Red Lobster’s new CEO, Damola Adamolekun, admitted that the endless supply of $20 shrimp — which contributed to the restaurant filing for bankruptcy — stressed staff and created “a lot of chaos.”
Adamolekun, 35, was set to take over the struggling company in August after the Orlando-based chain suddenly closed 100 locations and filed for Chapter 11 protection.
The 35-year-old CEO is set to lead Red Lobster after the company filed for Chapter 11 protection. PF Changs Red Lobster’s new CEO admitted the endless supply of $20 shrimp caused “a lot of chaos.” AP
The “endless shrimp” promotion was first launched in 2004 and originally lasted only one week, but a sea of chaos occurred after the company made it a permanent menu item in May 2023. Leaders underestimated how popular it would be and the company lost an estimated 20 million dollars that year.
“You’re stressing the kitchen. You’re stressing the servers. You’re stressing the host,” Adamolekun told CNN. “People can’t get a table. It creates a lot of chaos on a practical level.”
The Orlando-based company filed for bankruptcy protection in May 2024.
Jonathan Tebus, then CEO, blamed the former CEO, Paul Kenney, for making the endless promotion of shrimp permanent to customers “despite significant opposition from other members of the company’s management team,” according to the bankruptcy filing.
The chain suffered a significant shortage of shrimp and caused problems in the company’s “normal supply chain and demand planning processes,” the filing added.
The endless shrimp deal was more popular than the leaders expected. He is. TikTok/@hayestack
In August, a US bankruptcy judge approved the company’s reorganization plan so it can emerge from Chapter 11 bankruptcy protection and be sold to a lending group led by asset management firm Fortress.
Red Lobster had 650 locations before its endless shrimp promotion caused its largest shareholder, Thai Union, to take a $530 million write-down in the fourth quarter of 2023. During the bankruptcy process, more than 50 locations were auctioning off equipment as part of the liquidation .
Despite huge financial issues, Red Lobster still maintains its three-story location in Times Square that costs $2.2 million a year to rent.
Now, there are still only 545 locations in the United States.
The company closed nearly 100 locations due to losses. AP
Adamolekun, former CEO of PF Chang, is hoping for a smooth move forward with a long-term investment plan that includes a commitment of more than $60 million in new financing.
“Red Lobster has a tremendous future, and I can’t wait to get started on our plan with the company’s 30,000-plus team members across the U.S. and Canada,” Adamolekun said in September.
Red Lobster has had five CEOs since 2021, and over its 56-year history, there have been multiple ownership changes including its sale to General Mills, Darden Restaurants and a private equity firm in 2014.
Adamolekun said the endless shrimp may return to the menu later only if it doesn’t cause the same problems.
“I don’t want to say never, never, but certainly not the way it was done,” he said. “We wouldn’t get it in a way that would lose money that way and be unmanageable.”
