Why Red Lobster is filing for bankruptcy

Red Lobster, America's largest seafood restaurant chain, is in a serious financial pinch and filing for bankruptcy protection. Nikki Battiste reports on why the once popular chain has struggled to reel in customers.
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[@stevelogan3714]

Losing $11 million on shrimp is not why Red Lobster is going out of business

[@boristheamerican2938]

Sounds like one of the CEOs brother in law was selling expensive shrimp.

[@Jake-pf4kv]

You don't think it was because of having good intentions?😂

[@Snugglepaws_OwO]

So what then?

[@nonameronin1]

​@@Snugglepaws_OwOPretty sure he's gonna say because they are paying regular employees too much. It's always the greedy employees fault never the higher ups making bad calls 🙄

[@user_01986]

@@Snugglepaws_OwO Red Lobster is flirting with bankruptcy because they were bought out by vulture “private equity”. They leveraged the company to buy it out, basically dropping it into a ton of debt. Then they start liquidating assets and cutting corners in order to pay the investors money at the cost of the company itself. Then they’ll blame rising costs and wages and declare bankruptcy.

[@MemoirsofaBasketcase]

Private equity robber barons the same as Toys R Us.

[@jaydee975]

That is a definite truth!

[@entezami777]

They will never report that

[@NazriB]

Lies again? Red Mart USD SGD

[@DavidHo-nq7np]

​@@NazriB ya mam

[@jorgeecheverri6805]

so, jews lmao

[@kevink3688]

This news report was brought to you by private equity.

[@entezami777]

Exactly

[@aaronsellers2396]

People Are Learning Red Lobster Didn’t Go Bankrupt Because Of Endless Shrimp, They Were Attacked By Wall Street For Their Land Here’s the full story “The only reason Red Lobster's going into bankruptcy is because a hedge fund wanted them to go into bankruptcy.” “The media will never stop covering for hedge funds while making it seem like every problem is the fault of the American people. Like, I'd be willing to bet you think Red Lobster went into bankruptcy because of endless shrimp. You know, the endless shrimp promotion they had. Because that's what the media's told you. They've been telling you repeatedly that the reason Red Lobster went into bankruptcy was that they had the endless shrimp combo and the greedy American people just took advantage of it. That's not what happened. No, what happened was a hedge fund bought Red Lobster and as a condition of the sale, they made therm split up their land and their restaurants. Because up until that point, Red Lobster actually owned all of the land that their restaurants were located on. And then once they made them split that up, the hedge funds made the leases on that land so expensive that the Red Lobsters couldn't possibly continue to operate. So Red Lobster had to keep trying new and new things to try to make enough money to pay these leases. And it was never enough to be able to afford what the hedge fund wanted to charge them. So now they're going into bankruptcy. But the media is not talking about that and the American people were the problem. That Red Lobster made terrible marketing decisions and the American people took advantage of it. But make no mistake, the only reason Red Lobster's going into bankruptcy is because a hedge fund wanted them to go into bankruptcy.

[@online3010]

Private Equity are very bad managers of companies

[@jaydee975]

It seems that when a company is bought by a private equity firm that signals the beginning of the end of that particular company.

[@kennethlane4554]

Private equity scams should be illegal and once were. Thank our Republican looters of souls for that!

[@papagen00]

I ate 88 grilled shrimp at Red Lobster last week. RIP

[@quitabe9240]

Lmfao 🤣🤣🤣

[@travilpowell4086]

may you rest in lobster.

[@leechangthao3476]

😂

[@courtneybrown5296]

😂😂😂

[@user-vx7vi3vq1c]

Those were not shrimp.

[@f_pie]

Thank you Private Equity, I appreciate y'all adding red lobster to your casualty count

[@JRS-iq9pz]

Private equity group "Golden Gate Capital" owns Red Lobster now.

[@theallnightr]

I foresee a lot of “Spirit Halloweens” smelling like cheddar bay biscuits this October.

[@celestinorodriguez1155]

Don't be fool, they will avoid taxes and come back later.

[@qwentingreer6793]

I hope you're right

[@TravisDoesKayakFishing]

"We needed this win" ~Long John Silvers.

[@boataxe4605]

They are closing restaurants left and right too.

[@TravisDoesKayakFishing]

@@boataxe4605 They closed your sense of fun a long time ago it seems my dude.

[@josephmedina6403]

Seriously go for some fish and chicken planks rn !🍴

[@boataxe4605]

Food wise my sense of fun is lobster tails at Shaws crab house in Chicago.

[@joshuapaul349]

To be a fly on the wall of some of these board meetings.

