Red Lobster fire sale: Confusing advertising with brand

Tom Dougherty, CEO – Stealing Share

20 May 2014

Advertising is a tactic. Brand is a strategy.

Darden Restaurants sold off its Red Lobster restaurant chain the other day to a private equity firm at what category insiders labeled a fire sale.

Darden is not necessarily a household word outside of investment analysts and branding folks. But it owns a lot of the full service restaurants that we know all too well. Red Lobster, Olive Garden, The Capital Grille, LongHorn Steakhouse. Eddie V’s, Yard House, Seasons 52 and Bahama Breeze.

“Nothing worked. The grandparents still came with grandkids in tow. The bar just provided a better view of the gray hair that dominated the dining room.”


Red_Lobster_Restaurant_Yonkers_NY_October_2012There was a time when Darden was a Wall Street darling. No more. Now it is under pressure to spin off Olive Garden too. That’s a move Darden is trying to squash as it claims that Olive Garden is a growth opportunity to investors in the same way its other remaining brands are.

Darden’s feet were held to the fire by investors anxious to get the chain to divest itself of Red Lobster. The seafood chain restaurant had an aging clientele and a stagnant P&L. It could not get the 20-30 somethings to frequent the restaurant, which gained a brand reputation of being a gathering place for grandma and grandpa but not trendy peers.

Advertising didn’t save Red Lobster

Like all of the restaurants in the same sorry state, Red Lobster tried to advertise its way out of the hole and menu (if we can call that a verb) its way our of obsolescence. It even tried to reposition the bar inside the restaurants to a more central location.

Nothing worked. The grandparents still came with grandkids in tow. The bar just provided a better view of the gray hair that dominated the dining room.

Why did no one look at the Red Lobster brand and understand the permissions that the brand held? Advertising is a tactic (like new menu items or a shrimp fest) and it does not move a brand’s permission. Adjusting equity and having a deep understanding of the beliefs held by the target market only do that.

If Darden did this, the findings were cursory at best. I can’t find any effects of such an analysis because nothing seemed to change in the Red Lobster messaging. It kept the same look, feel and tenor of its standard advertising fare. No equity markers were adjusted to entice a different demographic. Nada.

Let’s hope the new management sees opportunity in its newly acquired brand. Let’s hope Darden does it with Olive Garden before the cannibals have their way there too.

It’s wait and see, for sure. But the category as a whole is way too self-confident of its understanding of prospects. This is because the players have small appetites to do the things necessary to steal market share.

See more posts in the following related categories: Darden Red Lobster Restaurants


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