Red Lobster exited bankruptcy in September after decades of declining sales and a disastrous all-you-can-eat shrimp promotion. Now, they’ve hired 35-year-old Damola Adamolekun as its new CEO to see the brand through bankruptcy and out the other side. Adamolekun revitalized P.F. Chang’s during Covid and hopes to do the same for America’s oldest seafood chain.
WSJ’s Heather Haddon spoke to the new, millennial CEO in Orlando to learn his plans to bring the casual dining restaurant back to its former glory.
Chapters:
0:00 Red Lobster’s new CEO
0:41 Immediate fixes
3:37 Challenges ahead
6:22 Goals for the next few years
Watch the full, wide-ranging interview here: https://on.wsj.com/4eOzJhI
#RedLobster #Food #WSJ
– This can be the greatest comeback in the history of the restaurant industry. – [Heather] This is Damola Adamolekun, – Let’s do it.
– Red Lobster’s new CEO. After decades of declining sales and a promotion that was
a little too popular, – [Advertiser 1] Ultimate
endless shrimp is here with a limited time. – [Advertiser 2] Flavor drop. – [Heather] the 35-year-old was hired by private
equity firm, Fortress, to lead Red Lobster out of- – Bankruptcy. – More than a billion dollars in debt and a serious financial pinch. – And back to profitability. It’s worked before. He revitalized PF Chang’s during COVID. Fortress hopes he can do the same for America’s oldest seafood chain. I spoke to the new CEO at
a Red Lobster in Orlando to learn what it will take to
save the chain from sinking. (dramatic music)
(engine humming) So, I actually had dinner here last night. – Oh, did you?
– And I have to say, one of the things I first noticed was the banner outside basically like, we’re open.
(Damola laughing) America, we are open. Are you doing that throughout your fleet of restaurants basically to
kind of get past the bankruptcy? – That was done before I took over. The signs are still there. You’re correct. I think at some point, you want to address the
elephant in the room, but you want to do it in a
way that better reminds people of why they wanna come to
you in the first place. – The elephant in the room
is Red Lobster’s bankruptcy. When Red Lobster filed, it
was over $1 billion in debt and had to close over a
hundred stores in 2024. Now, with $70 million from Fortress, Adamolekun has a lot to do. What’s your to-do list look like? – Well, number one was to
build the executive team. To run a great business,
you need great leaders. – [Heather] Over the past few years, Red Lobster has cycled
through multiple CEOs. I asked an expert in casual dining why that’s such a problem. – When your leadership consistently changes over and over again, it’s very hard to get strategic direction. What ends up happening is that you get a sort
of a confused message to the restaurant managers
at the unit level. – Adamolekun hopes that
he’ll convey a clear message to restaurants with an
important change, a new menu. Before diving into the nuts and bolts, – Sure.
– tell me what is your favorite thing to order? – I would’ve said the Snow Crab, but I tried that Bairdi Crab recently, – Mm.
– which is a variation on the Snow Crab, and that
is my new favorite, I’ll say. – [Heather] He says that other favorites aren’t prominently displayed on the menu and bestselling items like
Create Your Own Ultimate Feasts are buried on page three. – [Damola] If you were to say, where’s the value in this
menu, you have to hunt for it. – [Heather] Mm-hmm. – So, there’s things
you can do both in terms of reducing the number of items, but also just the layout, the
aesthetics, the photography. – Adamolekun says that
for the new menu to work, it needs a new environment. Old Red Lobsters like this
one feature dark interiors, aging decor, and separated bar areas. How ambitious do you think
that brand refresh could be? – So, it’s gonna come in stages. The first stage is things that should have been fixed
a long time ago that weren’t, whether it’s roofing
or tiling or HVAC units or kitchen equipment or furniture. As a next step, you’ll think about how do you inject energy
into the restaurant, but I wanna start with a
very low cost way to do that. For example, it doesn’t cost
anything to change the music. Dimming lights has no cost to it. And then, the third stage
would be a complete remodel. We remodel the entire fleet at PF Chang’s. – [Heather] The Red Lobster
I visited in Orlando is one of the three updated restaurants, and it’s going to act as a jumping off point for future designs. – I think it can be powerful,
but I don’t think it’s enough. I think if you’re just doing that, you’re sort of putting
lipstick on a pig in a way and you’re not really addressing
a lot of the core issues. – Any sense of how much that might cost? – Well, when I did a PF Chang’s, it cost us about three, between 300 and 400,000 per restaurant. Now, it lifted sales between
5 and 10% in our restaurants that we did remodels in.
