Off the Menu: The downfall of Red Lobster (2024)

The big story in the restaurant trade press this month has been the financial woes of Red Lobster Hospitality LLC, the operator of some 700 Red Lobster Seafood restaurants worldwide.

Known for its seafood-focused menu and its famous Cheddar Bay biscuits, the chain has gone into something resembling a financial tailspin over the last several weeks, closing down nearly a hundred locations and, in some instances, almost immediately auctioning off equipment and furnishings.

Currently owned by the Thai Union Group, a Bangkok-based seafood canning company, Red Lobster is reportedly preparing to file for Chapter 11 bankruptcy protection.

The chain of events that led to Red Lobster’s current distress is unfortunately all too familiar, involving management missteps, shifts in the consumer preferences, and various ownership shuffles. Change a few of the details and one can just as easily be describing the recent history of other once-highflying casual dining nameplates like Friendly’s or Boston Market.

In the case of Red Lobster, inflated food and labor costs along with shifts in customer preferences are primarily responsible for the brand’s current difficulties.

Much media attention has also been focused on a $20 Ultimate Endless Shrimp deal the chain promoted starting in 2023, a marketing strategy that the company subsequently blamed for an $11 million operating loss that year. That shrimp fiasco mirrored a similar misstep, a 2003 “Endless Crab” promotion, which twenty years earlier had lost Red Lobster $3.3 million over a seven-week span of time.

The real story, however, is just how tenuous success in the dining out business can be. Even seemingly sophisticated restaurant organizations can often find themselves only a bad management decision or two away from financial disaster.

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Side Dishes:

On Sunday, June 2, White Lion Brewing Company in Springfield will be hosting a Jazz Brunch from noon until 3 p.m.

Masala Jazz will be performing, and White Lion promises an “elevated” brunch menu for the occasion.

White Lion’s downtown Springfield location answers at 413-455-0820.

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This month participating Burger King restaurants are celebrating the chain’s 70th anniversary by offering a Birthday Pie Slice dessert. Made with birthday cake-flavored pie filling in a cookie crumb crust, the pie is garnished with whipped topping and multicolored “rainbow” sprinkles.

The Birthday Pie Slice, which is priced at $2.59, will be on the menu for a limited time.

Burger King is also bringing back its patty melt sandwiches. The Philly Melt will feature two flame-broiled beef patties topped with grilled peppers and onions, Swiss cheese, and a dollop of BK’s “Royal Sauce,” all presented on toast

A similar sandwich build will be used for the Classic BK Melt, which will incorporate two beef patties, grilled onions, American cheese, and Royal Sauce all layered together between toast slices.

These Melt sandwiches are also a limited-time addition to the BK menu.

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Watermelon, the restaurant industry’s unofficial flavor of summer, is starting to make its seasonal appearance.

The beverage and snack chain Dunkin’ has released a late spring lineup that includes a Kiwi Watermelon Dunkin’ Refresher, which is available in either green tea or lemonade variations.

Watermelon is also making a cameo appearance in Dunkin’s pastry case as the chain promotes a Watermelon Burst Donut. Filled with watermelon-flavored jelly, the donut is dusted with tinted-red sugar.

On the savory snack side, Dunkin’ is now featuring a Green Goddess Wrap, a piece of lavash bread wrapped around a filling of egg whites, farro, sundried tomatoes, spinach, feta, and green goddess dressing.

Dunkin’ is also “teasing” the faithful among its customer base with hints that the brand has something special planned for National Donut Day, June 7.

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The Wales Irish Pub in Wales is sponsoring a Chili Cook Off on Saturday, June 1, from 11 a.m. to 3 p.m. The competition, which has an entry fee of $15, will award prizes for first, second, and third place finishers among the chili creators. The sign-up deadline for those who wish to enter is May 25, and a percentage of the proceeds from this event will be donated to local VFW posts.

For more details, contact the Wales Irish Pub at 413-245-1357.

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Pizza Hut, the Yum! Brands pizza chain, is flirting with the burger business as it introduces a Cheeseburger Melt to its menu.

