Restaurant chain Red Lobster has implemented several initiatives to try to turn around its financial performance after it declared bankruptcy in May 2024.
Among multiple actions it has taken, it hired a new CEO, added new seafood boils and cocktails, and partnered with celebrities on social media collaborations.
Other efforts have included the closures of restaurants across the U.S., including two in Michigan and Texas earlier this year.
More recently, after 56 years, the chain’s oldest continuously operating location in Tallahassee, Florida, closed on 24 May, per the Tallahassee Democrat, and Red Lobster also confirmed the closure of its location in Chambersburg, Pennsylvania, per ABC 27.
Elsewhere, the company recently shut down two Kansas City, Kansas- and Missouri-based locations.
“We can confirm that the Overland Park and Independence restaurants permanently closed on 24 May as part of our normal course of business,” Red Lobster told Fox 4.
Future plans for closures include the chain’s restaurant in Times Square in New York City on 14 June. After operating that location for 23 years, the company told ABC 7 that extensive and prolonged construction at the building has significantly impacted access, visibility, and foot traffic, making continued operations economically unsustainable.
”Times Square has been an important chapter in Red Lobster's history, and this was a difficult decision,” Red Lobster said.
The chain has stressed that the closures are made on an individual basis and solely relate to the operations of each restaurant, not the chain as a whole.
“Red Lobster continuously evaluates individual restaurant performance and lease terms and may, from time to time, choose to close select restaurants,” the company said in a statement. “Those closures reflected specific decisions tied to the unique operating conditions at those restaurants. We remain committed to making thoughtful decisions that position Red Lobster for long-term success, stability, and growth.“
Pacific Management Consulting Group Founder and CEO John Gordon told SeafoodSource that for the stores that closed or are set to close, Red Lobster executives likely conducted an analysis and determined that those locations were “negative cash flow stores.”
“Closing restaurants is not unusual in this environment,” Gordon said, noting that some other casual dining chains are closing locations, too. “It’s not a bad thing to close restaurants until there are many more stores closed.”
Red Lobster has also revamped its Endless Shrimp promotion, which was cited as one of the main factors causing the restaurant chain’s financial problems that led to its bankruptcy.
Launched in April, the new promotion is being offered for a limited time, not as a standard menu item, and at a higher price point than the previous Ultimate Endless Shrimp program.
"This is about putting our guests first and bringing back something they truly love," Red Lobster CEO Damola Adamolekun said. "Endless Shrimp has been a part of Red Lobster's legacy for 20 years, and our guests have never stopped asking for it. We're excited to bring it back, for a limited time, in a way that works for our business today and honors what made it special from the beginning.”
The new Endless Shrimp promotion includes longstanding favorites and a new flavor “inspired by one of the internet's favorite dishes:” Marry Me Shrimp. Red Lobster's take on the viral dish includes shrimp in a tomato cream sauce, topped with a garlic and herb crumble.
Other dishes include Shrimp Linguine Alfredo, Walt’s Favorite Shrimp, Parrot Isle Coconut Shrimp, and Garlic Shrimp Scampi. Served with a choice of side, guests can order Endless Shrimp for USD 25 (EUR 22), compared to USD 20 (EUR 17), when the promotion was a permanent fixture on Red Lobster’s menu years ago.
Reintroducing the promotion will likely stimulate consumer appeal, Foodservice Results CEO Darren Tristano told SeafoodSource, and at the higher price point, the offer should be less financially perilous for Red Lobster.
“Limiting the promotion will also keep the inherent risk down, and as long as the chain has contracted their shrimp purchase, the brand should do well with the promotion,” he said.
Bank of America Senior Restaurant Analyst Sara Senatore told GMA that value offerings are great avenues to get customers in the door.
"We are seeing consumers [who] still want to go out to eat, but they go out less frequently," she said. "When they do go out, what we're seeing is that they are choosing to spend their hard-earned money in places that offer them great value and also great experience."
There is some risk, however, that a value promotion brings in traffic but only for that item, Senatore added.
Additionally, Gordon still said he was unsure whether Red Lobster is making enough profit on the deal, which depends on the company’s wholesale cost of shrimp, which has risen in recent years, and whether Red Lobster guests will respond to the bump in price for Endless Shrimp.
Regardless, the new promotion is likely to attract customers, he said.
