Popular US chain has quietly been closing restaurants

A once-thriving US chain has closed dozens of restaurants following its filing for bankruptcy in 2024, but the brand claims shuttering sites ‘isn’t a step back’.

When it comes to United States institutions, some are thriving and expanding; Raising Cane’s and Jersey Mike’s Subshave both detailed plans to open their first British sites this year, as has Houston Hot Chicken.

Meanwhile, others are apparently feeling the pinch: Dairy Queen franchisees have been slowly and quietly closing stores, Pizza Hut put 1,210 employees at risk of redundancy last October, and Wendy’s said all underperforming US locations would shut up shop for good.

Another brand gradually fading from the American restaurant scene is Red Lobster.

At the end of 2023, there were approximately 650 locations across the USA.

Now, AL reports that a total of 484 Red Lobsters are still in operation across the nation, a 25 percent drop in its footprint.

Red Lobster seafood restaurants have been shutting up shop for the last three years (Getty Stock Image)

A total of six more Red Lobsters have closed in recent weeks, according to the Nation’s Restaurant News (NRN): three in Alabama, two in Illinois, and one in California.

The closures come after a Chapter 11 bankruptcy process begun in early 2024, with ex-owners Thai Union citing ‘industry headwinds’ and ‘rising labour and material costs’.

Former CEO of the chain, Jonathan Tibus, wrote in court documents that business struggles also included ‘difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry’.

Red Lobster exited bankruptcy after being acquired by private investor group RL Holdings, according to CNBC.

In a statement, the company said that it didn’t see the ongoing depletion of its sites as ‘a step back’.

The chain said shuttering sites was not a step back (Red Lobster)

“It’s how we build forward,” a spokesperson remarked.

“Right-sizing our footprint strengthens the brand and enables things like more restaurant refreshes and a stronger guest experience at the locations built to carry the brand’s future, putting Red Lobster on solid ground for sustainable growth, now and for the long term.”

The Orlando company’s restaurant refresh strategy was also discussed in late summer, with Red Lobster issuing a statement to SeafoodSource.

It said that under CEO Damola Adamolekun’s leadership, the chain had ‘focused on Red Carpet Hospitality, stronger operational discipline, menu innovation, and the guest-favorite seafood experiences that define the brand’.

“Red Lobster knows guests are making more intentional decisions about where they spend their dining dollars.”

Sites are due to get a makeover both inside and outside (Getty Stock Image)

The statement added: “That makes value incredibly important, but value is not only about price. It is about what guests feel they get for the money: the food, the hospitality, the atmosphere, and the overall experience.”

It was confirmed that guests would soon see updates to the exterior of locations, their arrival experience, dining rooms, seating, lighting, flooring, wall finishes and bar areas, as per the publication.