Restaurant chains: The activists’ cookbook

A break-up on the menu?

THE car park was nearly full and there was a queue for tables when your correspondent popped into a Red Lobster restaurant just off a busy highway in Decatur, east of Atlanta. For good reason: Red Lobster offers decent-value fare in a smart if somewhat bland atmosphere: low lights, leather banquettes, lots of nautical flags and polished wood. A family of four can dine on shrimp, scallops and lobster for around $65.Despite appearances, all is not well for Red Lobster, which has more than 700 outposts across the United States and Canada. In its 2013 fiscal year it suffered declines in its overall sales: fewer diners came, and each spent less on average.So Red Lobster’s parent company, Darden Restaurants, has joined the swelling list of American companies, from Apple to Hertz, to come under attack from a gathering swarm of activist shareholders, demanding big changes and mustering support from other shareholders to force managers to comply.Last month Darden Restaurants tried to head off the pressure by promising to spin off or sell its struggling seafood chain, aiming to do so in the first half of this year. But…

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