Red Lobster’s Customers Escaping

Discussion
Jan 09, 2004
George Anderson

By George Anderson

Once is enough. That’s the lesson that many consumers have learned about eating at Red Lobster and it’s also the reason that sales and customer traffic have fallen off at the chain in nine of the past 12 months.

Last month, customer traffic was off 14 percent and sales were down 13 across the chain, according to a Chicago Sun-Times report.

Neil Cherry, a partner with Bain & Co. said, “What is going on is pretty dramatic relative to normal ebbs and flows in customer traffic.”

Marketing strategist and author, Al Ries, told Reuters that Red Lobster needs a new image.

“Their advertising kind of communicates the high-end seafood position. You have to communicate that it’s a place for the average family.”

The chain recently hired former Burger King chief operating officer, Kim Lodrup, to lead its marketing efforts.

Speculation has arisen that Lodrup will seek to replace Red Lobster’s advertising agency, Euro RSCG Tatham. The agency, which has handled advertising for the chain for six years, created a new campaign, “Share the Love,” last summer that has been scrapped for all intents and purposes.

Moderator’s Comment: What is the fix to Red Lobster’s problems?

It certainly appears from the outside (and from some places on the inside, we expect) that the ship is going down. This week, Red Lobster’s interim president
and chief operation officer, Dick Rivera, resigned after having been on the job only since September.

In a related piece of news, RetailWire would like to give this week’s, “Ya Think?” award for stating the obvious to Neil Cherry of Bain & Co. Mr. Cherry
was quoted in a Reuters piece as saying, “There is some evidence that the concept is getting a little bit stale.”
[George
Anderson – Moderator
]

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