Amid a shifting tide of casual dining trends, Darden restaurant group will throw Red Lobster overboard and greatly scale back its two other flagship brands. In a statement to shareholders, the company says it plans to spin off or sell the legendary seafood chain and its 705 locations across the United States and Canada.
Darden also will halt expansion of the Olive Garden and drastically limit the number of new LongHorn Steakhouse branches. Moving forward, the Florida-based company will concentrate on its more upscale "specialty restaurants" like Eddie V's, Yard House, Bahama Breeze, Seasons 52 and Capital Grille.
New specialty locations will be built across the nation in the coming year, albeit at a slower pace than previously announced. Darden's core brands have taken a hit during the recession as consumers lean toward less expensive fast-casual dining options like Panera Bread, Chipotle, Smashburger and Pei Wei.
Despite a continent-wide remodeling effort, poor Red Lobster saw customer traffic plummet nearly 8 percent in the last quarter compared to the same time last year. Olive Garden and LongHorn had modest sales gains, though primarily due to massive expansion efforts.