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Joint Restaurant Experiment Ends as Palm Coast’s Red Lobster Closes and Olive Garden Grows Larger

| May 6, 2014

It'll soon be all olive. (c FlaglerLive)

It’ll soon be all olive. (c FlaglerLive)

Three years ago Darden Restaurants opened a Red Lobster and an Olive Garden in Palm Coast’s Target shopping center. The restaurants had separate dining rooms but a joint kitchen, and were designed to give Darden a competitive advantage by more efficiently providing different brands under the same roof.

That joint operation is ending.

The Orlando Sentinel on Tuesday reported that Orlando-Based Darden, whose shareholders have been chafing with management, has already closed two similar joint operations over the weekend (in Georgia and South Carolina) and will convert the Palm Coast restaurant and three others like it into stand-alone Olive Gardens in the near future. The time of the change-over is not precisely known, but it will not affect the Olive Garden side of the operation. Darden plans to sell or spin off its Red Lobsters.

“That was like a prototype of a combined store format, which I thought made sense, because you only have one set of rest rooms, you only have one bar and one kitchen,” said Toby Tobin, the Realtor and publisher, the real estate website covering Palm Coast and Flagler County. “I wouldn’t read that the format was unsuccessful as much as I would read that for whatever reason, Red Lobsters are not as successful as they once were.”

For the Target shopping center, Red Lobster’s closure is the second blow in six weeks: in late March, Books-A-Million announced that it was closing its store there, eliminating Palm Coast’s only general interest bookstore. But the elimination of Red Lobster is not equivalent to a restaurant closing outright so much as the loss of some choice for restaurant-goers. The restaurant space itself will simply convert to Olive Garden’s uses, preserving some—but by no means all—of the jobs that would have otherwise been lost had the restaurant closed outright.

Aside from Red Lobster and Olive Garden, Darden owns Longhorn Steakhouse, Bahama Breeze, the Capital Grill, Eddie V’s, the Yard House chain and Seasons 52. Combined, the company runs more than 2,000 restaurants, including—as of the end of 2013– 822 Olive Gardens and 678 Red Lobsters. Three weeks ago, when the company decided to spin off or sell the Red Lobster operations, a group of shareholders sued, claiming the company had no right to change its bylaws to prevent shareholders from having a say in the fate of Red Lobster.

The company as a whole has been struggling. Sales at established restaurants fell 8.8 percent at Red Lobster and 5.4 percent at Olive Garden in the third quarter ended Feb. 23. Losses at Red Lobster have been especially steep, with percentage declines in customer visits for nine straight months.

Restaurants open and close almost weekly in Palm Coast and Flagler County, Tobin said, few of them garnering much attention. The change with live Garden and Red Lobster “is newsworthy because it’s a national chain,” he said.

Beau Falgout, Palm Coast’s senior planner, could not be reached Tuesday.

23 Responses for “Joint Restaurant Experiment Ends as Palm Coast’s Red Lobster Closes and Olive Garden Grows Larger”

  1. Jon Hardison says:

    What? Olive Garden is gross! I’ve never been in one and had what I’d call a good meal. In fact, after the FYO concert last night we went to Red Lobster. It’s unbelievable to me that they’d close it. The staff are always great. Especially Kal who has waited on us twice. My son loves his twisty mustache and my wife and I think he’s a great guy. The food is a million times better than OG… I think they’re making a mistake.

    It makes sense that RL would see revenue losses considering recent events and Central Florida residents’ financial issues. But why would they kill it now when things are on the upswing? It’s a shame.

    • Nancy N. says:

      Why would Darden close the Red Lobster? Because they are spinning Red Lobster off into a separate company and selling it, and there is no practical way to sell a restaurant that shares a kitchen with another restaurant belonging to another company! And, as noted in the article, Red Lobster is far underperforming Olive Garden in Darden’s portfolio, so keeping the Red Lobster open while closing the Olive Garden would not make financial sense. The Olive Garden is worth far more as an asset than the Red Lobster is.

