In recent TV spots and in a new effort to
Euro RSCG Tatham
The latest ad campaign was created by the seafood chain's ad agency, Havas' Euro RSCG Tatham Partners, Chicago.
Darden reported same-store sales fell 3.1% for the quarter ended Nov. 23, ending a 23-quarter streak of gains in stores open more than a year. While sales for the quarter grew to $1.14 billion from $1.07 billion for the same period last year, that gain came from price increases as traffic fell. In October, customer visits dropped 11% after falling 7% in September. Red Lobster has raised prices at a rate more than double that of competing casual dinnerhouses in the past five years, according to a UBS Warburg report.
In a conference call today with analysts, Darden's president, Dick Rivera, blamed marketing for the chain's recent misfortunes. "The advertising is not working as hard for us as it was," he said, and cautioned that improvements would "take time." The company also saw profits fall on failed promotions.
To help stem the tide, Red Lobster in January will break a series of new ads that had "positive tests," and will try out lower-cost menu items in the $10 to $15 range to address consumer backlash at the chain's continuous price increases. In February, the chain will run a promotion for the 20th anniversary of Lobsterfest.
Executives didn't provide details about the new ads, but executives close to the marketer have said the "Share the love" theme would soon change.
"We haven't decided on a line," a Red Lobster spokeswoman said. "We're evolving as we look to connect with people."
She said that Red Lobster's new chief marketing officer, Kim Lopdrup, is still in restaurant training through the end of the year but will dive into the marketing issues in the New Year and will be "reviewing everything."
In October, the seafood chain changed its Hispanic themeline to "El Sabor de Compartir" ("The Taste of Sharing.")