster’s 700 locations in 2014 has rendered a restaurant focused on broadened appeal, affordability and listening to its customers.
In the summer of 2011, Red Lobster encouraged customers to ‘Sea Food Differently,’ highlighting its Maine Stays, a variety of menu items below $15, the anchor of the most comprehensive core menu transformation in the brand’s history. Today, nearly 25 percent of its menu is comprised of non-seafood items and 60 percent is below $15. Red Lobster has also modernized many of its dining rooms, adopting a New England-style ‘dockside’ aesthetic.
“Part of what some of our customers said,” says Chip Wade, Red Lobster’s executive vice president of operations, “was that, ‘Hey, I love seafood, but my husband is allergic to shellfish, so he immediately discounts Red Lobster.’ So the core menu is designed to provide our core guests and hopefully new guests with the opportunity to come into Red Lobster and see new menu offerings at more approachable price points.”
‘Our core strengths are not going away’
Wade knows his seafood. Before his current role as Red Lobster’s executive vice president of operations, he studied culinary arts at Johnson & Wales University in seafood-crazed New England. In Boston, Wade had a two-year stint as COO of Legal Sea Foods. He has worked in management and human relations, overseen renovations and special projects.
So when Wade, who turned 50 on Valentine’s Day, says he’s confident the brand’s transformation won’t alienate its most loyal customers, he speaks as an executive who understands what brand loyalty means to all levels of the operation.
“We value the fact that they not only love and frequent our brand, but we value their insights. What we’re hearing from them is the need for affordability and the need to have a little more variety and choice. We know we have strengths in seafood and executing and operating on a number of different species of fresh fish as well as fantastic shellfish. Those menu items and our core strengths and expertise is not going away.”
Over the years, an undeniable affinity
Red Lobster declined to share specifics on the makeup of its guest demographics, saying only that information on the brand is proprietary. But market research and an analysis of black consumer behavior at restaurants suggests Red Lobster is among African American’s favorite destinations in the casual full-service dining segment, a fact not lost on Red Lobster or its parent company.
NPD Group, which has been tracking consumer behavior at restaurants since 1976, polls hundreds of consumers each day. According to the group’s findings, African Americans made 7.1 billion visits to restaurants during the reporting period ending in September 2012. Spending a total of $40 billion, the average African American made 174 visits to restaurants spending about $6 per visit.
The group says that African Americans prefer mid-scale grill and buffet concepts like Friday’s, Chili’s or Hometown Buffet. To full-service restaurants, African Americans’ preference is about 85 percent above the average visit rate to those concepts; of all visits they make to full-service restaurants, 7.6 percent of them go to grille concepts, which is approximately 17.5 visits per year.
All told, African Americans visit casual dining seafood restaurants at a 57 percent higher clip than any other group.
African Americans “are very important to the restaurant industry overall,” restaurant industry analyst Bonnie Riggs says, adding that promotions which emphasize value are a clear indicator it is trying to court the African African consumer. Maine Stays campaign is here to say.“When they’re doing things like offering 15 types of dinners for under $15 … those types of promotions run at that price point would probably have high appeal to [African Americans].”
A mishap, and a way forward
Red Lobster’s ascent to becoming the largest casual dining seafood restaurant in the country saw multiple eras that saw massive gains and major lulls in revenue. It saw the emergence of wildly successful campaigns and misguided blunders that ultimately led to changes at the executive level.
In 2014, federal law will require that large companies like Darden provide affordable health coverage to employees working an average of 30 hours per week. Without going into detail, Darden has downplayed the scope and significance of a “test” it began in select markets, cutting the hours of some employees at Olive Garden, Longhorn Steakhouse and Red Lobster.
In December, Darden said more competition in Red Lobster’s segment and bad publicity related to the test resulted in a 2.7 percent drop in revenue the previous quarter. Otis responded with aggressive changes; a new promotion allows customers to choose 30 shrimp for only $11.99, and Red Lobster in January launched a Spanish-speaking television campaign (Hispanic restaurant goers make 189 visits to restaurants each year, NPD Group says).
“Our disappointing results for the quarter point to the need for bolder changes in the promotional approach at our three large brands,” Otis said. “So, we are retooling the promotional calendars at Red Lobster, Olive Garden and LongHorn Steakhouse for the balance of the year to ensure they better fit consumers’ current financial realities and expectations.”
Critics say Darden underestimated the effect fallout from the test and negative press related to it would have on its bottom line.
“I was taken aback,” said Syreta Oglesby, a public relations professional and frequent visitor. “I like Red Lobster because of consistent service, affordable prices, and great food, but my friends and family and I hoped the rumors of how they were treating employees regarding healthcare weren’t true because it was definitely going to affect our support.”
Wade defended Darden’s testing period, warning against a rush to judgment and misinformation.
“As an organization we have to take a long term, holistic view of how we respond to various governmental laws that may change,” he said.
A spokeswoman reiterated that none of Darden’s current full-time employees would have their status changed as a result of healthcare reform and that each restaurant would have full-time employees. Employees at all levels, she said, have access to the same insurance plan coverage.
Lobsterfest: Back to basics
This week marked the 30th anniversary of the Red Lobster’s Lobsterfest promotion. Complete with two brand new menu offerings, Lobsterfest is one of the most easily identifiable promotions in the restaurant industry — and among the most lucrative for staff at the restaurant level.
“Lobsterfest is the king of all promotions,” a young employee says in a new TV spot. Watching the commercial, viewers are asked to think about their favorite entrée.
It may be a rhetorical question. But the message from a business perspective is clear: while you may be asked to Sea Food Differently, some memories and experiences should never change.