The demise of Red Lobster is a perfect case study in how to kill a business

[philemer]

We ate at our local R.L. Thur. night to use up some old gift cards and the meal was fine. $20 Thursday special of small lobster tail, vegie for me and a baker for my DW and about 15-18 shrimp floating in "butter". Had enough leftover shrimp to bring home for last nights dinner. There must have been 15-20 employees floating around.

Overall, will not be sad to see them go.

 

[DrQ]

Red Lobster officially files for bankruptcy after being rinsed of cash by all you can eat shrimp deals​

• The struggling restaurant chain has shut dozens of restaurants this month
• They filed for bankruptcy late on Sunday with more than 100,000 creditors

Red Lobster officially files for bankruptcy

Red Lobster has filed for Chapter 11 bankruptcy protection days after shuttering dozens of restaurants.

www.dailymail.co.uk

 

[am1]

Maybe they can start a go fund me.

 

[davidvel]

Red Lobster officially files for bankruptcy after being rinsed of cash by all you can eat shrimp deals​

• The struggling restaurant chain has shut dozens of restaurants this month
• They filed for bankruptcy late on Sunday with more than 100,000 creditors

Red Lobster officially files for bankruptcy

Red Lobster has filed for Chapter 11 bankruptcy protection days after shuttering dozens of restaurants.

www.dailymail.co.uk

The news stories continually blame the all you can eat shrimp deal as causing its demise. If this were the case, they would have simply cancelled the promotion. Obviously they needed that loss-leader to keep bodies in the restaurants, so there were other issues going on.

 

[ScoopKona]

The most valuable part of the company -- the land the restaurants sat on -- was sold off. Adding rent to the expenses side of the ledger was enough to kill off that many restaurants.

 

[DrQ]

The news stories continually blame the all you can eat shrimp deal as causing its demise. If this were the case, they would have simply cancelled the promotion. Obviously they needed that loss-leader to keep bodies in the restaurants, so there were other issues going on.

The most valuable part of the company -- the land the restaurants sat on -- was sold off. Adding rent to the expenses side of the ledger was enough to kill off that many restaurants.

Correct. After Darden (Pillsbury) sold off the real estate, the business was a "pig in a poke" for the new buyers.

 

[amycurl]

Welcome to the magical results of private equity!

 

[Brett]

I haven't been to a Red Lobster in years but now it's looking interesting

 

[amycurl]

I would have never uttered Red Lobster and Bar Harbor in the same sentence, but I guess I can sorta see the attempted inspiration there. In my youth, in PA, we mostly ate seafood at a local seafood chain (I think they had 2-3 locations,) but sometime we did do Red Lobster. But it's been at least 17 years--I don't think my daughter has ever been to Red Lobster.

Now, lobster that was hauled that day out of the Gulf of Maine....she's had that HUNDREDS of times.

 

[DrQ]

When in Boston, I ate seafood at Legal Sea Foods

In Ottawa (Nepean) Ontario, I would eat at Lapointe Fish (which at the time was a seafood market that had a few tables available for dinning) which was excellent.

 

[TheTimeTraveler]

Actually today was the day (Monday, May 20th, 2024) that Red Lobster did actually finally file for Bankruptcy. It made the National News this evening.

They have their work cut out for them in order to survive. There goes the 'all you can eat' shrimp!











.

 

[ScoopKona]

There goes the 'all you can eat' shrimp!

I can run to the grocery store and buy a 2 pound bag of mediocre frozen shrimp for $7.

Spend another $0.25 on fat, salt and some herbs, and I can turn that into a dish that will stuff three average people to the gills for less than $2.50 each. Granted, there are competitive eaters (who don't eat like that unless they're trying to win a contest), and the morbidly-obese who can put down considerably more than a pound of food at a sitting.

But thanks to the economy of scale, restaurants pay pennies-on-the-dollar compared to supermarket shoppers. AND there are sales in the restaurant world, same as the supermarket.

"Hey, do you think you can take 2,000 pounds of ground beef off our hands? $2.50 a pound if you do."

"Sure, ship it. I can sell that in a week. "

It works the same way as it does in the supermarkets -- brisket goes on sale after St. Pat's; beef flap goes on sale on May 8th or so; crab goes on sale in January (overage -- super high quality) and September (freezer burnt -- don't buy September Alaskan crab. It's been sitting for months.) Hot dogs are basically free starting July 6.

And there are ALWAYS vast quantities of shrimp that need to get turned around. Trivia question: Who consumes more shrimp? a) the city of Las Vegas? or b) the rest of the United States?

Endless shrimp didn't kill Red Lobster. Losing money selling shrimp is like losing money owning a casino. It takes a special kind of person to accomplish that.