– Wow. That’s significant. But Red Lobster isn’t
just facing challenges inside its restaurants. Bankruptcies from Red Lobster and chains like TGI Fridays,
Rubio’s Coastal Grill, and Tijuana Flats mean that
dining in 2024 is on track to have the highest level of bankruptcies in decades, besides 2020. – Coming out of the pandemic,
casual dining exploded. It was doing really well and
it’s really come back to earth, and probably since about mid-2022, we’ve started to see traffic that has really declined
on a year over year basis. – It’s not an easy environment right now. You’re coming in
– No, it’s not. – at a tough time. – It’s a challenged industry. But I took over PF Chang’s during COVID. I’m used to entering at a tough time. – Part of the reason these times are tough are because they’re shrimp,
the centerpiece of one of the restaurant’s most popular specials. – [Advertiser 3] Enjoy it all, because Red Lobster’s one and
only Endless Shrimp is now. – How much do you think commodity costs, kind of looking back again, could have played into some
of Red Lobster’s troubles, particularly when you’re
giving away all the shrimp? – When food costs are high, your cost of goods gets out of whack. And what that does to the rest
of your restaurant margin, it really throws it off. – If a family of four comes in and they ordered lobster,
which is a premium product, but that’s what they come to us for, can you have affordable pastas and salads and bowls to round out the table? – [Heather] Rising prices
mean that workers’ wages have to increase to keep
pace with the cost of goods. – It’s difficult because
it’s very localized. Even within the same city, you’ll have different segments of the city where wages are totally different. So, you need to be watching it constantly. – Prior to the bankruptcy, some restaurants that didn’t
have a hostess or a bartender. – You guys can follow me on display. – What was the staffing
situation when you got here? – Decisions were made that
at certain volume levels there wouldn’t be a dedicated host. So, as you come in as a guest, you come in and there’s no host, that can be a very negative
start to your dining experience. – [Heather] He says he
wants to change that, which experts say is not easy to do while keeping prices low. – The average restaurant
worker wage is up 30% and that’s driven those menu prices up, which is also just caused a lot of the other inflation
that’s been happening there. The wage situation, the
benefits, all of those things that go into creating a satisfied worker are extremely important as
part of the turnaround process. – With casual dining, are some of its challenges demographic? – I think part of the challenge
that casual dining has today is that it needs to figure
out ways to be more relevant to the millenial consumer,
to the Gen Z consumer. The younger consumers
are a lot more accustomed to a counter service, order first, fast casual
style environment. – I think there’s always
going to be a place for the connection that you can get between
a server and a guest. – Okay, I’ll get that started for you all. – People want that personalized service. They wanna sit down, have a great meal in a great environment. This is a brand that’s
been around 56 years. 98% of Americans know Red Lobster. It’s one of the strongest
brands in the country. – Awareness is great, but if
you are an aware non-user, you’re still not going to the restaurant. And so, the challenge is twofold. It’s creating more awareness, but then being effective enough in turning that awareness into a visit. – [Heather] If you can turn
awareness into more visits and draw in new, younger customers, Adamolekun may successfully turn the page for this 56-year-old chain. – That chapter, no pun intended, but that chapter is complete and we’re entering a new chapter that’s gonna be about
investment and growth. (soft upbeat music)
36 Comments
Watch the full, wide-ranging interview here:https://on.wsj.com/497gwGJ
Even tho you think that, he is the CEO AND your comment didn't age well did it WSJ? Lol
He giving off young Gustavo Fring vibes. 😂😅
Let’s be honest red lobsters food sucks lol
The real question is, 'how does he motivate the team?' If you're a CEO, employee wages are seen as either a massive cost issue, or a valuable investment into quality of the customer experience. The silence on employee pay is the noticeable part of these videos.
Middle class is broke and regular people can't afford this place and the rich don't eat there
3:18 💄🐖
Trash food. Biscuits are good.
Photography? How about actually serving good food?!
Pay this kid millions while his employees need 2 or 3 jobs to earn a living wage.
I be there soon when I get the the chance
i like amola selaminalekum
This ninja 🥷 gonna save red lobster
I can feel it! 🦞
I can't even get a Whole Steamed lobster at the Red Lobster.
Get outs here
Im confused- did he work for PF Changs? He never really said.
If you running a seafood restaurant, you'd think you would learn how to pronounce Bairdi 🙁
Black for a CEO. This company is cooked.
This ceo has done nothing we got 8 shut down put someone else in charge
$1 billoin in debt. What happened when they were $500 million in debt with a model predicting more debt?? Where was the CFO????
Okay, food prices are higher and wages are higher. How much are the top executives and the corporation making??? Let's see their salaries and profits.
My issue was the atmosphere! I went to 3 different re lobster buildings and they were dark and depressing colors, seats, tables.
Went to Red Lobster some years ago for Shrimp Night. Walked in and was terribly disappointed that cold, boiled shrimp wasn't part of the deal. Too bad for me. I can eat my own weight in cold boiled shrimp… a little fresh lemon juice, some good cocktail sauce. Heaven.
He seems like a great fit! Wish him best of luck!
Spoiler: PRICE GOUGE customers
They done. There is no comeback. Get real. That dude is so underwater. Only God can save it.
If he can save red lobster which I rarely went to he should take over Long John Silvers next, I missed when the food came out good back in the day.
Corporations are all a game to maximize money. Parent companies buy out smaller companies in order to leach money from them and then they toss them aside.
I do not think the chain will ever make a comeback. They may keep their best performing stores open the longest and downsize operations.
Seems they made sure to interview another perspective to indirectly debate Damola's strategy. I see a man that is in touch with today's culture when it comes to the food industry. I recently dined at a Red Lobster here in PA and it was my second recent visit. The food and service was absolutely marvelous. The Bairdi Lobster with the butter garlic sauce is 🔥. If they keep it up and follow through with the remodeling I think it will be a huge success. He's on track for sure.
We used to love this restaurant, but now it's just a bad deal. We need a new CEO!
Oh man that guys might be fighting a losing battle. Being a past restaurateur their issues run soo deep for soo long there may not be a comeback. Their target customer needs to do a 180. Like most CEO changes in the restaurant business all they do is spend a boat load of money and ultimately fail, and fail in a huge way because they only focus on the obvious and don’t dive into the tough issues which at their core they know they can’t fix and end up moving on to their next victim.Sad but unfortunately true. Time will tell
Let me give you's the answer. Williams cheiflineman foreman leadman GM responsibility recommend IBEW teamster…
Bigger portions. Endless shrimp shouldn't come a few at a time. It's false advertising. Bring some family friends, random couples see without saying anything. Do speed test and amount. Endless premade no waiting. Maybe have people specifically to come not the waiter/ waitress. Pastas cheap. Rice. Salad's, drink specials.
All you can eat buffet once a week or month? Keeps things fresh. Moving
I love that he still has a hint of his motherland accent.
BLACK EXCELLENCE! 😁
That 1billion debt, who paid it ??