  2. confidential says:

    I could see Town Center little by little vacating businesses simply because Flagler County and its cities endure the highest unemployment rate again. Will be one more empty store front mall on our pockets, because the commercial loans go unpaid thru bankruptcy court and then we are forced to bailouts.
    Right after this increased again unemployment news the price of homes also dropped as more foreclosed houses or lower price ones showed up in the real estate listings. Means people again leaving seeking for jobs. Meanwhile County Economic Development and City BAC pat themselves on the back cheered by FCCOC, while wasting our taxes in failed plans that only accommodates the well connected elite, but not really creating jobs. Example city hires a Rhode Island consultant to pick and choose which contractor to build the city hall rejected by the people…! Creating jobs elsewhere (RI) with our tax funds…for the benefit of very few in this city.

  3. Chris says:

    Sad news. From what I hear around town is the BIG LOTS is going in where Books-A-Million is… please tell me that isn’t true.

  4. Florida Native. says:

    @ Chris. Tell me IT IS TRUE. By the way Palm Coast is one hell of a place to put a duel restaurant and use it for a Guinea Pig in a financially and economically challenged market like PC. That had disaster written all over it. But never fear. We have three McDonalds. That tire company that broke ground on 100 and then left town might be smarter than we gave them credit for.


    Never understood opening a restaurant serving frozen, corporate seafood in an area where fresh seafood is so easily available. Seemed kind of silly to me.

  6. Anonymous says:

    TO Confidential: Why are you always bashing Palm Coast? Unlike you most of us love it here and do all we can to make it an even better place. If its soooo bad here please move on! I for one am very happy with the progress of the County Economic Development and City BAC. Look at the numbers and the stats, look at where we were before and where we are now.Also, ask all the people who have been assisted by them.

  7. confidential says:

    BL should be called instead Big China Made Garbage…My USA made little story;
    sick and tired of buying at over 10 bucks each flour sifters only Made in China available in our outsourced only markets just to last about a year or so each…I seriously searched for some well Made in the USA even if a vintage one…found me those USA aluminum heavy duty made by Foley in 1950 on E-bay…had my son ordering it, so I do not to have to deal with the pay pal dudes and got it by mail. What an emotion to receive my Foley 1950 USA Made flour sifter that will last till well over I’ll be gone. Now I have me a good old reliable second hand sifter that will not drop anymore pieces of plastic while disintegrating on my cake. cookies or bread mixes. The price was less including shipping than the low grade made in Asia.’
    If we want a better economy and our jobs back we need to start demanding and buying Made in the USA even if vintage as there is no other on the market and lets read the labels. We need our jobs back so places like Red Lobster do not go out of business due to poor sales as is not the rich that dines at Red Lobster but our middle class.

    • Outsider says:

      Here, here! I am so sick of crap made in China that breaks in no time. I paid 80 bucks for a pair of boots for my daughter one Christmas and by February the seams ripped apart. Don’t even get me started on those hose nozzles where in two months more water comes out the sides than through the proper hole. I could go on and on, and the big problem is there is nothing else available. I would happily pay twice as much for something that would last a reasonable amount of time. I know we can do it here in the U.S., but the profit margin is higher for that foreign made garbage.

      • Anonymous says:

        Well, you can thank a lot of the American retail giants who sell that crap for what you get. Thank them for sending all those jobs overseas. They are making more profit because of lower labor costs and you are getting the products of the labor that they are are willing to pay for.

        • Steve Wolfe says:

          While we’re on it…I recall when Harbor Freight began selling tools incredibly cheap, and I couldn’t help myself so I indulged in a long list of overdue purchasing. It was the epitome of cheap crap. Some of it literally fell apart in my hands the first use. Started seeing newspaper stories (before AlGore blessed us with the interweb) that China subsidizes its tool manufacturers in order to keep prices low enough to beat our domestic tool prices. They flooded the market with their cheap crap. But it worked for them. I would not be surprised to find that China uses some of the billions of dollars of their trade surplus as well as the incredible flood of cash from our loan repayments to subsidize everything they export to us to further dominate our markets. Can’t blame them, though. They are making so much money off of us that they have trouble investing it in their own country. They can’t build things fast enough to put all the money to work. Imagine that money kept here. By the way, isn’t it clever of us to borrow from China some of the very same money we pay them for stuff? To them it’s another investment. For us it’s the second bite of the apple. Just sayin.