 

[CO skier]

I can still get a bargain on a Live Maine Lobster dinner at Red Lobster for $39.99 (slightly higher at some RL). That is cheaper than I can buy and cook it myself. The Choose 3 Shrimp for $20 is another good value when I am too beat to cook dinner. (I would pay a $5 upcharge for wild caught red shrimp instead of the farm raised.) Double Rewards points on Tuesdays means about 12-14 free Rewards options per year (I like the Chocolate Wave for dessert or the Lobster Dip as my Rewards.)

This is a chapter 11 bankruptcy, not a going out of business bankruptcy, so this thread seems like "much ado about nothing" -- unless, of course, your nearest Red Lobster is one of the locations closing.

​ ​ ​

"Dear Guests, You may be aware that Red Lobster filed for Chapter 11 bankruptcy protection. We’d like to take a moment to explain what this means for our company, and for you, our valued guests. For more than five decades Red Lobster has been a part of your family’s life. We’ve been there for your celebrations, big and small. We may be the place that you first discovered your love of seafood. Or where you met the love of your life on a first date. Birthdays, graduations, anniversaries and yes, weddings. We’ve been here for them all. And Red Lobster is determined to be there for these moments for generations to come. And that’s why we filed for Chapter 11 bankruptcy protection. Bankruptcy is a word that is often misunderstood. Filing for bankruptcy does not mean we are going out of business. In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward. As many of you know, we recently made the tough decision to close a number of our restaurants. The truth is, some of the world’s most beloved brands like Delta and Hertz have used this same process to protect their futures and their customers stood with them and rooted them on. And because of that, they emerged stronger. Together, we have a lot worth rooting for. We’ve made delicious, high-quality seafood accessible for generations. Many of you tried lobster for the first time at our restaurant. We’ve brought you Lobsterfest and Crabfest over the years. And, of course, no meal is complete without Cheddar Bay Biscuits. We are here and ready to continue making memories with you. Join us. Dine with us. Root for us. Together, we can write a new chapter. Red Lobster"

 

[Brett]

As the chain files for bankruptcy, fans have rushed to dine there or try to snag a piece of closing locations​

https://www.wsj.com/business/red-lobster-endless-shrimp-bankruptcy-23d2bdeb

"The news sent nostalgia seekers scurrying to dine at the nautical-themed chain, which is still doing $2 billion in sales a year. Some fans even dreamed of owning Red Lobster history, as dozens of slated-to-close locations hawked tea brewers, beer dispensers and other kitchen equipment. The auctions drew calls from consumers who just wanted a lobster tank for their homes. "

"Despite Red Lobster’s woes, some chains are diving into bottomless deals. Buffalo Wild Wings announced an allyou-can-eat wings and fries deal for $19.99 twice weekly.
“Please don’t bankrupt us,” the chain said in a tweet

 

[MULTIZ321]

Red Lobster lists 99 restaurants
closed in 28 states: See locations
closing in your state

Red Lobster lists 99 restaurants closed in 28 states: See locations closing in your state

Red Lobster's website lists 99 restaurant locations as closed. Here's a full list, including a state-by-state breakdown, of closed locations.

www.usatoday.com

Richard

 

[rickandcindy23]

I can still get a bargain on a Live Maine Lobster dinner at Red Lobster for $39.99 (slightly higher at some RL). That is cheaper than I can buy and cook it myself. The Choose 3 Shrimp for $20 is another good value when I am too beat to cook dinner. (I would pay a $5 upcharge for wild caught red shrimp instead of the farm raised.) Double Rewards points on Tuesdays means about 12-14 free Rewards options per year (I like the Chocolate Wave for dessert or the Lobster Dip as my Rewards.)

This is a chapter 11 bankruptcy, not a going out of business bankruptcy, so this thread seems like "much ado about nothing" -- unless, of course, your nearest Red Lobster is one of the locations closing.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

"Dear Guests, You may be aware that Red Lobster filed for Chapter 11 bankruptcy protection. We’d like to take a moment to explain what this means for our company, and for you, our valued guests. For more than five decades Red Lobster has been a part of your family’s life. We’ve been there for your celebrations, big and small. We may be the place that you first discovered your love of seafood. Or where you met the love of your life on a first date. Birthdays, graduations, anniversaries and yes, weddings. We’ve been here for them all. And Red Lobster is determined to be there for these moments for generations to come. And that’s why we filed for Chapter 11 bankruptcy protection. Bankruptcy is a word that is often misunderstood. Filing for bankruptcy does not mean we are going out of business. In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward. As many of you know, we recently made the tough decision to close a number of our restaurants. The truth is, some of the world’s most beloved brands like Delta and Hertz have used this same process to protect their futures and their customers stood with them and rooted them on. And because of that, they emerged stronger. Together, we have a lot worth rooting for. We’ve made delicious, high-quality seafood accessible for generations. Many of you tried lobster for the first time at our restaurant. We’ve brought you Lobsterfest and Crabfest over the years. And, of course, no meal is complete without Cheddar Bay Biscuits. We are here and ready to continue making memories with you. Join us. Dine with us. Root for us. Together, we can write a new chapter. Red Lobster"

Where in CO do you live, or do you just ski in CO?