The Cheeseburger Melt isn’t a true bun-and-beef construct. Instead, it’s a pizza crust foldover that’s filled with ground beef, bacon, onions, and two cheeses. In further emulation of a fast food burger, the Cheeseburger Melt comes with a side of “Burger Sauce” for drizzling or dipping.

Promoted as an innovation that represents a more convenient way to enjoy the burger experience, the Cheeseburger Melt joins the four other “melt” handhelds Pizza Hut has previously introduced.

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The Crest Room in West Springfield has brought back Trivia Night. Held every Tuesday from 6:30 p.m. to 8:30 p.m., Trivia Night is smartphone-based and features team competition, with prizes awarded to the top two teams.

Open seven days from 11 a.m. to 9 p.m. and later on weekends, the Crest Room offers weekday menu features as well as its house specialty, smokehouse barbecue.

The Crest Room answers at 413-739-7700.

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For those who like a serious splash of heat with their dinner, this summer threatens to be a season during which Sriracha, one of the most popular of hot sauce condiments, might be AWOL from retail store shelves.

Irwindale, CA-based Huy Fong Foods, Sriracha’s manufacturer, has reportedly suspended production of the sauce until September, citing a shortage of red jalapeno peppers. The peppers, a key ingredient in Sriracha’s recipe, are in short supply due to a winter-long drought across northern Mexico. The dry conditions prevented the peppers from ripening properly, making them unsuitable for use in Sriracha.

The summer-long shutdown at Huy Fong Foods is timed to end with the harvest of this summer’s jalapeno crop and a hoped-for renewed availability of ripe peppers.

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The Shortstop Bar & Grill in Westfield has given the summer dining season an early start by bringing back lobster rolls.

The iconic shoreside sandwich is available in both its popular variations - as chilled lobster salad with mayo and lettuce or “Connecticut-style,” with hot buttered lobster meat piled into a toasted roll.

Both versions are served with fries and a side of coleslaw.

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Call the Shortstop Bar & Grill at 413-642-6370.

Cracker Barrel Old Country store locations have recently added Watermelon Lemonade to its beverage line-up. Adults also have the option of enjoying a Watermelon Spritzer made with lemon-lime soda and watermelon puree, then spiked with Roscato Moscato.

Cracker Barrel has also hopped aboard the “sweet and spicy” bandwagon, introducing two “bee sting” entree option, both of which feature a proprietary hot honey glaze.

Bee Sting Chicken Tenders, which are finished with the new hot honey, are served with two sides and the choices of biscuits or corn muffins. A Bee Sting Chicken Sandwich is similarly given the “swicy” treatment before being partnered with a buttermilk bun and finished with pickles and mayonnaise.

In addition to the bee sting flavor options, Cracker Barrel will this summer be serving a ten-ounce New Your Strip Steak finished with garlic butter. The steak will be available with two sides and biscuits or muffins and can also be enjoyed “breakfast style” with eggs or as a dinner combo with chicken or shrimp.

There are Cracker Barrel Old Country Store locations on Whiting Farms Road in Holyoke and on Route 20 in Sturbridge.

Hugh Robert is a faculty member in Holyoke Community College’s hospitality and culinary arts program and has nearly 50 years of restaurant and educational experience. Robert can be reached online at OffTheMenuGuy@aol.com.

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Off the Menu: The downfall of Red Lobster (2024)

FAQs

Why is lobster being taken off the menu? ›

Some retailers are taking lobster off the menu after an assessment from an influential conservation group that the harvest of the seafood poses too much of a risk to rare whales and should be avoided.

Why is Red Lobster losing money? ›

Inflationary pressures from increased wages, alongside unfavorable leases and underperforming locations, led to financial woes for Red Lobster. But perhaps the most acute financial blow was the impact of its now notorious Ultimate Endless Shrimp promotion last summer.

Did General Mills own Red Lobster? ›

Pioneering chain. Red Lobster started in 1968 by Bill Darden, an architect of the casual dining revolution in America, and General Mills soon bought the restaurant. Red Lobster later became part of Darden Restaurants, the owner of Olive Garden and other chains.

