During my childhood, my family frequently dined at Red Lobster during significant events like birthday celebrations and post-graduation meals. Walking into the restaurant and gazing at the large lobster aquariums gave me a sense of sophistication, and we often had to wait for a table due to its popularity. The wait was definitely worthwhile, as we would indulge in delicious cheddar biscuits and consistently tasty seafood once we were seated.
However, during my last visit to the same local Red Lobster for lunch with my mom, the experience was strikingly different. The restaurant was nearly empty; we struggled to find a hostess to show us to our seats, the decor seemed aged and tired, and there was a musty, fishy odor permeating the air. Unsurprisingly, we chose to leave and find lunch elsewhere.
Therefore, I wasn’t shocked to learn that Red Lobster sought Chapter 11 bankruptcy protection this year. It felt like another addition to the repertoire of fond memories from my youth.
In September, the chain revealed that they would be emerging from Chapter 11 through a restructuring deal. RL Investor Holdings LLC is set to acquire the iconic dining establishment, and the previous P.F. Chang’s CEO, Damola Adamolekun, will take the helm as the new CEO.
Adamolekun, a 35-year-old graduate of Harvard Business School and Brown University, originally from Nigeria and who grew up in Zimbabwe, Illinois, and Maryland, has expressed a clear intention to implement gradual changes rather than a complete overhaul, aiming to transition the chain into a new era and steer it away from bankruptcy.
Here are the changes proposed by Adamolekun to rejuvenate Red Lobster:
1. Streamline the menu
Adamolekun has indicated that revamping the menu will be one of his initial actions.
“Our menu has become too extensive. We’re going to strategically narrow it down,” he stated, emphasizing that the company will cease closing locations. “From here on out, we aim to expand,” he added.
On The Wall Street Journal podcast The Journal, he elaborated, “There’s a lot of non-essential items on the menu that complicate kitchen operations and confuse our guests… When you walk in and are handed three menus… it makes things challenging for both the operations and the patrons. Therefore, refining some menu processes and establishing more discipline are immediate steps we can take to enhance the business.”
2. Refresh the restaurants and technology
Red Lobster has evidently suffered due to insufficient investment in areas such as technology, kitchen supplies, and decor, so updating their 545 locations spread across 44 U.S. states and four Canadian provinces could significantly enhance the customer experience.
Adamolekun pointed out to The Journal that “the first thing” people notice is the state of the physical premises. “It’s easy to identify aged carpeting, torn materials, or chairs that are in dire need of replacement… Fortunately, these issues can be relatively straightforward to resolve, right? With the right funding and commitment to correction, it simply involves organizing your facility teams, vendors, and management to address the problems.”
Technology is another key area Adamolekun aims to improve, including the addition of portable credit card readers that have become standard in many restaurants, enabling customers to settle their bills right at their tables, along with more accurate technology to assess table wait times.
“It requires investment, capital, motivation, and training, but once these elements are established, your wait times improve, patrons can pay more conveniently, and there’s a reduction in table abandonment, enhancing overall operations,” Adamolekun stated.
3. Reassess the Endless Shrimp promotion
Adamolekun acknowledged that Red Lobster’s Ultimate Endless Shrimp promotion, which first emerged in 2004, played a role in the chain’s bankruptcy, resulting in unnecessary strain on employees and causing “a lot of disorder.”
The Endless Shrimp promotion backfired significantly for Red Lobster, as customers lingered at their tables for extended periods, which led to increased wait times and diminished service quality.
“We recognized that the pricing was attractive. However, the goal was to drive more business to the restaurants,” stated Thai Union CFO Ludovic Garnier during a November 2023 earnings call.
As the popularity of the $20 Ultimate Endless Shrimp promotion surged, the company disclosed it was a primary factor behind the chain incurring roughly $11 million in losses in the third quarter of 2023.
Adamolekun is not entirely dismissing the idea of reintegrating the $20 Endless Shrimp offering, albeit in a different format.
“I wouldn’t say it’s completely off the table, but certainly not in the manner it was previously executed,” he remarked. “We won’t approach it in a way that incurs losses or lacks management.”
With these essential yet understated adjustments to Red Lobster’s operations, there is optimism that the seafood chain will recover from its bankruptcy challenges.
“Red Lobster has an exciting future ahead, and I eagerly anticipate collaborating on our strategy with the more than 30,000 team members across the USA and Canada,” Adamolekun stated in a press release from Red Lobster in September.