[@emilioaguirre1634]

Private equity businesses will always blame you the customer and their own employees as the reason why they're going bankrupt instead of taking responsibility.

[@lesliemoore1656]

A great example of this......Winn Dixie, thrived for 60 years as on of most popular grocery chains in the South, now bought out by Aldi after a 3rd bankruptcy.

[@emilioaguirre1634]

@@lesliemoore1656 the 99¢ stores and others like it also went out business recently.

[@lesliemoore1656]

@@emilioaguirre1634 I hope most of these chains, sit down and fast food go out of business, they have been around long enough and their greedy corporate ladder goes down with them.

[@emilioaguirre1634]

@@lesliemoore1656 If those businesses no longer exists a lot of people will be unemployed and sooner or later they would be homeless too.

[@lesliemoore1656]

@@emilioaguirre1634 Anyone working in some of these fast food places need to start looking, this is not going to end well. Thousands of jobs in the trades now waiting to be filled.

[@WaitingtoHit]

Wow, Norah wore red especially for this Red Lobster story. She's s true bargain-seafood fanatic!

[@benderbot248]

private equity

[@MyFavoriteColorIsBLUE]

To expensive for me!

[@1ifbyland2ifbysea]

Exactly. It's cheap seafood anyways. Just make it yourself and buy supplies fresh and it will be 10xxxx better.

[@itslikethesamebutdifferent8020]

Guys- drop the shrimp deal and lower your prices just a bit and you’ll see people coming back into your restaurant.

[@malin7919]

Impossible with Biden's inflation. The restaurants have to deal with high wages and food inflation which are real.

[@Tortilla.Reform]

The shrimp deal isn’t why they’re going bankrupt at all, it’s because a private equity firm bought the company and stripped it for parts, saddled it with debt, etc

[@mosalim2166]

No Because north America in rescission now thanks to dump politicians People have no money to spend on going out

[@DerekDavis213]

Red Lobster is very popular with African-American people, when its date night.

[@rickwilliams967]

Dude, that crap is barely edible as it is. Let it go, their food is terrible.

[@brianmc7292]

They won’t say the real reason we all know

[@twohandsandaradio]

The ones that know...know. That's all that matters.

[@user-vx7vi3vq1c]

@@twohandsandaradioLet me guess, you’re one of the insiders who has it figured out.

[@tigercry5177]

Red Lobster was struggling in 2013 before darden sold red lobster.

[@Anthony-dj4nd]

They got eaten out of house and home

[@Greenliight]

Sounds like a wild night

[@Sunset4Semaphores]

*That man ate all our shrimp, and three plastic lobsters!*

[@entezami777]

Simpsons?

[@connor_flanigan]

'tis no man - 'tis a remorseless eating machine!

[@ishikawagoemon4397]

​@@connor_flanigan 6 bells, time for closing

[@boataxe4605]

“I’ve never seen a more blatant case of false advertising since the movie The Never Ending Story!” Lionel Hutz.

[@boataxe4605]

@@entezami777Yes,back when they were still good.

[@damnjustassignmeone]

The shrimp deal? They say they lost $11 million on that, but it only adds up to $20k per restaurant. Not helpful, but it’s hardly a reason to go bankrupt.

[@Tortilla.Reform]

They’re actually going bankrupt because a private equity firm bought RL and stripped it for parts

[@user-er3ri6sc3j]

The lobster 🦞 went on strike.

[@MrJuvefrank]

Wow! 20,000 bucks a restaurant. I never met anyone who liked losing 20,000 bucks let alone that much money per restaurant. If I were them, I'd want to get out of that while the getting is good.

[@VulcanLogic]

@@MrJuvefrank The average red lobster grossed over $4 million in 2023. A $20,000 annualized loss is $384 a week. That's not causing a bankruptcy, sorry.

[@richardmolina5274]

Who in the hell can afford red lobster .i work 40hrs a week i sure in the hell can't

[@ncasti]

People can barely afford basic living expenses nowadays, much less eating out. Red Lobster served decent-tasting food at a fair price. Sad to hear.

