Major restaurant chain loved by Americans announces stores ‘are no longer viable’ - see if your eatery is affected

RED Lobster has announced that at least eight of its locations were deemed "no longer viable" resulting in them being shut down.

American families enjoyed dining at the numerous Red Lobster restaurants, mainly located in the eastern half of the nation, for decades before they closed in recent months.

The eight restaurant shutdowns happened over the past three months as part of a regular review.

"We regularly review our restaurant portfolios as part of the normal course of business,” a Red Lobster spokesperson said to Restaurant Business Online in a statement.

"As a result, we have concluded that these locations are no longer viable for Red Lobster."

Red Lobsters in Syracuse, New York, and Albemarle County, Virginia, were reportedly closed down just last week, according to local news outlets.

A location in St. Louis was reported closed earlier this month while locations in Beachwood, Ohio; San Angelo, Texas; and Oakhurst, New Jersey; reportedly shut down in December. 

In November, a Red Lobster in Naples, Florida, shut its doors and another store in Danville, Virginia, closed recently as well.

The multiple restaurant closures represent a little more than 1 percent of the chain’s approximately 670 domestic units and show the continuation of a trend.

Red Lobster’s American footprint lessened by five stores In 2021, and it was down by four in 2020, according to Technomic data.

'DIFFICULT'

Along with most of the U.S., the company has reportedly been hit by skyrocketing inflation with high food and labor costs, causing the restaurant chain to lose $15.3million.

The losses are much more than Red Lobster's owner Thai Union Group's forecast for the third quarter of negative $10.4million, according to a recent earnings call.

Despite the losses and closing of numerous locations, the Thailand-based seafood distributor did declare that it is committed to fixing Red Lobster, which it acquired in 2020.

CFO Ludovic Regis Henri Garnier and interim Red Lobster CEO Paul Kenny have been making their rounds to restaurant locations around the country to get a good idea of challenges.

“I think our understanding of the business is much deeper compared to what we had before," Garnier said during the November earnings call, per Restaurant Business Online.

"And before, it was really managed by our other partners. But now, since the beginning of the year, we really started up in the management."

The company is working on improving Red Lobster's menu and operations, Garnier said.

He added that the changes could be inconsistent from restaurant to restaurant. 

"The situation is difficult, but I think we are on track," Garnier said. 

"We see some positive sign from the operations side. We don't see that yet in the numbers... We expect in Q1 '23 to start seeing some improvement in terms of financial performance."

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