Red Lobster filed for bankruptcy in May 2024, marking the end of an era in American casual dining. Founded in 1968, it thrived in the 1980s and 90s as a seafood restaurant chain. However, corporate mismanagement, ownership changes, and a focus on cost-cutting led to declining sales. Structural issues compounded by the COVID-19 pandemic worsened the situation. Rising seafood costs and consumer spending cuts sealed the chain's fate, despite its previous cultural significance and promotional successes.
The real story is a classic one of corporate mismanagement and cost-cutting, colliding with the structural issues many other casual dining chains have faced since the COVID-19 pandemic.
Rising seafood costs led to Red Lobster being sold off to a private equity firm, further complicating its operational challenges and strategic outlook.
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