Red Lobster has long courted guests through yearly experiences, where value isn’t solely attached to price. Recently, it brought back its Crabfest with six new combinations, including the Captains' Trio with a fire-grilled sirloin topped with creamy Crab Imperial seafood blend, paired with crab-and-mushroom au gratin and crab-and-seafood linguini Alfredo.
In late May, the brand introduced a Seafood Lover’s Lunch Menu that focuses on affordability and getting guests through the door during what’s typically a challenged sit-down daypart. The offers feature endless soup, salad, and biscuits for $8.99 and a Power Bowls, like the Dragon option with spicy soy-ginger sauce drizzled over quinoa rice and broccoli for $9.99.
And Red Lobster is one seafood chain courting the delivery boom with a third-party partner.
Bonefish, which reported same-store sales gains of 1.9 percent in the first quarter, was able to build its check through differentiated offerings, such as the ocean mixed grill and three-course lobster dinner promotion, CFO Chris Meyer said during the company’s April review.
In Q4 of 2018, it made an operational change to reduce the number of gift cards sold through discount channels. Meyer said some of the outlets charge higher fees. So it made financial sense to reduce the brand’s reliance on them. The move snipped traffic by about 150 basis points in Q1 but did boost profitability and margins, he said.
These kinds of tactics prove Reinstein’s point—seafood chains have to pull different levers than most casual-dining peers. Promotions and price points aren’t the cure-all for seafood brands courting elevated, broader experiences to offset higher costs.
Legal Sea Foods, Reinstein says, has done a more effective job of altering and paring down its menu and highlighting appetizers as a way to eat out without over-spending. Each Legal Sea Foods location has its own unique décor, which many millennials prefer more than the traditional chain look.
He also says there are fewer seafood eateries in the top 500 U.S. restaurant chains because seafood costs are more volatile than beef or chicken prices, and that the shelf life of seafood before it spoils is more temporal than other foods.
Despite that fact that some major seafood chains saw a drop in revenue, Pappadeaux Seafood Kitchen, which has 40 locations mostly in Dallas and Houston and throughout Texas, saw a revenue spike of 4.6 percent in 2018. Christina Pappas, its Houston, Texas-based director of marketing, attributed that rise to “treating our guests like family. We’re a family-owned business. We spend a lot of time choosing the best quality fish and vegetables.”