Red Lobster, a well-known seafood chain, has closed at least 8 of its locations in the Eastern U.S., representing a small portion of its 670 domestic units. These closures reflect broader challenges, including declining restaurant counts in recent years despite stable overall sales, with the parent company citing high food and labor costs as major issues. Thai Union Group, Red Lobster's parent company, plans to revitalize the chain's menu and operations to address inconsistencies, with a new CEO search underway.
In recent months, Red Lobster, a popular seafood chain, has made headlines with the closure of at least 8 of its locations across the United States, primarily in the Eastern part of the country. These closures, although representing just over 1% of the chain's approximately 670 domestic units, mark a significant shift for the brand, especially considering some of the shuttered restaurants had been serving their communities for decades.
This trend of closures reflects a broader challenge for Red Lobster, as the chain has seen a decline in its U.S. restaurant count, shrinking by 5 units in 2021 and 4 units in 2020. Despite this, the chain's overall sales have remained relatively stable over the past five years, aside from a dip in 2020.
Red Lobster's parent company, Thai Union Group, has openly acknowledged the difficulties the chain is facing, citing high food and labor costs as primary concerns. In Q3 of 2022, the company reported losses of $15.3 million, surpassing initial forecasts.
In response to these challenges, Thai Union Group has outlined plans to revitalize Red Lobster's menu and operations, aiming to address inconsistencies across locations. Company representatives have been conducting visits to restaurants as part of this effort, and they intend to commence a search for a new permanent CEO later this year.
The closures and strategic initiatives underscore the evolving landscape within the restaurant industry, where even established chains like Red Lobster are not immune to economic pressures and shifting consumer preferences. As the company navigates these challenges, customers and industry observers alike will be watching closely to see how Red Lobster adapts and evolves in the coming months.