Ultimate Endless Real Estate Costs at Red Lobster

Art of Supply

Red Lobster, the largest seafood chain in the United States, declared bankruptcy on May 19, 2024. As of the filing, they had 551 locations operating in 44 states, but underperforming locations have already started to close.

What brought about the bankruptcy of the restaurant chain that rapper Flavor Flav describes as “one of America's greatest dining dynasties”? It wasn’t all-you-can-eat shrimp, as some have suggested, but it may very well have been endless real estate costs.

In this week’s episode of Art of Supply, Kelly Barner walks a mile in Red Lobster’s shoes:

• Tracing their rise as an innovative dining concept, the first restaurant to advertise on national television
• Evaluating the impact that a ‘sale leaseback’ of their real estate had on the chain’s long term profitability
• Questioning the rationale of being owned by their largest seafood supplier, and all of the complications that accompanied this circular relationship

Links:

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