Red Lobster's Customers Pose A Huge Threat To The Business

Red Lobster’s customers are too old, and it’s a major threat to the restaurant chain’s business.

The “early-bird special” mentality of Red Lobster’s customers is keeping it from competing with younger, hipper brands, writes Justin Bachman at Bloomberg Businessweek.

The seafood chain “attracts an oversize share of older diners who don’t eat out frequently, while younger and spendier patrons eat their fish at more upscale restaurants — places that can cover rising costs better,” Bachman writes.

Parent company Darden Restaurants just sold Red Lobster to Golden Gate Capital for $US2.1 billion in cash.

Red Lobster has also been hurt by the rising price of shrimp and the ascent of fast-casual fare like Chipotle and Panera Bread.

In order to attract a more promising demographic, Red Lobster will have to adjust its menu to appeal to a younger crowd.

Here’s a chart showing how same-store sales at Red Lobster have declined in recent years.

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