Red Lobster closes 50 restaurants as it tries to avoid bankruptcy

Endless shrimp promotions might have been one reason Red Lobster is closing 50 restaurants - UnSplash +

The company’s endless shrimp promotions may have been too generous

The restaurant business has been tough since the pandemic and for evidence, you need look no further than Red Lobster. The seafood restaurant franchise has announced it is closing 50 of its restaurants.

The chain has been struggling since last year when its all-you-can-eat promotions underestimated consumers’ appetite for shrimp and crab legs. The promotions put a dent in the company’s earnings and it has yet to recover.

Like many other restaurants, Red Lobster has contended with inflation, seeking a balance between higher costs and patrons’ tolerance for higher menu prices. TagEX announced today that it is auctioning off kitchen equipment from the doomed restaurant locations.

“As of today, select Red Lobster locations are CLOSED,” TagEX said on its website. “On our Restaurant Equipment marketplace, we are auctioning off 50+ locations across the country. These auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on. Auctions are live and will end periodically on Thursday, May 16, 2024.”

Seeking a buyer?

In late April, CNBC reported that Red Lobster was searching for a buyer to stave off bankruptcy. According to the business news network, the company has a few options. 

Selling the company is the best-case scenario. It could also declare bankruptcy and try to reorganize or it could let its creditors take over the company.

Consumers posting reviews at ConsumerAffairs have generally agreed that Red Lobster was once very good, but these days not so much. Candace, of Las Vegas, posted a review that hints at what might have gone wrong.

“First, let me say that I have been going to Red Lobster with ny family for most of my life, but after today I will never be back,” Candace wrote. “I went to Red Lobster with my son and my mother to have the endless shrimp. Now, since I've been going there they have allowed you to take whatever you don't eat home ...that is no longer the case.” 

The list

Is your neighborhood Red Lobster closing? Various media reports have compiled this list:

Alabama: Huntsville, AL; Decatur, AL; Mobile, AL
Arizona: Oro Valley, AZ
California: Fremont, CA; Montclair, CA; Rohnert Park, CA; Sacramento, CA; San Diego, CA; Torrance, CA
Colorado: Lakewood, CO; Lone Tree, CO; Wheat Ridge, CO; Denver, CO
Florida: Hialeah, Florida; Tampa, FL (2); Largo, FL; Kissimmee, FL; Leesburg, FL; Orlando, FL (3); Altamonte Springs, FL; Gainesville, FL; Jacksonville, FL (3) Sanford, FL; Daytona Beach Shores, FL
Georgia: Roswell, GA; Athens, GA; Dublin, GA
Idaho: Lewiston, ID
Illinois: Bloomingdale, IL; Danville, IL
Indiana: Indianapolis, IN: Elkhart, IN
Iowa: Waterloo, IA
Kansas: Olathe, KS; Kansas City, KS
Louisiana: Bossier City, LA
Maryland: Columbia, MD; Laurel, MD; Silver Spring, MD; Gaithersburg, MD
Mississippi: Jackson, MS
Missouri: Jefferson City, MO
New Jersey: Ledgewood, NJ: Lawrenceville, NJ: East Brunswick, NJ: Bridgewater, NJ
New York: Lakewood, NY; Buffalo, NY; Amherst, NY; Williamsville, NY; Rochester, NY; Poughkeepsie, NY; Stony Brook, NY; Kingston, NY; Scarsdale, NY; Nanuet, NY
North Carolina: Rocky Mount, NC; Cary, NC; Durham, NC; Burlington, NC
North Dakota: Grand Forks, ND
Oklahoma: Oklahoma City, OK; Stillwater, OK; Lawton, OK
Pennsylvania: Erie, PA
South Carolina: Myrtle Beach, SC
Tennessee: Memphis, TN
Texas: Dallas, TX (2); Lake Jackson, TX; Houston, TX; Pasadena, TX; Tyler, TX; Longview, TX; Lufkin, TX
Virginia: Newport News, VA; Williamsburg, VA; Colonial Heights, VA
Washington: Silverdale, WA
Wisconsin: La Crosse, WI; Wauwatosa, WI

Red Lobster did not immediately respond to ConsumerAffairs’ request for comment on the store closures or what this might mean for the chain’s customers going forward.

Quick and easy. Find an auto warranty partner now.