Is Red Lobster Actually Shutting Down? Here's What We Know

Red Lobster is generally considered a powerhouse in the seafood restaurant industry. For instance, a comparison of Red Lobster and Joe's Crab Shack found the former establishment besting the latter thanks to factors like atmosphere and location availability. Despite its success, NBC News reports that Red Lobster is currently facing the closure of over 50 locations. This announcement comes not long after stakeholder Thai Union's decision to pull their investment from the chain, with the group's CEO Thiraphong Chansiri stating, "We have determined that Red Lobster's ongoing financial requirements no longer align with our capital allocation priorities."

It should be noted that Red Lobster currently has about 700 restaurants situated throughout the U.S. with several international franchises, which means the chain will remain in operation despite the closures. As for which restaurants are closing: California, Colorado, Florida, and Maryland will see the most closures, with other states' locations on the chopping block. It's unlikely that Red Lobster will join the list of chain restaurants you forgot existed any time soon, but there's no denying that the establishment is up against some significant challenges.

Despite the company reportedly considering Chapter 11 bankruptcy to restructure debt and renegotiate costly leases, Red Lobster has held a steady position among seafood chains in the U.S. (per Statista). In fact, the restaurant's sales in 2021 totaled a whopping $2.3 billion, which shows that the establishment remains a popular choice among consumers (which could have something to do with the fact that Red Lobster is included in the restaurant chains that use the highest-quality seafood).

While sales figures remained impressive through recent years, Red Lobster is not immune to trouble. Consider that a 2023 "Endless Shrimp" promotion led to an operating loss of $11 million in the third quarter of that year. The chain also experienced the abrupt exit of several newly minted C-suite executives between 2021 and 2022, including the CEO. These factors are even more impactful when you consider the evolving preferences of consumers, who appear less motivated to visit establishments that focus on seafood exclusively. There's no telling what the future might hold for the chain, but it seems changes must occur soon to prevent Red Lobster from facing further financial setbacks.