For Blacks at Red Lobster, a Nexus of Novelty, Nostalgia

Darden Restaurants is banking on a brand refresh nearly a decade in the making to rebuild Red Lobster, but will loyal black dollars be essential to the turn around?

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.

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