Red Lobster retools as 'better seafood' eatery

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Don't call it a whole new Red Lobster, but the Darden Restaurant chain is aiming to reinvent itself as a "significantly better seafood restaurant."

To do so, it's simplified the menu with the highest-quality seafood it can offer at its mid-range prices, ditched its tropical themes in restaurants for a crisp, clean look with white-shirt-and-black-pants uniforms, added Northeastern coastal imagery to its menu and Web site and trained staff to talk up the freshness of its offerings.

"We have been making gradual change," said President Kim Lopdrup to analysts in a June 23 investor conference. "We think it would be a mistake to say we have a whole new Red Lobster."

Its multi-year, five-part strategy, Red Lobster is trying to appeal to a broader range of consumers and be what it calls "significantly better seafood restaurant" than other chains, including non-seafood restaurants that have begun serving shrimp, salmon and other fish.

Red Lobster is taking small, slow steps to fix the ailing chain. And so far its efforts, including a move to conjure up imagery of a Maine fishing village, has sated analysts and resulted in a slight uptick in same-store sales.

Moreover, the chain has begun a search for a VP-chief innovation officer, according to executives knowledgeable of the search, though a Red Lobster spokeswoman said she was unaware of that opening.

EVOLUTION

The chain is eschewing a big, spashy ad campaign and is instead is tweaking the thinking behind its current spots (the $100 million account is handled by Richards Group, Dallas) to focus more on seafood lovers than "the seafood lover in you." In essence, it is concentrating on building a relationship with seafood devotees rather than hook casual diners who would just have soon gone to a Bennigan's or T.G.I. Friday's. Internally, it calls its strategy "Ignite the craving."

Luc de Brabandere, VP of Boston Consulting Group, Paris, and author of "The Forgotten Half of Change: Achieving Greater Creativity Through Changes in Perception," sees the Red Lobster strategy as logical. "In reality, you never have radical change, it's always incremental," he said. "If they decided to ... work less on perception and more on reality and maybe that's the right strategy."

It does seem to be paying off initially: In June, Red Lobster ended its 2005 fiscal year with a 0.9% same-restaurant sales gain and same-store sales have improved since beginning the process, reversing a persistent and often double-digit traffic decline.

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