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An unlikely restaurant won over millennials by ignoring them

Red Lobster
Red Lobster


Red Lobster has made surprising gains with an unlikely customer demographic: millennials.

The chain was named the top restaurant choice among 18- to 24-year-olds in a recent survey by Nation's Restaurant News that included 173 other brands.

The rating came as a surprise even to Red Lobster CEO Kim Lopdrup. He says the restaurant hasn't been advertising directly to millennials.

"Red Lobster is not the first place people think of as a favorite restaurant for millennials," Lopdrup said in an interview with Business Insider. "It's particularly interesting because we have not been explicitly targeting millennials. We've just been focusing on making improvements overall."

Red Lobster was in decline when it was taken private nearly two years ago.

Same-stores sales had dropped 5.6% in the fourth quarter of 2014, the last quarter for which the company reported financial results before it was taken private by Golden Gate Capital.

In the prior quarter, same-stores sales had dropped by nearly 9%.

Red Lobster
Red Lobster

(Facebook/Red Lobster)

Red Lobster is now making a comeback: The company says it has had positive comparable sales for the last six straight quarters.

So what has changed?

Since going private, the company has started catering its menu to new food trends with the additions of wild-caught Alaska Sockeye Salmon, lobster tacos, and new flavors like chimichurri and spicy Tennessee bourbon shrimp.

Red Lobster has also increased the size of its shrimp by at least 47% in most of its dishes and says it changed cooking practices to improve taste. For example, cooks started preparing the shrimp scampi in-house and added more sauce to the dish, after customers said they wanted additional sauce for dipping their cheddar bay biscuits.

And while many casual-dining restaurants, such as Olive Garden, are increasingly emphasizing carryout to keep up with growing competition from fast-casual chains (like Chipotle), Red Lobster has been encouraging customers to dine in, in part by offering a new line of alcoholic beverages.

red lobster fish dish
red lobster fish dish

(Red Lobster/Associated Press )

It turns out this resonated with millennials.

"Millennials are very social," Lopdrup said. "They like to share experiences with friends and they like to dine in groups, and Red lobster is well set up to handle large parties."

Beyoncé also gave the chain a boost recently. In February, the company's sales soared 33% on the day after she released a new song that included a reference to the seafood chain.

Red Lobster isn't just winning over millennials, however; it's also gaining ground among all customers, according to the Nation's Restaurant News survey. The chain ranked fourth this year among all casual-dining restaurants, up 10 places from last year's survey.

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