Red Lobster announced it is closing 99 restaurants across the country.
A cost-effective seafood deal has proven to be part of Red Lobster's financial undoing, as the chain has announced it is closing 99 restaurants in at least 27 states. Executives say its popular all-you-can-eat shrimp deal, coupled with a slow down in traffic, could put the chain in the position of filing for bankruptcy.
Last summer Red Lobster announced the $20 shrimp deal would become a permanent fixture on the menu.
Social media users turned the shrimp offer into a food challenge. And as a whole, more customers took advantage of the deal than Red Lobster expected.
The endless shrimp deal triggered an $11 million loss in the chain, Red Lobster said.
A Red Lobster restaurant in New York City now only offers the all-you-can-eat shrimp deal on Mondays.
“All-you-can-eat is a wonderful thing in theory, but then you’ve got to be able to deliver on that and evidently, there’s been all sorts of challenges,” Kate Edwards of the New York City Hospitality Group tells Inside Edition. “They’re now having to go back and raise their prices to try to create a little more profitability while they’re also closing down locations. It’s a perfect storm.”
The first Red Lobster opened in 1968 outside Orlando, Florida.