Does Red Lobster lose money on endless shrimp? ›

TUG confirmed a $12.5 million operating loss for Red Lobster in the third quarter of 2023, with the “Ultimate Endless Shrimp” deal identified as a key culprit. TUG itself suffered an awful Q4 in 2024 as a whole, losing some $477 million from all its companies.

Why are they saying not to eat lobster? ›

Conservation groups say that the ropes used to fish for lobsters often entangle critically endangered North Atlantic right whales. But lobstermen say they comply with state and federal rules for fishing.

Who owns Red Lobster in 2024? ›

Red Lobster
Company typeSubsidiary
RevenueUS$2.6 billion (2018)
OwnerGolden Gate Capital (2014–2020)
Number of employees55,000
ParentDarden Restaurants (1995–2014) Thai Union Group (2020–2024)
12 more rows

Are Olive Garden and Red Lobster owned by the same company? ›

Darden SW LLC, a Florida limited liability company, the sole member of which is GMRI, Inc., doing business as Red Lobster and Olive Garden. Florida SE, Inc., a Florida corporation and direct wholly owned subsidiary of GMRI, Inc., doing business as Red Lobster, Olive Garden, Bahama Breeze and Seasons 52.

When not to buy lobster? ›

Lobsters with missing or chewed antennae have spent time in storage. Inspect the claw bands. Another sign you've bought a fresh caught lobster is if the claw bands are free from stains and sea grime. Avoid a lobster with a cracked shell or claw.

Who owns Red Lobster? ›

Is Red Lobster owned by China? ›

Red Lobster is owned by the seafood supplier Thai Union Group Plc which is in talks with lenders for a settlement that would allow creditors control of the business. The chain employs more than 30,000 people and also operates restaurants in China, Hong Kong and Japan.

What caused Red Lobster to go out of business? ›

According to CEO Jonathan Tibus, the company's CEO, negative factors include inflationary pressures, unfavorable lease contracts, poor locations, and strategic missteps in luring customers.

Is Olive Garden owned by General Mills? ›

In 1995, General Mills made a strategic decision to spin off its restaurant businesses, including Olive Garden and Red Lobster, forming Darden Restaurants. The spin-off proved to be a transformative move, allowing Darden Restaurants to focus on its core competencies and further elevate the success of Olive Garden.

What does endless shrimp mean at Red Lobster? ›

When Red Lobster added the endless shrimp deal to its permanent menu over the summer, the restaurant outlined the following terms of the deal: Start by choosing two shrimp options. Order more shrimp over the course of your meal. The meal comes with one side and Cheddar Bay Biscuits.

How much did endless shrimp cost Red Lobster? ›

Last summer, Red Lobster made $20 endless shrimp a permanent menu item. Endless shrimp was a successful annual limited-time offer for Red Lobster for 20 years.

Who is the new CEO of Red Lobster? ›

Red Lobster names Jonathan Tibus CEO, replacing Horace Dawson | Nation's Restaurant News.

Why is Whole Foods boycotting Maine lobster? ›

The bill essentially singles out Whole Foods – owned by Amazon – which suspended purchasing Gulf of Maine lobster due to concerns about North Atlantic right whales getting entangled in lobster ropes. If it becomes law, the Maine employee pension fund would sell back its $64 million in Amazon stock.

Why is lobster not being sold? ›

Then, last week, the Marine Stewardship Council (MSC) suspended its certification of the Gulf of Maine lobster fishery effective December 15, 2022, also citing the protection of right whales, after taking into account a July court ruling which has led to stricter sustainability regulations.

Why are lobsters disappearing? ›

America's lobster fishing business dipped in catch while grappling with challenges including a changing ocean environment and new rules designed to protect rare whales. The lobster industry, based mostly in Maine, has had an unprecedented decade in terms of the volume and value of the lobsters brought to the docks.

Why is Blue Apron banning Maine lobster? ›

Hello Fresh, Blue Apron pull lobster from menus after 'red list' warning about whales. Whales can suffer injuries and fatalities when they become entangled in the gear that connects to lobster traps on the ocean floor.

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