10 Things Red Lobster can do to save its crumbling empire

Jul 8, 2014 at 6:48 p.m. ET
Image: Justin Sullivan / Getty Images News / Getty Images

Red Lobster was once an icon amongst chain restaurants. An eatery that promised luxury, it was once a destination for those who wanted to taste the bounty of the sea. However, diners' tastes have changed, the economy has changed, and the availability of fresh seafood has improved, leading to a downturn in Red Lobster's profits. Is there hope for the company?

Top 10 things Red Lobster can do to save its crumbling empire

Photo credit: Justin Sullivan / Getty Images News / Getty Images

Revitalizing after the sale

As recently as 10 years ago, Red Lobsters were destination restaurants. They were done up to look like a fish shack, but inside you could pick your own lobster and enjoy scallops and crab legs, even amongst the country's central plains and tall peaks. They were one step below fine dining, with both the bountiful gourmet selections and price tags to prove it. Of course, time is a cruel mistress, and the American diner is an ever-changing creature.

As the years have gone on, Americans have demanded quicker meals, spending less time in sit-down establishments (by both preference and necessity) in favor of express menus, all-you-can-eat soup and salad lunches, Chipotle's and an ever-growing selection of fast food. Unfortunately Red Lobster had difficulty adjusting its central identity to this new reality. Add to that the fact that the American diner also began to demand fresher seafood and find avenues to get it, Red Lobster faced a challenge it was somehow unable to overcome.

Now it's sold, and its future lies in two things. The first is a holding company's decision makers, and the second is the continued passion diners feel for garlic cheddar biscuits. This combination does not a successful restaurant make. However, for those who remember Red Lobster as a special place for birthdays and celebrations, all hope is not lost. Red Lobster can save itself, and there are several ways to do it.

1. Change the signature

If you asked someone to name the one dish they associate with Red Lobster, they wouldn't say lobster — they'd say cheddar biscuits. While everyone loves these carby wonders, they're not going to draw diners to a pricey sit-down establishment. Instead, Red Lobster needs to find a new signature dish or two (think Chili's baby back ribs or burgers, Outback's Bloomin' Onion or Applebee's half-price late-night appetizers) that will draw people to the restaurant.

2. Don't just change the signature — change the handwriting

Of course, that won't be enough. A lot of Red Lobster's dishes are either soaked in wine and butter, are high in cream or are deep-fried. These types of dishes have been "sometimes" foods for the majority of American diners, especially those with the disposable income you need to dine at a current Red Lobster. Therefore, instead of heavy foods, Red Lobster should really concentrate on tasty seafood dishes without a lot of oil and fats.

3. Focus on fresh

Right now, Red Lobster has a quality problem. The seafood served at the restaurant is low quality, tastes frozen and reheated and is generally of a lower grade than you could buy at a supermarket for your own consumption. In an era where sustainable, regional, organic and farm-to-table cuisine is popular, Red Lobster needs to find a way to offer fresh, high-quality seafood. Chef Jasper Mirabile of Jasper's Restaurant notes, "If the quality of food was better, they would have a better reputation. Instead they look at price, and they think that's all people want."

Yes, they still need to cut the price, but they can do that by decreasing the size of the gigantic platters of food they call a meal.

4. Expand their desserts

The desserts at Red Lobster aren't spectacular, and this is an area in which the restaurant could definitely improve. Diners will seek out restaurants based on the quality of their desserts, both for dinner and just for desserts and after-dinner drinks. In particular, Chef Jasper recommends a key lime pie, as it would fit Red Lobster's theme.

5. Get a signature cocktail

Bars dominate a significant portion of many Red Lobsters, but what is their signature cocktail? Again, the chain needs to find a themed drink (Navy Grog, perhaps, or a hurricane, etc.) that will draw people into the restaurant. Serve them in a fun glass with giveaways, and people will buy them. Even better, liquor sales produce easy cash.

6. Expand overseas

From a practical business perspective, Red Lobster may be forced to peddle its brand across the seas in markets like China, which often yearn for bits of American pop culture. Also, diners in foreign markets often enjoy more sit-down restaurants and will want the eating experience Red Lobster currently offers.

7. Customer service is king

Jasper recommends that Red Lobster work on its customer service. There is often a divide amongst servers at a Red Lobster. The experienced veterans tend to be knowledgeable, while those with less than a few months' experience are often lost, hesitant and ignorant of the menu. This speaks to a lack of training and a lack of incentive for veteran team members to mentor younger employees. Frankly, if Red Lobster did nothing to change its food, it might just win customers back with exceptional service.

8. Express, express, express

Applebee's and Chili's curbside service, Chipotle's, Subway and fast food continue to dominate the American dining landscape because they fit Americans' busy lives. Few families have the time to sit and eat together anymore (which isn't great, but that's another article), and so restaurants that can get people in, fed and on their way make money. Red Lobster should concentrate on 30-minute express lunches and curbside service as well as consider opening fast-casual restaurants similar to the Pei Wei restaurants opened by P.F. Chang's.

9. Keep it cheap

So here's the kicker. The American economy isn't doing great, so while all these changes are happening, Red Lobster needs to find a way to cut costs (without cutting back on biscuits, of course!). This can happen by improving internal processes but will also likely mean the restaurant will need to reduce portion sizes and offer more value options on the menu.

10. Make it fun

Lastly, eating at Red Lobster needs to be fun again. Perhaps not loud, rowdy fun, as this will likely scare away the restaurants' current customers, but there's not really any make-you-smile fun about eating at Red Lobster. Maybe with a signature cocktail, an emphasis on beach living or just getting front-of-house staff who are bubbly, perky and make the restaurant friendly will help.

More thoughts on Red Lobster

Copycat Red Lobster cheddar bay biscuits
Michelle Obama announces healthier meals at Olive Garden, Red Lobster and more

Best restaurant chains for families