Red Lobster has had a questionable few months. In May, the seafood chain filed for bankruptcy after closing more than 50 locations amid huge losses from an Endless Shrimp promotion that caused chaos.
But in August, Red Lobster welcomed a new CEO: Damola Adamolekun, the 35-year-old former CEO of PF Chang. Adamolekun is on a mission to revive the struggling 56-year-old restaurant chain after it was rocked by the crustacean chaos of the past two years.
“This is, without exaggeration, one of the most important companies in American history,” Adamolekun told CNN. “There have definitely been big mistakes made over the last few years.”
One major mistake Adamolekun pointed out: Red Lobster’s endless promotion of shrimp. Adamolekun said it was very popular with guests, but was very costly for the restaurant chain — which had millions in operating losses — and put undue pressure on servers and kitchen staff.
Shrimp is “too expensive a product to give up indefinitely,” he said in an interview with CNN. “When you have countless shrimp, and people come in and sit at the table and eat for hours as many shrimp as they can, you stress the kitchen. You stress the servers. You stress the host. People can’t get a table. It creates a lot of chaos.” “
The Ultimate Endless Shrimp deal launched in June 2023, and guests can choose from two unlimited shrimp dishes for $20. The deal, which stalled in late 2023, also included the chain’s popular Cheddar Bay biscuits. It was previously a limited-time deal, but the restaurant’s attempt to make it a permanent menu option ultimately led to the company’s downfall. It resulted in an $11 million loss, and the restructuring team blamed it as a direct shareholder in its May bankruptcy filing.
“We wanted to boost our traffic, but it didn’t work,” Ludovic Régis-Henri Garnier, CFO of Thai Union Group, told investors. “We need to be more careful about the entry points and price point we offer for this promotion.” Thai Union Group is the investor in Thailand-based Red Lobster. It expects to fully dispose of its investments by the end of the year.
However, Thiravong Chansiri, CEO of Thai Union Group, pointed to other factors besieging the seafood chain.
“The combination of the COVID-19 pandemic, ongoing industry headwinds, rising interest rates, and higher material and labor costs have impacted Red Lobster, resulting in negative long-term financial contributions to Thai Union,” Chansiri said in a statement in January. and its shareholders.”
Red Lobster CEO’s vision
While dozens of Red Lobster locations will close in 2023, Adamolekun told CNN his plan is to grow the company, but not necessarily by opening or reopening locations.
“We intend to finish closing restaurants,” he told CNN. “We intend to grow from here in terms of the business. There will be investments in product that will take time. Investing in infrastructure takes time. Investing in technology takes time.”
There are currently 545 Red Lobster locations, and Adamolekun said the company intends to improve each one by fixing broken HVAC systems and torn carpets and chairs.
“It will take some time, but the impact should be felt immediately,” he added. Adamolekun also said the company plans to trim its menu “in a very smart way” because the offerings have been so plentiful.
Adamolekun began his restaurant vision by secretly visiting restaurants across the country before taking the company’s top job and snacking on crab legs and lobster tails. He did this as a way to connect with and understand the brand and its customers.
Customers “just want quality food in a comfortable environment and a connection to the history of the brand,” he told the Wall Street Journal. “This is the first step.”
