Red Lobster, the world's largest seafood restaurant chain, has filed for bankruptcy in the United States, citing an inability to compete and a substantial debt burden. The company, renowned for making lobster affordable for middle-class Americans, has initiated the process of winding up its business operations, according to CNN.

Red Lobster, famous for its delicious lobster offerings, grew to become the largest seafood restaurant chain globally. However, the company recently faced significant challenges. Various factors, including increased competition and operational missteps, led to mounting losses, resulting in the closure of multiple branches. Despite efforts to salvage the business, the company ultimately could not overcome its financial difficulties.

A notable point in Red Lobster's decline was the mishandling of its popular Endless Shrimp menu. For nearly 20 years, the company offered this limited-time menu item, which became a significant draw for customers. However, the Thai Union, Red Lobster's largest partner since 2020, made critical errors in managing this offering.

Thai Union, a Bangkok-based canned seafood company, leveraged the popularity of the Endless Shrimp menu to sell large quantities of shrimp. When Red Lobster incorporated the $20 Endless Shrimp into its regular menu last year, it resulted in a $10 million loss for the company.

The financial strain culminated in Red Lobster filing for bankruptcy on May 19, 2024. The decision marks the end of a significant chapter in the seafood restaurant industry, as Red Lobster had long been a favorite among seafood lovers for its affordable and tasty offerings.

As the company proceeds with winding up its operations, the bankruptcy filing underscores the challenges even well-established brands can face in a competitive market.