Red Lobster CEO Says Company Embracing Privatization and Finding Big Wins

August 14, 2019
Five years after Red Lobster was sold by Darden Restaurants for $2.1 billion, the company is reporting rapid growth in delivery, positive same-store sales, and is exploring a range of new concepts to modernize the brand.
“The benefit of being a private company is instead of managing quarter-to-quarter, you get to build for the future,” Kim Lopdrup, CEO of Red Lobster, told Cheddar Tuesday. “We’ve made huge investments in quality, value, convenience and social responsibility, which has now set us up to begin growing restaurants again.”
With intentions to increase the number of U.S. restaurants, Red Lobster has also opened its first two locations in China. A popular restaurant rating platform in China called Dianping gives Red Lobster’s Shanghai location a 4.5 out of five star rating, which Lopdrup calls “off the charts.”
“We are so thrilled with how the brand is being received in Shanghai and Beijing,” Lopdrup said. “You’ll see the key signature dishes you’re used to seeing, but you’ll also see some innovations we’ve brought to that country, where some of the food is a little more Instagrammable.”
Red Lobster is treating these new locations as a testing ground for its “restaurant-of-the-future” design it hopes to soon bring to the U.S. Lopdrup says the company expects China to become its largest international market.
Red Lobster has also seen growth in the food delivery space, where it works with all of the major third-party services. In the last fiscal year, the chain saw off-premise sales spike by 55 percent. Red Lobster will be introducing “hybrid delivery” with DoorDash, where a customer can save a few dollars by ordering through the restaurant’s website, while also earning rewards points toward free food.
“We’re also working on ghost kitchens, which are delivery-only facilities that can greatly expand our delivery territory in the United States,” Lopdrup said. “We really think those have a lot of potential.”
Not all ideas pan out. With the plant-based meat craze in full swing, Red Lobster tried its hand at an alternative to seafood, but it apparently fell flat.
“We have tried some plant-based seafood,” Lopdrup said. “I didn’t think it met the taste requirement our guests would expect, so we’re not moving forward with that.”
When asked if re-entering the public markets was on the horizon, Lopdrup said that owners Golden Gate Capital have allowed the leadership at Red Lobster to make decisions for the long-term.
“Honestly, we really like being private,” he said. “It’s up to them, if and when they decide to make a change, but we’re thrilled with the relationship.”
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