Red Lobster, the prominent U.S. seafood restaurant chain with approximately 650 locations nationwide, is set to file for bankruptcy following a costly promotional campaign offering an all-you-can-eat shrimp deal that inflicted significant financial losses on the company.

Financial Challenges and Closure of Outlets

Despite its widespread presence, Red Lobster recently closed numerous outlets due to financial strain. Thai Union Group, the majority owner, announced a cessation of further financial support for the chain earlier this year.

Red Lobster intends to leverage the bankruptcy process to secure concessions from landlords and reach agreements with creditors to sustain its operations, potentially reducing its substantial debt burden.

Industry-wide Struggles

The broader restaurant industry is experiencing difficulties, with chains like Tijuana Flats and Sticky’s Finger Joint also filing for bankruptcy in recent weeks. Additionally, Dom’s Kitchen & Market and Foxtrot Market have closed their doors in response to economic challenges.

A notable trend observed amid economic pressures is the growing number of Americans opting to grow food at home due to rising grocery costs. The National Gardening Association reported a significant increase in home gardening, reflecting a shift in consumer behavior.

Escalating Food Prices

According to the U.S. Department of Agriculture, at-home food prices surged by 11.4% in 2022 and an additional 5.8% in 2023, compounding financial strain on consumers and impacting dining-out habits.

Core consumer prices have risen consistently, with March marking the third consecutive month of growth. Core inflation rose by 0.3% in April, highlighting ongoing economic challenges for businesses and consumers alike.