Why is Red Lobster bankrupt? No, it’s not just about endless shrimp

Beloved seafood chain Red Lobster has filed for Chapter 11 bankruptcy protection after news last week that it was closing almost 50 restaurant locations in the United States.

Although much has been made about the restaurant’s decision to make its $20 endless shrimp deal a permanent menu item—underestimating demand and leading to an $11 million loss, according to its largest shareholder, Bangkok-based Thai Union Group—that loss-making promotion is only one part of the chain’s financial difficulties, which date back years.

Here’s what you need to know:

THE RISE AND FALL OF A FAST-CASUAL GIANT

Founded in 1968 in Lakeland, Florida, by Bill Darden and Charley Woodsby, Red Lobster brought affordable seafood to inland America, revolutionizing casual dining. General Mills acquired the brand two years later, helping it expand rapidly. But Red Lobster has since struggled to keep up with changing market dynamics, consumer preferences, and, more recently, inflationary pressures.