[@backatitagain20]

Don’t worry they’ll be back open again once Trump is back in office. Operation fix America

[@aaronsellers2396]

People Are Learning Red Lobster Didn’t Go Bankrupt Because Of Endless Shrimp, They Were Attacked By Wall Street For Their Land Here’s the full story “The only reason Red Lobster's going into bankruptcy is because a hedge fund wanted them to go into bankruptcy.” “The media will never stop covering for hedge funds while making it seem like every problem is the fault of the American people. Like, I'd be willing to bet you think Red Lobster went into bankruptcy because of endless shrimp. You know, the endless shrimp promotion they had. Because that's what the media's told you. They've been telling you repeatedly that the reason Red Lobster went into bankruptcy was that they had the endless shrimp combo and the greedy American people just took advantage of it. That's not what happened. No, what happened was a hedge fund bought Red Lobster and as a condition of the sale, they made therm split up their land and their restaurants. Because up until that point, Red Lobster actually owned all of the land that their restaurants were located on. And then once they made them split that up, the hedge funds made the leases on that land so expensive that the Red Lobsters couldn't possibly continue to operate. So Red Lobster had to keep trying new and new things to try to make enough money to pay these leases. And it was never enough to be able to afford what the hedge fund wanted to charge them. So now they're going into bankruptcy. But the media is not talking about that and the American people were the problem. That Red Lobster made terrible marketing decisions and the American people took advantage of it. But make no mistake, the only reason Red Lobster's going into bankruptcy is because a hedge fund wanted them to go into bankruptcy.

[@DerekDavis213]

I went to Red Lobster, and ordered a lobster. They threw away the *tomalley* ! The green parts inside a lobster is called tomalley. Many people consider it a delicacy.

[@thewoodmoose]

Good. Its an evil corporation.

[@MrJuvefrank]

No, that's not good. This means a bigger socioeconomic depression.

[@MattyIcecubes]

There's not a single one of them that isn't.

[@martinnguyen2458]

I wish I tried the food at Red Lobster. Man, that sucks that the restaurant chain is going bankrupt.

[@Tortilla.Reform]

…..You can still go hahaha

[@larryhopper1502]

I think one reason they are struggling (at least for our local restaurant in Tupelo MS) is the placement of the building entrance. In Tupelo, the entrance is located on the back side of the building away from the main road and therefore it appears to almost always be closed or at least very dead and not busy. That can make customers question the quality of service/food.

[@Anne.411]

Welp when people started doing Mukbangs with them ex-large crab legs it made Red Lobster look bad

[@backatitagain20]

No

[@itzlegion123]

Not only that they customer service went down hill and the food quality and price went up. Why would anyone want to go there.

[@williamhenry9705]

Customers eat like field hands, hang a jacket on a chair, leave, come back and eat like field hands.

[@tobecontunedusa7527]

The food has lost its luster. The restaurant industry is having a hard time keeping up with inflation.

[@twohandsandaradio]

Keeping up with minimum wage more like it.

[@richarddragonetti2308]

They were good back in the 80s. When they went into the 90s and so on, it really got expensive and the quality was going down. A lobster was as small as a large shrimp. I didn't know companies can harvest shorts. Haven't been there in years because the Mrs never liked the food

[@lesliemoore1656]

Anyone planning to get the $5 deal at McDs take a pic of it and post publicly with the receipt. Do this with any chain everyone needs to see what they served for the price they charged. Truth is, these chains need us but we dont need them.

[@ChiRusNkFUSA]

Social Media really destroyed restaurants with all these eating challenges.

[@DavidHo-nq7np]

No

[@backatitagain20]

Absolutely not what a dumb statement

[@Tortilla.Reform]

You know the shrimp deal has nothing to do with this right? They’re going bankrupt because a private equity firm bought red lobster and stripped it for parts

[@twohandsandaradio]

People's credit cards are about maxed out. $70 before tip for 2 people isn't sustainable business practice. Subway will be next.

[@DerekDavis213]

Two people can eat at subway for 25 bucks. Not so bad.

[@2KVS]

Quality and service has fallen, prices have risen. Not worth it anymore honestly.

[@cherylwirz2722]

Red lobster: going bankrupt over endless shrimp... Olive Garden: laughs in endless pasta. 🤣🤣🤣🤣

[@CalvinMorris-cf8jk]

I have not ate lobster in so long I forgot what it taste like I have been eating cold beans and some flat tortilla things for the past 3 years. my body would go in shock if I ate some lobster.i can not even afford that fake crab stuff.

[@DerekDavis213]

Lobster used to be for prison convicts. It was a low-value food. Undesirable even.

