The Impact of Tariffs on Red Lobster: CEO’s Commitment to Customers

In recent discussions surrounding the US seafood market, tariffs have emerged as a significant factor contributing to price inflation. However, Red Lobster’s CEO, Damola Adamolekun, expressed confidence that his restaurant chain will not shift these additional costs onto customers—at least for the remainder of the year.

In an interview with Good Morning America, Adamolekun stated, “We’ll pay a tariff like everybody else. That impacts our business, and our intention is not to pass that through. We’re not intending to do any more price increases for the rest of the year, regardless of what happens with tariffs.”

Understanding Tariffs in the Seafood Market

US tariffs targeting various seafood-producing countries are set to take effect on August 1. Despite this looming deadline, Adamolekun discussed his strategy to absorb these costs during an interview with Bloomberg TV. He emphasized the importance of providing value to customers, especially in today’s challenging economic climate. “Ongoing value is important to the guest,” he remarked.

Sourcing Strategies and Tariff Challenges

Red Lobster is a significant player in the seafood market, primarily sourcing 90% of its menu—especially lobster and crab—from the US and Canada. This position has allowed the chain to avoid some of the lesser tariffs. Nevertheless, with the August 1 deadline approaching, they face the possibility of steep tariffs of up to 35% if no deal is reached, as reported by Undercurrent News.

Among the various seafood items on Red Lobster’s menu, shrimp stands out. After filing for bankruptcy in 2024 and parting ways with its major shareholder, Thai Union, the company has adapted its sourcing strategy. Previously reliant on Thai Union’s shrimp production in Thailand, Red Lobster has increasingly turned to China for sourcing. However, due to tariffs imposed on Chinese imports, the company is now favoring shrimp purchases from India.

A Shift in Promotions and Customer Engagement

In a bid to provide better value to its customers, Adamolekun has indicated that the Ultimate Endless Shrimp promotion is not slated for a return. “We don’t have any plans to bring it back,” he confirmed, referencing the promotional event that cost the company $11 million. Instead, Red Lobster has introduced new appetizer deals, happy hour specials, and a three-course Shrimp Sensations deal priced at $19.99 earlier this year.

Adamolekun concluded, “We listen intently to customer comments and try to react really quickly to deliver people what they want.” The commitment to customer value remains a priority for Red Lobster, even amidst impending tariff challenges.

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