May 19, 2024
Red Lobster, one of the first U.S. casual-dining chains and an innovator in the sector, suffered from strategic challenges. An all-you-can eat shrimp deal that executives hoped would turn the chain around contributed to millions of dollars in losses.

Red Lobster’s Plan to Save Itself Ended Up Destroying It

I’ve never been to Red Lobster, but they’re everywhere, at least for now. It’s the nation’s largest seafood chain, and it got cooked over various factors, but one consumer deal appears to have been the straw that broke the camel’s back: the “all you can eat” shrimp deal.

The corporate brass thought this pitch could be the draw to turn around the chain. Instead, it cost them millions, leading to yesterday’s news that Chapter 11 bankruptcy is imminent and will be filed before Memorial Day. Hundreds of millions of dollars in debt are set to be restructured, with dozens of locations slated for closure (via WSJ):

Interesting Read…

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