Growing up, my family went to Red Lobster for special occasions, like birthday dinners and post-graduation lunches. Entering the restaurant and seeing the huge lobster tanks made me feel sophisticated, and we always had to wait for a table because it was so crowded. The wait was worth it, because when we arrived at our table we got to feast on savory cheddar biscuits and consistently good seafood.
But the last time my mom and I visited the same local Red Lobster for lunch, the feeling was vastly different. The restaurant was practically vacant; we couldn’t find a hostess to seat us, the interior looked worn out and dated and the whole place smelled musty and fishy. Needless to say, we left and ate lunch elsewhere.
So I wasn’t surprised when I heard that Red Lobster filed for Chapter 11 bankruptcy protection this year, and I felt it was one more thing that I could add to the nostalgia of my youth and reflect upon fondly.
In September, the restaurant chain announced they are exiting Chapter 11 through a restructuring agreement. RL Investor Holdings LLC is acquiring the famous restaurant chain, and former P.F. Chang’s CEO Damola Adamolekun is on board as the new CEO.
Adamolekun, a 35-year-old Harvard Business School and Brown graduate who was born in Nigeria and raised in Zimbabwe, Illinois and Maryland, has been vocal about his plan not to make a massive overhaul, but instead to make incremental changes to pivot into a new era and save the chain from bankruptcy.
Here are the changes Adamolekun proposes to revitalize Red Lobster:
Adamolekun has been clear that adjusting the menu is one of his first changes.
“The menu has gotten too big. We’re going to reduce the menu, but in a very intelligent way,” he said, stating the company is done closing locations. “We intend to grow from here,” he said.
On The Wall Street Journal podcast The Journal, he shared, “There’s a lot of non-core stuff there that not only complicates the kitchen, but it confuses the guest… When you come in and you get three menus… it’s difficult for the ops and it’s difficult for the guests. So cleaning up some menu processes, creating some discipline—these are the things that we can do to improve the business right away.”
2. Spruce up the restaurants and technology
Red Lobster has clearly suffered from a lack of investment, from technology to kitchen inventory to furnishings, and updating their 545 restaurant locations across 44 U.S. states and four Canadian provinces will make a tremendous difference to customers.
Adamolekun noted to The Journal, that “the obvious thing” people notice is the physical infrastructure. “It’s easy to spot a carpet that looks too old or something that’s torn or a chair that looks like it needs to be replaced… The good news is they’re also pretty easy to fix, right? If you have the money and you have the dedication to correct it, it’s just a matter of organizing your facilities teams and your vendors and your management companies and just dealing with it.”
Technology is another area Adamolekun plans to upgrade, including adding handheld credit card processors found at most restaurants now, so customers can pay their bills at their table, along with precise technology to determine table wait times.
“It takes investment, it takes capital, it takes determination, it takes some training, but once you get that in place, your quote times become more accurate, people can pay more easily, they’re not abandoning tables as frequently, and that improves the whole operation,” says Adamolekun.
3. Rethink the endless shrimp
Adamolekun admitted that Red Lobster’s Ultimate Endless Shrimp offer, which first launched in 2004, contributed to the restaurant filing for bankruptcy, created unnecessary employee stress and added “a lot of chaos.”
Endless Shrimp backfired tremendously for Red Lobster as customers sat at tables for long stretches of time, creating longer wait times and slower service.
“We knew the price was cheap. But the idea was to bring more traffic in the restaurants,” Thai Union CFO Ludovic Garnier said in an earnings call in November 2023.
As more customers ordered the $20 Ultimate Endless Shrimp promotion, the company admitted it was one of the key reasons for the chain’s roughly $11 million loss in the third quarter of 2023.
Adamolekun isn’t ruling out the possibility of the $20 endless shrimp deal returning in a different way.
“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.”
With these subtle yet key changes to Red Lobster’s operations, everyone hopes the seafood chain will bounce back from its bankruptcy filing.
“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 a Red Lobster press release in September.
Photo by pisaphotography/Shutterstock.com