  8. Steve Wolfe says:

    Red Lobster, as with many chains, often seeks exposure near interstate ramps. I’m sure that when it was planned, the business climate in PC made sense to corporate. The current reality is that our demographics have suffered losses from the real estate bubble, to which PC was more vulnerable than some. Flagler County has the worst unemployment in the state now, so there is little incentive to open new business here, and difficulty just retaining businesses. I believe that more can be done to make Flagler and PC more attractive to business, but I don’t see the effort. Someone please educate me about the efforts to attract new business here, which would provide jobs so more people can pay mortgages, buy cars, and go out to eat. Now I’m going to Turtle Shack to try their acclaimed burger. Mmmmmm….surfside service….cold beer….charred flesh…. Let’s eat!

  9. RHWeir says:

    Where Darden sees failure in a similar strategy, a local restauranteur seems to be giving it a go. I see that Tuscan Grille and Sweetwater are to be very close neighbors. In the same building?

  10. Nancy N. says:

    Why is everyone trying to make the conversion of Red Lobster into a Palm Coast “issue”? If you actually read the article, you would know that this is a chain wide issue, not a local one, and that Darden is closing or converting ALL of its joint Red Lobster/Olive Garden restaurants due to the upcoming spin-off of Red Lobster. This is not a “Palm Coast financial failure” or “Palm Coast chasing away another business”. This is a national company taking nationwide action to execute on an upcoming corporate spin-off. In fact, if anything, it’s a win for Palm Coast because they are closing some of the joint restaurants entirely and apparently the Palm Coast one is performing well enough to escape that fate, and they want to expand the Olive Garden. That’s GOOD NEWS, not a portent of doom!

  11. Bye LobsterGarden says:

    That’s just as well. Red Lobster doesn’t have quality meals. Its only worth going there during the endless shrimp promotions. Every time I go there we experience either a problem with the staff or with the food being of poor quality.

    In response to Jon, Olive Garden is vastly superior in terms of quality of food to Red Lobster. Maybe you just don’t like Italian food, but Olive Garden has great tasting meals.

    • Outsider says:

      Only because they are loaded with salt; you wake up in the morning all bloated from a sodium overdose. The Tuscan Grill is phenomenal and they are reasonably priced for the quality. I’ve heard rave reviews of a new Italian place in Bunnell….can’t wait to try that and help a good local business make a go of it. Let’s make sure the locally owned and operated businesses survive.

  12. tulip says:

    There are so very many eating places in Palm Coast & Flagler Beach that it is amazing so many of them actually do well enough to stay in business. I realize that many also fail but the ones that do are generally serving terrible food, etc. Now we have Chic-fil-a coming into the old Perkins—yep another eating place.

  13. confidential says:

    Anonymous, unlike you while I still like Palm Coast, I do not burry my head in the sands and offer the other pocket to be depleted for wasted taxes in frivolities we don’t need yet.
    Nancy, then Books a Million also closed over corporate reorganization and not over slow sales? Most closing businesses around us do not get the exposure that very few get.

  14. RAKA says:


  15. Anonymous says:

    olive garden is doing well because pasta is the cheapest dish around as compare to shrimp and lobster

  16. Mary says:

    I don’t know how PC thinks they can support all the restaurants they seem to think we need. A good portion of the population is elderly and either go for the buffets or eat at home. I do believe that there is a huge unemployment rate here and am unsure how these people (even with unemployment) can afford to eat out. My husband and I are both retired and I shop weekly and prepare a meal for us each night. I cant see spending $20 or $30 for some sub standard food when I can purchase quality meats with that amount of money. We too love Palm Coast, but at this point there are more than enough restaurants here. I still find it amazing how people with NO money can still fork out these prices.

  17. Judy Vedova says:

    We went to Flagler tonight thinking Red Lobster was still there. People I was with thought I was crazy when all we saw was Olive Garden. We are definitely behind the times. But what was really wierd was the Olive Garden was making people wait 15 to 35 minutes for a table. We got in after a 15 minute wait and there were so many empty tables! Some people were not willing to wait and left for another restaurant! Was there not enough wait staff? This place is destined for failure if they continue this practice? I am sure there are people looking for jobs in this area. To drive away customers with long wait times when they have empty tables does not seem like good business practices!

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