Seafood restaurants had a difficult year in 2024, and even today, some of the biggest names in the category are still finding their footing.
Sales across seafood chains fell by more than $500 million in 2024, according to Nation’s Restaurant News, citing Technomic data.
Red Lobster was a major part of that decline, with sales falling 20.2% that year as the company filed for Chapter 11 bankruptcy and closed restaurants.
The broader category was weak, too, and even without Red Lobster, about 21 seafood chains in Technomic’s Top 500 brought in $63 million less than they did in 2023, a 1.6% decline.
Popular chains such as Joe’s Crab Shack and Bonefish Grill also struggled, reporting declining sales and multiple closures, with Joe’s closing at least a third of its restaurants in the past two years.
This pressure may not ease quickly.
According to the US Department of Agriculture (USDA) Food Price Outlook, seafood prices are predicted to grow faster than their 20-year historical average growth in 2026.
Meanwhile, food-away-from-home prices rose 4.1% in 2024 and 3.8% in 2025, faster than their historical average of 3.5% per year.
As Red Lobster tries to survive these changes and rising competition, it is making its attempted comeback harder. As the chain is not only recovering from bankruptcy, it is doing so in a category where many seafood restaurants are already under pressure.
Now, Red Lobster has closed two more restaurants, including one with a long history with the company.
Red Lobster closes two more restaurants
Red Lobster recently closed one of its oldest continuously operating restaurants, located on North Monroe Street in Tallahassee, Florida, on May 24, after 56 years in business.
The Tallahassee location opened in 1970, two years after the first Red Lobster location in Lakeland, Florida, founded by Bill Darden, who wanted to make seafood more affordable and accessible to customers, even those living far from the coast.
The Tallahassee closure carries extra weight because the restaurant has become a local landmark and a piece of Red Lobster’s early expansion story.
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The closure comes shortly after another symbolic shutdown in Louisiana.
Red Lobster recently closed its Baton Rouge restaurant at the Mall of Louisiana, leaving Monroe as its only remaining location in the state.
Red Lobster confirmed to TheStreet the recent closures of the Tallahassee location on May 24 and the Baton Rouge location on April 15.
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Red Lobster CEO says chain needs to get smaller
The closures come as Red Lobster is still trying to rebuild after bankruptcy and its own CEO, the 37-year-old Damola Adamolekun, has acknowledged that the chain may need to shrink further.
Adamolekun told the Wall Street Journal earlier this year that to return to a pre-bankruptcy era, the seafood chain needs to slim down further.
The chain closed about 130 restaurants during its 2024 bankruptcy, leaving it with around 528 locations by the end of the year. But Adamolekun says Red Lobster still needs to close underperforming restaurants and improve many locations that remain open.
Noting that while there are lots of “positive signs,” they still “inherited a very damaged brand,” which needs many repairs to properly function.
There have been some signs of improvement, with sales up 10% amid improved customer sentiment, but the chain has not yet returned to pre-bankruptcy performance levels.
This makes the latest closures part of a larger reset. Red Lobster is trying to bring customers back through a limited-time return of its endless shrimp, menu changes, and improved service, while also deciding which restaurants still make sense for the business.
Red Lobster used similar language when explaining the closures.
“As part of the normal closure of business, Red Lobster continuously evaluates restaurant performance and lease terms and may, from time to time, choose to close select restaurants,” the company told TheStreet. “These closures reflect individual location circumstances, including performance and lease-related considerations.
“We’re grateful to the team members who served our guests at these locations over the years, and we remain committed to making thoughtful decisions that position Red Lobster for long-term success, stability, and growth,” noted the company statement.
Red Lobster did not mention the exact number of employees laid off or transferred as part of the closure.
Red Lobster’s bankruptcy showed a major reset
Red Lobster exited Chapter 11 bankruptcy in September 2024 after completing its acquisition by RL Investor Holdings LLC, just a few months after the filing.
After the exit, the company became an independent, privately held business with 545 restaurants across 44 U.S. states and four Canadian provinces, and also appointed a new, young CEO.
The company said its new ownership structure included a long-term investment plan with more than $60 million in new funding to improve the business. But the company’s bankruptcy filing estimated nearly $300 million in debt, with $11 million in quarterly losses from its all-you-can-eat shrimp promotion.
Restaurant leases were also part of the restructuring, and the company has continued to cite lease terms when discussing closures.
And now, even as it continues to close some locations, Red Lobster is trying to rebuild customer excitement and cash nostalgia.
In April, the chain brought back Endless Shrimp for a limited time after receiving thousands of social media mentions from customers asking for the promotion to return.
“This is about putting our guests first and bringing back something they truly love,” said Adamolekun. “Endless Shrimp has been part of Red Lobster’s legacy for 20 years, and our guests have never stopped asking for it.”
The return is notable because Endless Shrimp became closely tied to Red Lobster’s pre-bankruptcy troubles after the company made the promotion permanent. This time, the company is bringing the offer back for a limited time.
But for customers in Baton Rouge and Tallahassee, this, along with the fan favorite Cheddar Bay Biscuits, is not coming back.
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