Red Lobster closes 2 New York locations amid Chapter 11 bankruptcy
FILE - A Red Lobster restaurant in Lakewood, California, on May 15, 2024. Photographer: Eric Thayer/Bloomberg via Getty Images
NEW YORK - Two Red Lobster locations in New York are closing after another round of restaurants after filing for Chapter 11 bankruptcy earlier this year.
See below for the following New York locations that will close:
- 750 Upper Glen Street, Queensbury
- 925 Hunts Point Ave, Bronx
To see the list of other Red Lobster locations closing throughout the country, click here.
In the wake of the COVID-19 pandemic, Red Lobster looked to boost traffic to its restaurants by offering a $20 all-you-can-eat shrimp deal that the company hoped would serve as a loss-leader and bring in more customers who would become regulars.
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However, the deal itself proved too good for customers to pass up. The Los Angeles Times reported that some patrons took to social media to brag about how many shrimp they were able to scarf down, including one woman who said she ate 108 shrimp during a four-hour meal.
All-you-can-eat-shrimp proved too costly
In this photo illustration, a cooked lobster is displayed on a plate at a Red Lobster restaurant on May 20, 2024 in Austin, Texas. Red Lobster has filed for Chapter 11 bankruptcy protection after a failed lease-back agreement and "endless shrimp" pr
As customers looked to gorge themselves on shrimp and opted to continue consuming Red Lobster's discounted fare, the company took bigger losses on the promotion.
"You already have a small profit margin," Jim Salera, a research analyst at Stephens focused on restaurants and packaged food and beverages, previously told FOX Business. "You can very easily go beyond that when you're attracting consumers who are just looking to have that one item or engage with that one offering and not kind of branching out across the menu."
Red Lobster files for bankruptcy
The 56-year-old chain filed for bankruptcy in May, days after shuttering dozens of restaurants.
"This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth," CEO Jonathan Tibus said. Tibus, a corporate restructuring expert, took the top post at the chain in March.
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According to court filings, Red Lobster had 551 U.S. restaurants, 27 restaurants in Canada and 27 franchised locations in Mexico, Japan, Ecuador and Thailand. The company said it has 36,000 employees in the U.S. and Canada.
Sometimes, Red Lobster would lower its prices to compete, a move that was often disastrous. In 2003, the company lost millions of dollars on an all-you-can-eat "Endless Crab" promotion when crab prices rose, Allen said. Twenty years later, the chain did the same thing with an "Ultimate Endless Shrimp" promotion.
FOX News contributed to this report.