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Red Lobster’s Path to Recovery After Bankruptcy

After emerging from bankruptcy in September, Red Lobster faces the challenge of reinventing its business model to attract diners beyond its previous all-you-can-eat shrimp offer. With a new leadership team and strategic direction, the chain is exploring fresh approaches to win back customers.

In 2023, diners were lured by a $20 deal for unlimited shrimp, a promotion that proved popular but financially detrimental to Red Lobster’s previous parent company. This led to the company filing for Chapter 11 bankruptcy in May. Subsequently, it emerged from bankruptcy mid-September under the ownership of Fortress Investment Group, featuring a new CEO and a reduced number of locations. The critical question remains: How can Red Lobster entice customers back while ensuring profitability?

Damola Adamolekun, the newly appointed CEO of Red Lobster, shared his vision for rejuvenating the brand in an October interview with CNN. He highlighted plans to introduce more appealing menu items, including unique presentations such as dishes served on sizzling-hot stone plates to capture the interest of a younger demographic. However, the chain will maintain certain classic offerings, like flounder, to cater to its established customer base.

While Adamolekun hasn’t dismissed the potential return of the endless shrimp promotion, he emphasized that any revival would need a more sustainable model. “I never want to say never, but certainly not the way that it was done,” he remarked, signaling a thoughtful reconsideration of past strategies.

In my visit to a Red Lobster restaurant in the Washington, DC area in September, I explored the dining experience and assessed what changes may be necessary for future success. Here are my observations:

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