Why Red Lobster Filed for Bankruptcy: It Wasn’t the Endless Shrimp | Eater

"Founded in 1968, this national casual-dining seafood chain filed for Chapter 11 after weeks of closures and asset sales, including auctions of fryers and ovens. While many blamed a 2023 “endless shrimp” promotion — a $19.99 all-you-can-eat shrimp scampi deal that increased foot traffic by 4% but generated an $11 million quarterly loss — the decline runs much deeper: a 2014 sale to private equity led to the divestiture of real-estate and costly leases, subsequent ownership changes saddled the company with debt, aggressive cost-cutting and a lack of innovation, and leadership instability (five CEOs since 2021) left it ill-equipped to compete with rising fast-casual rivals and rising material, labor and interest costs. The combination of long-term financial engineering, underinvestment and operational pressures — rather than a single promotional gimmick — precipitated mass closures and layoffs, eroding the gap between diners’ fond memories (endless shrimp binges and Cheddar Bay biscuits) and the owners’ focus on stemming losses." - Amy McCarthy