Red Lobster Shutters Two More Locations as Seafood Sector Faces Continued Headwinds
The seafood restaurant industry has yet to shake off the turbulence that defined 2024, and some of its biggest players are still navigating choppy waters. Across the sector, sales at major seafood chains fell by more than $500 million last year, according to Nation’s Restaurant News, citing data from Technomic. Red Lobster, long a dominant name in the category, saw its own sales drop 20.2% during that period as it filed for Chapter 11 bankruptcy and closed dozens of locations.
Even excluding Red Lobster’s impact, the broader category remained weak. Technomic’s Top 500 ranking shows that roughly 21 seafood chains collectively brought in $63 million less in 2024 than the previous year — a 1.6% decline. Chains such as Joe’s Crab Shack and Bonefish Grill have also struggled, with Joe’s closing at least a third of its restaurants over the past two years.
That pressure is unlikely to ease soon. According to the U.S. Department of Agriculture’s Food Price Outlook, seafood prices are expected to rise faster than their 20-year historical average by 2026. Meanwhile, food-away-from-home prices climbed 4.1% in 2024 and 3.8% in 2025, both above the historical average of 3.5% per year. These cost headwinds compound the challenge for chains trying to rebuild foot traffic.
Against that backdrop, Red Lobster has closed two more restaurants, including one with deep ties to its early history. The Tallahassee location on North Monroe Street, which had been operating continuously since 1970, closed on May 24 after 56 years. It opened just two years after the first Red Lobster in Lakeland, Florida, founded by Bill Darden with the mission of making seafood affordable and accessible even to inland customers. The closure carries symbolic weight, as the restaurant had become a local landmark and a tangible link to the chain’s expansion story.
The other closure, which took place on April 15, was at the Mall of Louisiana in Baton Rouge, leaving Monroe as the chain’s only remaining restaurant in the state. Red Lobster confirmed both closures to TheStreet.
These shutdowns are part of a larger recalibration that CEO Damola Adamolekun has openly signaled. The 37-year-old executive told The Wall Street Journal earlier this year that to return to a pre-bankruptcy footing, the chain needs to slim down further. During its 2024 bankruptcy, Red Lobster closed roughly 130 restaurants, ending the year with about 528 locations. But Adamolekun has said there are still underperforming stores to close and many others that require significant improvements. “We inherited a very damaged brand,” he noted, adding that while there are “positive signs,” the brand still needs extensive repairs to function properly.
There have been some encouraging signs: same-store sales are up 10% as customer sentiment improves, but the chain has not yet returned to its pre-bankruptcy performance levels. The latest closures are therefore part of a deliberate reset. Red Lobster is trying to lure back customers through a limited-time return of its Endless Shrimp promotion, menu tweaks, and better service, while simultaneously deciding which restaurants still make sense for its portfolio.
In a statement to TheStreet, the company said: “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. 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.” The chain did not disclose the number of employees affected by the latest closures.
Red Lobster emerged from Chapter 11 bankruptcy in September 2024 after being acquired by RL Investor Holdings LLC, becoming an independent, privately held company with 545 restaurants across 44 U.S. states and four Canadian provinces at the time. The new ownership pledged more than $60 million in fresh funding for improvements, though the company’s bankruptcy filing estimated nearly $300 million in debt and cited $11 million in quarterly losses tied to its all-you-can-eat shrimp promotion. Lease renegotiations were a key part of the restructuring, and the company has continued to cite lease terms when explaining closures.
Even as it shrinks its footprint, Red Lobster is leaning into nostalgia. In April, the chain brought back Endless Shrimp for a limited time after thousands of social media mentions from customers demanded its return. “This is about putting our guests first and bringing back something they truly love,” Adamolekun said. “Endless Shrimp has been part of Red Lobster’s legacy for 20 years, and our guests have never stopped asking for it.” The move is notable because Endless Shrimp became emblematic of the chain’s pre-bankruptcy struggles after it was made a permanent menu item. This time, the offer is intentionally limited.
For customers in Baton Rouge and Tallahassee, however, the return of Endless Shrimp — and the beloved Cheddar Bay Biscuits — won’t be available at those shuttered locations. The closures underscore the delicate balance Red Lobster must strike between reviving brand affection and making the hard choices necessary to survive in a category that remains under immense pressure.
This story was originally published by TheStreet on May 26, 2026, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.