Red Lobster’s new CEO Damola Adamolekun admitted that its $20 endless shrimp offering — which contributed to the restaurant filing for bankruptcy — stressed out employees and created “a lot of chaos.”
Adamolekun, 35, was tapped to take over the floundering company in August after the Orlando-based chain suddenly shuttered 100 locations and filed for Chapter 11 protection.
The “endless shrimp” promotion first launched in 2004 and originally just lasted one week but a sea of mayhem happened after the company made it a permanent item on the menu in May 2023. Leaders underestimated how popular it would be and the company lost an estimated $20 million that year.
“You stress out the kitchen. You stress out the servers. You stress out the host,” Adamolekun told CNN. “People can’t get a table. It creates a lot of chaos operationally.”
The Orlando-based company filed for bankruptcy protection in May 2024.
Then-CEO Jonathan Tibus blamed a previous CEO, Paul Kenny, for making the endless shrimp promotion permanent for customers “despite significant pushback from other members of the company’s management team,” according to the bankruptcy filing.
The filing added that the chain suffered major shrimp shortages and caused issues with the “company’s normal supply chain and demand planning processes.”
In August, a US bankruptcy judge approved the company’s reorganization plan so it could exit Chapter 11 bankruptcy protection and sell to a lender group led by asset manager Fortress.
Red Lobster had 650 locations before the endless shrimp promotion caused the largest shareholder, Thai Union, to write off $530 million in the fourth quarter of 2023. During the bankruptcy process, more than 50 locations were even auctioning equipment as part of the liquidation.
Despite the hefty money issues, Red Lobster still kept its three-level location in Times Square which costs $2.2 million each year to rent.
Now, only 545 locations remain in the US.
Adamolekun, previously PF Chang’s CEO, hopes to have smooth sailing ahead with a long-term investment plan that includes a commitment of more than $60 million in new funding.
“Red Lobster has a tremendous future, and I cannot wait to get started on our plan with the company’s more than 30,000 team members across the USA and Canada,” Adamolekun said in September.
Red Lobster has had five CEOs since 2021 and in its 56-year history, there have been multiple ownership changes including being sold to General Mills, Darden Restaurants and a private equity firm in 2014.
Adamolekun said that endless shrimp may return to the menu later only if it doesn’t cause the same problems.
“I never want to say never, but certainly not the way that it was done,” he said. “We won’t have it in a way that’s losing money in that fashion and isn’t managed.”
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
