This Red Lobster Restaurant Competitor Is Quietly 'Dying' And The Reason Couldn't Be Clearer

The impact of COVID-19, rising labor costs, and changing dining habits are among the reasons many restaurant chains struggled in 2024 and continue to face challenges in 2025. These headwinds have caused a lot of beloved restaurants to face bankruptcy, including Red Lobster, which had to shut down about 100 of its locations. But despite these closures, Red Lobster still has hundreds of restaurants spread in 44 states across the country. The same can't be said for a Red Lobster competitor in the casual seafood dining sector: Joe's Crab Shack, which has gone from nearly 140 restaurants all over the U.S. to just 15 locations in seven states as of Halloween 2025.

Yet bankruptcy isn't the reason Joe's Crab Shacks are fading away. Joe's is one of more than 40 restaurant brands owned by Landry's Inc., and the company is willing to close down restaurants and phase out brands as "locations, markets, and customer patterns naturally change," Landry's senior vice president Karim Tamir told SeafoodSource. He added: "As a company with over 500-plus locations, some of which have been open for over 20 years, we make the strategic decision to close certain locations given traffic patterns and new developments." The trend isn't new; the Joe's Crab Shack brand has been in steady decline for well over a decade, and casual seafood restaurants as a group are losing their popularity.  

The closure of Joe's Crab Shack restaurants is hardly a new phenomenon, since the chain has been a "dying brand" for more than 15 years, Pacific Management Consulting Group CEO John Gordon told SeafoodSource. Founded in 1991, there was just one Joe's Crab Shacks in Houston when Landry's first acquired it in 1994, per Zippia. By 2006, there were more than 100 locations across the U.S. when Landry's decided to sell Joe's Crab Shack to Connecticut-based JCS Holdings LLC for $192 million, according to the Houston Business Journal. From there, JCS changed its name to Ignite Restaurant Group, started and acquired new brands, became a publicly listed corporation on Nasdaq, and then crashed and burned into bankruptcy. That's when Landry's reacquired Joe's Crab Shack, along with Brick House Tavern + Tap, at a bankruptcy auction in August 2017 for $57 million.

Even before this transaction, dozens of Joe's restaurants were being closed due to poor sales in the 2010s. But the shutdowns didn't stop under Landry's, with TheStreet listing seven closures between New Years Eve 2023 and August 2025. One reason Joe's Crab Shack continues to decline is because its not that popular, and if consumer reviews are to be trusted, it's one of the least-liked seafood chains in the nation. 

But it isn't just Joe's Crab Shacks that are shutting down. Landry's is also closing McCormick & Schmick's Seafood Restaurants and Oceanaire Seafood Rooms in California, Florida, and Texas, according to Geekspin. In some cases, these seafood restaurants are replaced with other Landry's concepts, such as Dos Caminos and Mastro's Ocean Club.

Indeed, Landry's might be shrinking the footprint of its casual seafood restaurants because they're no longer that popular. "You can get good fish at most steakhouses and upscale restaurants now. There's less reason to go somewhere that only serves seafood," said Darren Tristano, CEO of FoodserviceResults consulting firm (via Geekspin).

The casual dining sector has also taken a beating thanks to restaurant prices rising 34% since 2019, according to CNN. The trend that has encouraged people to eat at home or frequent fast-food restaurants instead of visiting their last remaining local Joe's Crab Shack. This also helps explain why Red Lobster, which is making a comeback after filing for bankruptcy, has included new Happy Hour specials and food items below $20 on the chain's revamped menu, per USA Today.