 

[DrQ]

Tales From the Trenches of Red Lobster’s Endless Shrimp​

The deal was bad for business. For the employees, it was something else entirely.

Fired Red Lobster Employees Have Quite the Tales About the “Endless Shrimp” Debacle

Tales from the seafood promotion from hell.

slate.com

 

[jp10558]

Tales From the Trenches of Red Lobster’s Endless Shrimp​

The deal was bad for business. For the employees, it was something else entirely.

Fired Red Lobster Employees Have Quite the Tales About the “Endless Shrimp” Debacle

Tales from the seafood promotion from hell.

slate.com

I really agree with the guy who said there's not really anything at Red Lobster worth getting other than the endless shrimp when that was on the menu. It was like, you had to be a different kind of person to want to pay $40 for an entree vs $25 (I never saw it at $20 where I live). And few people I know would eat lobster and not shrimp for instance. That being said, where I was it was sloooww to bring out the food, and slooww to bring out the refills. I figured it was to keep you to maybe 5 refills just because of time fully filling you up. Remember most competitive eaters tend to do it all in one go with a time LIMIT, not a set of waits. I sometimes felt bad about pushing to do 5 or 6 refills - man, the people who could do 16 both had 5 hours to waste and one hell of a big stomach.

TBH, the locations I've gone to aren't closing, but they were never packed, so they didn't have any incentive to move you along either. It's also the case that as far as I was able to tell, with the long time between waitstaff visits, I don't think they were actually at capacity, but there were some limits to seating not based on how busy the waiters were or empty tables. It really had to either be some bizarre corporate policy or not enough cook staff (assuming they designed the kitchen to (with proper staff) serve the full restaurant. So yea, having less turn over hurts the wait staff for sure.

That all being said - there are whole all you can eat places that stay in business, and some like the Brazillian Steakhouses, even bring you the food. So it could be done, but I get the feeling instead of bulk cooking the shrimp, they were doing each order as an individual portion, which to my mind obviously doesn't work well.

 

[Talent312]

Our local Reg Lobster is one that closed
A few days later in the mail. we were offered a meal there for attending a "seminar" from a Timeshare PCC. I think their attendees will be disappointed, but we won't join them.

 

[DrQ]

Death of American staple as CEO tanks her own company's stock by announcing they're 'not as relevant' anymore​

• A traditional American food chain saw shares fall by nearly 20 percent
• The business has been continuously falling in popularity over the past decade

Death of American staple as CEO tanks her own company's stock

An iconic American eatery's stock has plummeted in recent week after the company's CEO said the restaurant is no longer 'relevant'.

www.dailymail.co.uk

Cracker Barrel has lost a significant 16 percent of diners over the past four years - and the trend is ongoing

 

[clifffaith]

Death of American staple as CEO tanks her own company's stock by announcing they're 'not as relevant' anymore​

• A traditional American food chain saw shares fall by nearly 20 percent
• The business has been continuously falling in popularity over the past decade

Death of American staple as CEO tanks her own company's stock

An iconic American eatery's stock has plummeted in recent week after the company's CEO said the restaurant is no longer 'relevant'.

www.dailymail.co.uk

Cracker Barrel has lost a significant 16 percent of diners over the past four years - and the trend is ongoing

Love me some Cracker Barrel! Don’t have them in our area so always enjoy stopping on vacation. Lemonade, chicken and biscuits, and often a new blouse from their cute shop area too!

 

[rickandcindy23]

I love Cracker Barrel. The chicken fried chicken dinner with sawmill gravy and mashed potatoes and green beans is my favorite there. Rick loves the meatloaf. Only one restaurant in the Denver area and one in Colorado Springs, so it's a road trip favorite.

 

[Talent312]

We'll be dining at Cracker Barrel tonight.
They're relevant to us.
.

 

[free2travel]

I can only imagine what is in the Red Lobster and Lied To About EVs threads. Somebody needs to set an AI loose to write a 2 paragraph summary of those threads.

 

[jp10558]

Death of American staple as CEO tanks her own company's stock by announcing they're 'not as relevant' anymore​

• A traditional American food chain saw shares fall by nearly 20 percent
• The business has been continuously falling in popularity over the past decade

Death of American staple as CEO tanks her own company's stock

An iconic American eatery's stock has plummeted in recent week after the company's CEO said the restaurant is no longer 'relevant'.

www.dailymail.co.uk

Cracker Barrel has lost a significant 16 percent of diners over the past four years - and the trend is ongoing

I'm kind of surprised, around here it's one of the sit down places you could go for "cheap" still. I was at one in Rochester NY and they had ads for like 20 dinners for under $13 each. It's kind of good if you know what to expect but I guess not fancy.