Red Lobster trolls with new look

Nation's Restaurant News, May 8, 2000 by Andy Battaglia

TAMPA, FLA. -- Exploring different marching orders for its ongoing reimaging campaign, Red Lobster is testing a market-by-market rollout of the refurbishing program with a 14-restaurant makeover here.

The strategy of applying the reimaging to an entire market, rather than on a unit-by-unit basis, was implemented to allow the chain to compete better against the legions of casual-dining brands even as it slows to update its 651 restaurants, some of which are 30 years old.

"Now we will operate more like a small entrepreneurial operator with the resources of a Fortune 500 company," said Red Lobster president Dick Rivera.

The Tampa initiative, officially unveiled to consumers last week through a marketing campaign touting "The New Red," will be followed by a similar effort in Dallas and, depending on the plan's success, eventually across the whole system.

Several major markets in the chain's seven U.S. regions will undergo the face-lift and serve as models for their surrounding areas.

The remodeling touches, which carry a per-unit price tag ranging from $250,000 to $300,000, include an expanded bar area, reworked exterior decor, a retouched dining-room design and exterior landscaping.

In Tampa several local favorites, such as grouper sandwiches and conch fritters, were added to the core menu. Executives say the changes were made to revitalize the 32-year-old brand's profile.

"We are looking to make it an even better experience, especially for light and lapsed users," said executive vice president of operations Edna Morris. Some people think of us as having great fried shrimp but don't realize the strides that we've made over the years in terms of fresh fish and fresh-fish preparation. We want them to leave thinking it feels like Red Lobster but more relevant in terms of the whole experience as it compares to other casual-dining restaurants."

To update their "relevance," Red Lobsters are undergoing changes to increase energy and service levels.

In the past 18 months, the chain has expanded bar operations in approximately 110 units nationwide. But the past 10 months have been devoted solely to completing the remodeling plan in a more concentrated effort throughout the Tampa area -- its oldest and most successful market. Along with the bar update, which includes an expanded wine list and drink menu alongside the physical changes, the strategy features lowered table dividers, new aquariums and new lobster tanks designed to make the dining room more interactive.

The changes are being communicated in Tampa through "The New Red" marketing campaign, to be reserved for markets that have been completely remodeled. The campaign plays up the chain's "vibrant new bar area" and "cool" new image in print and radio ads.

"We're interested in changing how people think of us and challenging people's recollection of Red Lobster," said Wyman Roberts, executive vice president of marketing. "It's about Red Lobster's not being so serious, very upbeat but not silly. It's casual dining, and from that standpoint people are looking for some fun and energy."

The print ads also will feature light couponing, Roberts said.

"We're not trying to buy people into this because it isn't a short-term type of program," he said. "It's about building the business over the long haul. But it's gotten easy in a market like Tampa for some people to just drive by because we've been on the landscape for such a long time. There's a reason we're around, and we're convinced if they give us a shot, they'll be surprised.

While Red Lobster is seeking improvements, same-store sales for the seafood division of Orlando-based Darden Restaurants Inc. have enjoyed a prolonged uptick. Red Lobster has posted nine consecutive quarters of same-store sales increases.

And because of those numbers, Morris said the remodeling program is particularly mindful of not alienating core customers. But the updates are necessary to keep Red Lobster competitive in the long term, she said.

According to communications director Jim DeSimone, a similar market sweep will be completed in Dallas this summer, with cues taken from its initial test in Tampa.

"We're trying to figure out how we're going to go about updating, and we've chosen two of our stronger markets on the theory that if we can improve an already strong market, it will definitely work in a weaker one," DeSimone said. "This plan improves our ability to move from iteration to iteration within the company, and that's the key to survival. We think it's the company that tries to figure out what is right now that's going to be around in another 30 years."