**Red Lobster to Close 48 Restaurants Amid Financial Struggles**
Red Lobster is set to close at least 48 of its restaurants nationwide, as revealed by TAGeX Brands, a notable restaurant liquidator. An online auction of Red Lobster's inventory, including kitchen equipment, furniture, tables, and chairs, will be managed by TAGeX Brands. The auction will take place from Monday to Thursday, according to TAGeX Brands founder Neal Sherman. Reports indicate that Red Lobster locations in Buffalo, Orlando, Jacksonville, and several other cities are marked as "temporarily closed" on the company's website.
With approximately 650 locations, Red Lobster did not respond to CNN's requests for comments. Speculations suggest that the company is contemplating filing for bankruptcy protection and has appointed a restructuring expert as its new chief executive, indicating a potential bankruptcy. This widespread closure is a rare occurrence in the chain's more than 50-year history.
Originally a trailblazer in casual dining, Red Lobster introduced affordable seafood to middle-class diners. However, the chain has seen a decline in recent years due to various issues, including corporate mismanagement, as noted by former executives and restaurant analysts. In 2020, Thai Union, a long-time supplier, acquired a significant financial interest in Red Lobster, becoming a major shareholder.
Under the leadership of Thai Union, Red Lobster has seen the turnover of four CEOs and introduced an all-you-can-eat shrimp promotion last year, which reportedly slowed table service and affected Thai Union's profitability. Although this promotion had been a tradition for over 18 years, making it a permanent menu item raised concerns. "We need to be much more careful," remarked Thai Union CEO Thiraphong Chansiri in November regarding the shrimp deal. Earlier this year, Thai Union announced plans to divest from Red Lobster, taking a $530 million loss on its investment. "I’m going to stop eating lobster," Chansiri commented.
The rapid growth of fast-casual chains like Chipotle and quick-service chains like Chick-fil-A over the past two decades has further pressured Red Lobster and the casual dining sector. According to Technomic, a restaurant research firm, the share of casual dining in the total restaurant industry sales has dropped from 36% in 2013 to 31% in 2023.