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Red Lobster is the number one restaurant on its market in North America.
Red Lobster owns 667 restaurants in the US and 27 in Canada and is still opening new ones on these two markets. There are franchised restaurants in nine countries, recently the second one opened in China and one in the Philippines etc. The future is bright, and we try to set the standards for quality seafood.
These are the highlights in Red Lobster’s business environment.
Our expectations are the expansion will continue in the US Economy, but at the same time is the landscape rather challenging with the barrier wars between the US and other economic areas.
The graph shows the current uncertainty in the US economy. The uncertainty plays a role in peoples mind, also when comes to the decision on where they want to have their next dining experience.
Everybody who wants a job can have a job. Over 60% of the people are gainfully employed which makes it very challenging to find a replacement employee if you lose someone. The graph reflects the situation.
The restaurant business is a huge industry in the US and Red Lobster is very proud to be a part of it.
Revenues at full-service restaurants have been in a downturn in the recent months but the limited-service restaurants are showing continued expansion. The trend reflects the economic turmoil in the US economy.
This gives a sense of the challenges the industry is facing and have been facing for several months. July and August are months of the year where we typically see success in our business.
Success has not been the case in recent months.
The industry is flat with declining traffic.
This slide shows how the casual dining space has survived over the last number of years by elevator the price point in order to create the margin expectation needed when fewer people are in the seats.
This graph shows what has been happening for the last nearly six decades when comes to where people spend their money comparatively. Proportionate spending at restaurants has been unchanged from 1960. Approx 5% of the income is spent there. When prices go up, people spend less money on the industry.
The red bars are what affects the industry.
What Red Lobster has been seeing for several years is that people with lower income, who used to celebrate at our restaurants 4 to 5 times a year, they come now only 3 or 4 times a year.
It’s hard to crack the code to get the people into the restaurants and more frequently. Red Lobster’s main traffic is on Friday night, two shifts on Saturdays and Sundays. The rest of the time RL is struggling with keeping the balance.
The industry is struggling with how to create more values for the customers to get them more frequently into the restaurants.
Here you see who is doing well and who is struggling.
Aggressive pricing is the New Normal in Casual Dining and has, so far, not slowed the downward trend.
The trend for Dine-In and To-Go Sales is similar.