Red Lobster bankruptcy: What to know
Restaurant chain Red Lobster has filed for Chapter 11 bankruptcy due to high labor costs, rising rents, and the impact of its unlimited shrimp deal. In 2023, Red Lobster made their $20 endless shrimp deal permanent, which cost them $11 million and contributed to a $76 million loss for the fiscal year. Yahoo Finance Host Brad Smith explained the details on May 20, 2024.
Video Transcript
Unlimited shrimp deals for $20.
Well, it turns out the Red Lobster deal may have been too good to be true.
The Orlando based chain filed for chapter 11 bankruptcy, citing high labor costs, rising rents and yes, unlimited shrimp in May 2023 the struggling seafood chain which was seen as a 30% drop in diners since 2019.
They announced that their $20 ultimate endless shrimp would become permanent.
A disastrous move that ended up costing them $11 million with inflation worries causing diners to eat out less.
Red Lobster lost $76 million in the 2023 fiscal year.