[@naveedrehman2987]

You know things are BAD when RED LOBSTER is going out of business:(

[@elessartelcontar9415]

I enjoy RL and hope they stay in business. They are too expensive but the one by me is always packed with 45 minutes to an hour wait times. One would think that with an average for a couple without alcoholic drinks being $100 - $140 and a family of four $200+ and people lined up to hand it over that it would be a guaranteed winner! Part of it could be mismanagement and bad judgment on things like their all you can eat shrimp where the customers treated it like a challenge and ate a lot more than RL estimated. The problem is now there is a large percent of people who don't have a disposable income that would allow them to eat there. Their portion sizes have gotten smaller, their prices have gotten higher and their quality has gotten worse probably due to going with suppliers whose quality is not as good but is cheaper than the old provisioning companies. I think Starkist finally accepted Charlie! 🐟

[@Tortilla.Reform]

The shrimp deal has nothing to do with the bankruptcy. This is happening because a private equity firm bought the restaurant chain and stripped it for parts, saddled it with debt

[@FirstyPaul]

They underestimated how gluttonous people can be

[@boataxe4605]

Simple,the quality of their food went way down.

[@CarcassMoonwipe]

interesting how they failed to report on the actual reason.

[@johnbender2806]

I have repaired equipment in several Red Lobster locations including the Time Square location and they all seem miss managed and tend to keep a filthy kitchen with roaches. Wouldnt mind if they closed down.

[@backatitagain20]

The food not good if the restaurant don’t have roaches in there

[@Belovedselah]

@@backatitagain20what 😂

[@xCH0SEN1x]

I just ate endless shrimp today 😂😂😂

[@philiphatfield5666]

The place is simply too pricey to attract customers to eat their just average seafood. I haven't eaten there in twenty years and have no desire to.

[@epiphanyofCorrectness]

Only 3 in my state and the one here in my hometown is the only one that will stay open.

[@jimjones9949]

Nice work Paul Kenny!

[@marleyplumb4562]

Lobster are just getting smarter.

[@davidw4781]

I'm sure there's more to Endless Shrimp that's contributing to Red Lobster's bankruptcy.

[@blackguy1811]

This is not about McDonald's, it's about RED LOBSTER; wtf are you going off topic?

[@micheal6901]

Excutives/producers. Please put Tony Sadiku in that time slot. The ratings will raise

[@DakotaFord592]

Disgusting private equity, as usual.

[@silverfoxx4012]

maybe it has something to do with them serving bad lobster, which is their namesake, this is from personal experience, i had my first ever lobster at red lobster and it tasted soooo bad that i didnt try lobster again for almost 5 years cause i thought it tasted bad but it just turned out they served me rotten lobster.

[@RabbitWatchShop]

Charging that much for sea roaches. Not sure why it ever found success

[@user-wj6dt5bq3w]

My doctor found out I'm allergic to seafood and roaches. There must be a connection.

[@backatitagain20]

Delicious 😋

[@Tortilla.Reform]

You’re so delicate and fragile hahaha, Lobsters taste great

[@aasstock8465]

Cook your own shrimp, save some money.

[@lastpme]

If they were losing money on that deal, they should had stopped it.

[@davidw4781]

That's what I'm asking. Why didn't they discontinue it?

[@hankrhill324]

Yeah… cause giving away stuff super cheap is the best way to make money.

[@dannybeun948]

Sad😢

[@harlock75]

Jill where have you been???

[@softfantasynightchan]

Fr nooo

[@paulwall2891]

Everything comes to a end

[@DrayDray78]

My sister and I took mom on a late Mother’s Day dinner to Texas road house their first visit because we rarely eat out! Two meals we shared with no alcoholic beverages and only two ice teas since mom is not a big eater cost us $100 including tax and 10% tip! I love red lobster 🦞 but I know for a fact our dinner experience for three would have been closer to two hundred! That’s our monthly cell phone bill for four!

[@daryoushsameyah8329]

Minimum wage vs. Poor economy where customers can't pay to eat out? Maybe? Just a guess?

[@lesliemoore1656]

Your guess is exactly the reason. Happened in the 70s followed by a very bad recession, businesses closed overnight.

[@MrJuvefrank]

@@lesliemoore1656 I'm glad you know Moore about that than so many other commenters; they think corporations failing is a good thing.

[@lesliemoore1656]

​@@MrJuvefrank Corporations in which profit margins have driven them to a history of unethical practices, and this includes the numerous chain fast food and casual dining establishments along with the tobacco industry, eventual failure is a given. The only thing that has kept them out of prison are their generous contributions to campaigns.

[@MrJuvefrank]

@@lesliemoore1656 That's right. Years ago, the Red Lobster served customers hermit crab when the customers ordered lobster bisque.

[@kennethlane4554]

Your guess oddly serves your Rightwing masters well. Does this pay well for you?

[@eddiejohnhurst1]

They dumping debt!!! Sale to best friend and keep the machine rolling!!!

