Red Lobster tests no-waiter, no-tip service

It's an attempt to lure diners back from rivals like Chipotle, where food comes faster and gratuities aren't expected.

By Aimee Picchi Mar 19, 2013 11:52AM

Customers walk into a Red Lobster restaurant in Hialeah, Fla. on Sept. 6, 2012 (© Alan Diaz/AP Photo)Darden Restaurants' (DRI) Red Lobster seems to be testing the adage "If you can't beat 'em, join 'em."


Amid challenges from casual-dining chains such as Chipotle (CMG) and Panera Bread (PNRA), which offer no-tip counter service, Red Lobster is testing a new option that plays the same game. 


The chain is trying two versions of what's called fast-casual dining, which is counter service that appeals to diners by cutting out the need for tips while delivering food faster than traditional sit-down restaurants. 


Red Lobster calls the new service "Seaside Express" and is testing it in two locations near Orlando, Fla., from 11 a.m. to 3 p.m. daily.


At one trial restaurant, customers order at a new counter installed in the restaurant's lobby, then pour their own drinks at a Coca-Cola (KO) machine, the Orlando Sentinel reports. At the second restaurant, customers order at the bar and are served drinks in plastic cups. 


The menus differ from that of Red Lobster's main restaurant, with entrees ranging in price from $6.99 to $8.99 and including dishes such as a shrimp salad sandwich and a lobster grilled-cheese sandwich. One way the chain is cutting costs, though, is that diners get only one Cheddar Bay biscuit each instead of a basket of them, the newspaper says. 


The menus say customers shouldn't tip, although servers bring food and clear off the tables, and the credit card slips still have places for gratuities, the story notes. 


Will the bid to compete with Chipotle work? One business school professor, H.G. Parsa of the University of Denver, expressed pessimism. He told the Sentinel that Red Lobster could "dilute the brand" by getting away from its image as a sit-down restaurant.


Will Darden expand the idea to its other restaurant chains, such as Olive Garden and LongHorn? The newspaper notes the chain wouldn't say. 


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530Comments
Mar 19, 2013 12:45PM
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 If I want to get cheap food and not required to tip, I'll go to Mcdonalds. I have been in the restaurant business for over 25 years and I can tell you what makes a successful restaurant. Good food, and great service. That's really it. What about cost you might say? Look, Ruth Chris charges about $50 a plate right? So are they suffering? No, because you are getting your moneys worth. When I go out, it is a time to relax, be served and enjoy myself. I don't want a plastic cup, take a number fast food. There are times like that, eating good steak and seafood is not one of them. Everyone thinks cheaper is better, but actually, most people are willing to pay a premium for good service and a friendly atmosphere. Olive Garden and Red Robin are a couple of places that do this very well. I will pay $12 for a hamburger there, because its good, the service is great, and I feel like I am not a faceless dollar sign when I walk in the doors. Just my 2 cents for those who don't understand the restaurant model. Restaurants don't make money hand over fist like most think either. An acceptable food cost is between 25-30%. That means for ever dollar you spend, 30 cents goes directly for the food, and we haven't even added labor, and cost of operations. I own a restaurant and am lucky to make 25 cents for every dollar I take in. My waittresses have the incentive to provide good service because they are hoping for good tips. It's a win-win.
Mar 19, 2013 12:38PM
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I thought they are already doing this.  It's called Long John Silver's. HeHe
Mar 19, 2013 12:59PM
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How about concentrating on getting the food right.  The quality and selection has gone way done, that's why people aren't going.  If you get the food right, people will come back.  Nobody wants to spend good money for a bad meal!
Mar 19, 2013 1:16PM
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Wow, this is sad.  Darden is trying everything under the sun to keep these restaurants afloat, instead of preparing great food at a reasonable cost.   Red Lobster will not fare well under this new plan, and this will also be scrapped as a waste of money.  Time to find a new CEO for this place.  
Mar 19, 2013 12:07PM
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Dumbest idea ever!  Fast food seafood sounds disgusting!!

 

Whichever brilliant employee at Red Lobster who thought this might work should be terminated...

 

what a joke

Mar 19, 2013 12:56PM
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If Dardin really wanted to shake up the industry and try a genuine "No Tip" service, they could eliminate gratuity and just pay their servers like other employees. Any tips could be pooled and shared by all employees from the cooks and servers to the busboys and dishwashers - they all contribute to the cleanliness and dining experience patrons expect. 
Mar 19, 2013 1:11PM
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I kind of like Red Lobster the way it is. They seem to be making it into a copy of McDonalds, Burger King, KFC, etc. If I want fast food I go to a fast food restaurant. If I want to be comfortable, I go to a sit down place and let somebody wait on me. Let's not blur the lines too much.
Mar 19, 2013 12:07PM
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Sounds awful.  Fast cooked seafood?  Sounds like the recipe for some all-night hurling.
Mar 19, 2013 12:48PM
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Why is it that consumers have to subsidize the owners employee salary.  Like any other business, shouldn't owners pay there employees a decent amount . I never understood that. In college we were paid a minimum amount of 1.15 to 2.00 but we were also expected to clean up the restaurant and kitchen on that amount.Red lobster needs to go back to what it was known for..good food...the last 2 or 3 times, poor quality and a minimal amount of food...

Mar 19, 2013 12:41PM
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This is what happens to chain restraints.  People are turning away from them for more local places because the service and food is better, not to mention it makes a big difference when you can go over and talk to and know the owner.
Mar 19, 2013 1:01PM
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Just what we need more people unemployed!
Mar 19, 2013 12:36PM
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If I want to go to McDonalds. I will  go there to eat. This fool needs to work for them. When I go to Red Lobster. I go to set down, order my food, drinks and eat. Get anything I want and pretty much when I want it. Good service and good tips.
Mar 19, 2013 12:59PM
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Isn't this concept already in play via Long John Silvers.
Mar 19, 2013 12:47PM
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seems like most can not afford to eat out anymore so it won't make a big difference.
Mar 19, 2013 12:36PM
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This doesn't stop them from having a tip jar nor people from leaving tips at the table.  It's a nice way to not guilt people into feeling like they have to tip whenever they go out to eat.  Buffets even ask for tips and they don't even serve you a drink.
Mar 19, 2013 1:45PM
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They won't lure former customers back this way. Quality Product, Professional Trained Staff, and Value for dollars spent are what customers want and are drawn too; not short order ease of access, herded like cattle down a feeding troth.
Mar 19, 2013 12:34PM
Mar 19, 2013 1:12PM
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N o, when i eat out i liked to be served a hot meal, not a sandwich. I can have that at home. Leave Red Losbter in N.J. alone
Mar 19, 2013 12:21PM
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Sounds right, if your eating at red lobster you wouldn't know what good seafood is anyway so why not make it faster and easier.  And not surprised to see same company owns Olive Garden, I've eaten there once, just once and that was more than enough.
Mar 19, 2013 9:01PM
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Pay your servers AT LEAST minimum wage in stead of the cop-out *servers wage* and make it public knowledge that you do not expect your customers to pay your workers...because you do it.  The idea of T.I.P.S. was for a customer to give a server some extra money to thank them for quality service.....NOT subsidize their wages because the restaurant doesn't pay them.
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