In a major blow to Red Lobster, the popular seafood restaurant chain has announced the abrupt closure of at least 99 locations across the United States. Restaurants in 27 states will be shutting their doors, as the company grapples with mounting financial challenges.

Tagex Brands, a company specializing in restaurant liquidation auctions, revealed that Red Lobster recently approached them to auction off items from 52 locations that are set to close. This move comes as Red Lobster seeks to consolidate its debts, with the possibility of filing for Chapter 11 bankruptcy as early as next week, according to insiders familiar with the matter.

Earlier this year, Red Lobster faced significant losses attributed to its "Ultimate Endless Shrimp" promotion. The seafood chain's former investor, Thai Union Group, which is based in Thailand, shared during an earnings call that the promotion had contributed to an operating loss surpassing $11 million in the third quarter.

Ludovic Garnier, Chief Financial Officer for Thai Union Group, expressed surprise at the disproportionately high volume of customers who opted for the promotion. He explained to ABC News that "the proportion of people selecting this promotion was much higher compared to our expectations."

Financial reporter and affordable lifestyle expert Jennifer Streaks suggested that Red Lobster may have overestimated consumer appetite for pricier dining experiences, especially with inflation prompting Americans to be more cost-conscious. Streaks pointed out that consumers now seek value when dining outside of their homes, which has led to a rise in popularity for fast casual chains.

She further emphasized that while Red Lobster may offer fast service, it still falls within the expensive dining category due to its focus on seafood. This could explain why consumers opted for more affordable options elsewhere, leading to financial strain for the restaurant chain.

As more and more Americans tighten their purse strings, restaurants that can provide good value for their price are gaining favor. Red Lobster's struggles highlight the need for businesses to adapt and cater to changing consumer preferences.

Red Lobster has not yet released an official statement regarding the closures or any potential plans for restructuring. However, with the impact of the pandemic and the changing dining landscape, it remains to be seen whether Red Lobster can weather the storm and regain its status as a leading seafood restaurant in the future.