North Bay fans of cheese-soaked seafood had better avert their appetites elsewhere, as the area’s lone Red Lobster franchise closed without notice last week.
Red Lobster on Redwood Drive in Rohnert Park was one of dozens of locations across the U.S. that boarded up windows as part of a massive liquidation of assets; equipment from the 48 locations that were closed will be auctioned off in the next few days through TAGeX Brands liquidators. The company subsequently filed for Chapter 11 bankruptcy, citing nearly $1 billion of debt.
The seafood chain’s parent company Thai Union Group mulled filing for Chapter 11 back in April in an effort to restructure its looming debt. The company had been dogged by labor and lease costs, according to Bloomberg. But the mighty fried seafood behemoth may have ultimately been sunk by those among the smallest of sea life: shrimp.
Launched in June 2023, the chain’s “Ultimate Endless Shrimp” offering was a rare deal that was too good to be true. The $20 for all-you-can-eat shrimp was enormously popular, but not enormously cost-effective from a business standpoint. The shrimp deal was credited with playing a not-so-shrimp-sized role in the company nearing a $20 million loss in 2023. The chain eventually raised the price to $25, but the ship had already sailed into an iceberg.
According to Restaurant Business, a trade magazine, Thai Union was aware the Endless Shrimp promotion was a money loser for the company, but hoped it would serve as a way to establish new loyal customers who would move on to a variety of menu items. But it turned out Americans’ hunger for cheap fried shrimp was, ultimately, endless.
“We need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion,” CFO Ludovic Regis Henri Garnier said in a recent earnings report.
