Red Lobster Considering Bankruptcy Filing

[SamSpade]

They sure have spun that the "all you care to eat shrimp" meal is the problem behind all of this. From today, I got a PUSH NOTIFICATION from the Los Angeles Times with this headline.
Red Lobster offered customers all-you-can-eat shrimp. That was a mistake
If that's behind paywall for some reason, let me know and I'll go to the Archive link.

[ClownLoach]

I don't see Red Lobster surviving too much longer, seafood restaurant chains have just really have been on the decline for good while now. The all you can eat is what did Red Lobster in and the best they can do is try to sell off the real estate.

They lost $11 million on the promotion. If a chain the size of Red Lobster can be doomed by a mere $11M loss that means they had far more serious financial issues. I expect just the auction returns alone for the current round of closed stores will deliver more than $11M since they're selling everything out to the bare walls.

They're probably paying at least a hundred million a quarter to their private equity "sponsors." Obviously those "sponsors" have not provided the appropriate direction or leadership for the chain to turn the results around. That is what has caused these closures.

There is no problem with the seafood restaurant business other than the inevitable diversification of the industry. Middle range, low quality American style seafood like Red Lobster serves is being squeezed out by higher end steakhouses and local chains, inexpensive fast casual chains, and various ethnic concepts predominantly in the Asian and Mexican food genres. Seafood is very popular. Red Lobster is not, and that is because of problems with pricing, quality, service, and value.