Red Lobster seeks to adjust to a changing economy as casual dining restaurants face headwinds
Los Angeles — Red Lobster is running advertisements with retired NBA power forward Blake Griffin, hoping it can help drive struggling profits forward.
It's part of a full-court press to get customers back in the door and make one of the nation's oldest casual dining chains relevant again.
"A lot of people, their early experiences with seafood were at a Red Lobster," said Red Lobster CEO Damola Adamolekun, who is leading the transformation.
Adamolekun took over last September, shortly after the chain closed several dozen locations and filed for bankruptcy, along with TGI Friday's, Buca di Beppo and about a dozen other restaurant brands in 2024. There are now 544 Red Lobster locations across the U.S. and Canada.
At age 36, the Nigerian-born, Ivy League grad is the youngest CEO in Red Lobster's nearly 60-year history, and he's now taking on its toughest challenge.
"You know, crisis, it forces you to move quickly, make decisions, and you can't stew too long on like, am I ready or am I not," Adamolekun said. "…I think there's always a way to make something work, you just need to find the solution."
The former investment banker immediately made waves by eliminating Red Lobster's iconic endless shrimp deal.
"It's an expensive product," Adamolekun said. "The way they were doing it was unmanaged."
He also trimmed down the menu while introducing new items.
Five years ago, the COVID-19 pandemic caused a seismic shift in casual dining. According to the foodservice data company Technomic, full-service chain restaurants saw a 28.6% drop in sales, compared to just a 1.9% drop for fast food places.
These days, inflation is still preventing many Americans from dining out, while restaurants are navigating rising food costs.
Adamolekun admits some of these increased costs are being passed on to Red Lobster's customers.
"Your entire cost structure is gonna move up somewhat, and prices in the country will go up somewhat, but I don't want to be higher than overall inflation," Adamolekun said.
Red Lobster is no longer in bankruptcy, and an industry survey last month from the National Restaurant Association shows that about eight in 10 restaurant operators expect sales in 2025 to be the same or higher as last year.
"What people, especially young people, need in addition to great food is a great atmosphere," Adamolekun said. "The place you can come in, feel good, it looks nice. So if you don't live up to what they expect, they won't come back. They'll go somewhere else, or they'll eat at home."