[@entezami777]

Exactly

[@keeperzero]

I had 19 biscuits the last time I was there in 1986

[@matthewporrini50]

I've never eaten at a Red Lobster P.S. Red Lobster is owned by General Mills

[@AlgoNudger]

I'd prefer Joe's Crab. 😅

[@kimberlyhock3318]

They were better than Papadeaux's when it came to price and serving size.

[@DankUraniumYT]

Can someone explain to me why is red lobster is filing for bankruptcy explain it to me like I'm 12

[@MrJuvefrank]

It's just like when you borrow money, you go into debt if you have an emergency like you got no allowance because your dad got mad at you. The Red Lobster has most of its restaurants in California and a new law in California required the Red Lobster to pay its workers more money, but their idea of selling shrimp cheap made it impossible to pay the people who built their restaurants, their employees, etc. If you don't get enough money from customers, you can't pay employees, pay the electric bill, pay the land lord. Bankruptcy keeps the judge from taking everything you have to pay what you owe.

[@marcusblum7462]

You can blame George Costanza for eating shrimp on TV.

[@rickwilliams967]

About time. Stick with the biscuits guys, everything else sucks.

[@thewonthatloss227]

But y'all around here worried about skimp portions at chipotle but still giving them all your money 😂😂 Meanwhile:

[@Sue-zf5uu]

Hard to fake shrimp. Not so with chicken, pork and beef. No plant grown shrimp lol

[@drewcool8441]

Bruh i was just about to go there

[@scottmarquardt3575]

Bad service in Duluth,mn

[@davidellis5141]

I like the song Rock 🪨 Lobster 🦞 by The B-52's 🎸

[@kellyson7909]

I declare BANKRUPTCY

[@user-vx7vi3vq1c]

Oscar : Hey. I just wanted you to know that you can't just say the word "bankruptcy" and expect anything to happen. Michael Scott : I didn't say it. I declared it.

[@junaidisalam5718]

don't worry... just go to China and set up business there... look at how profitable business in China for McDonalds, Starbucks and KFC

[@42luke93]

I went a few months ago

[@JUSTACOWBOY1783]

I'm sure that an average 80% inflation increase has something to do with this chains demise as well. Most of the general population of the United States can barely afford groceries let alone an outing like Red Lobster.

[@JUSTACOWBOY1783]

@jimjones9949 dude I make more than plenty of money. I'm simply stating facts. Don't be a cowardly keyboard warrior.

[@JUSTACOWBOY1783]

@jimjones9949 who said I was complaining, dude. You need to educate yourself on the difference between complaints and spreading information.

[@traybern]

WHEN is Jill going to get over that childhood lisp????

[@vickiharer3644]

Went there a couple of times for their happy hour thing of the past i guess unfortunately 😢 got or had a pair of their red beads with the lobster dangle fun times

[@anthonyxavier6300]

4 CEO in the last 5 years!

[@renegarcia-hayes4209]

Who wants to eat frozen seafood.

[@demiller74]

I hate shrimp after eating 5 plates of shrimp tonight. Yuck.

[@fillup40]

No loss.

[@Pr0toPoTaT0]

Tldr, endless shrimp was stupid.

[@lesliemoore1656]

We can only hope its most of these chains, sit down or fast food wind up like RL. There are too many, some have been around too long and all are overpriced and poor quality. Grill out and have wine and dinner on your deck or patio. Great food and drinks, great price, with atmosphere. Dining out these days is way overrated.

[@twohandsandaradio]

Drink water instead of alcohol and be a bit healthier. f'n alki

[@MATTLUCAS-zz6we]

Damn Save Red Lobster ,

[@1848432]

At least it’s not my chilis 🎉

[@ekop1778]

WORKED IN THE RESTAURANT BUSINESS BACK IN 90S LOUSY WAY TO MAKE A LIVING TOO MANY RESTAURANTS

[@christopherdean2893]

follow the money

[@Eryn321]

*Tear Tear* go to long johns you'd eat for cheap. wtf

[@benjaminharris7091]

“Red Lobster in a pinch” & “failed to reel in customers” - why do news agencies and journalists who want us to trust what they say continue to make corny, dad jokes when explaining the latest current events? I doubt anyone under ten years old finds this witty. Why not just tell the news straight?

[@Renitajune]

KFC has a $5 meal

[@georgemaximus694]

Wait until these technology companies realize they’re not going to make money on these AI and they are spending billions of dollars on…. I don’t what is thought process when people can’t even afford to eat out and spend money on a good meal on rather spend it on AI?

[@Wizardof]

Can their owners buy the Trump Org? It's a treasure trove.

[@DavidBrannon-rp2nq]

It’s because Dardin bought it and started selling prepackaged meals that suck Dardins business philosophy cut quality and cut quantity and raise the price