Why Did The Hairy Lobster Restaurant In Portland, Oregon Close Its Doors?

The Hairy Lobster was a popular seafood restaurant in Portland Oregon that suddenly closed its doors in early 2022 much to the disappointment of loyal patrons. As a long-time fan of The Hairy Lobster myself, I was shocked when I heard the news and wanted to find out exactly what led to this beloved eatery shutting down.

After doing some digging it seems there were a few key factors that contributed to The Hairy Lobster’s demise

Financial Struggles Due To The Pandemic

Like many restaurants, The Hairy Lobster struggled during the COVID-19 pandemic. Temporary closures, capacity restrictions, staffing shortages and supply chain issues all took a major toll. Sales dropped dramatically in 2020 and 2021, making it difficult for The Hairy Lobster to pay their bills and break even.

Government programs like PPP loans helped initially, but it wasn’t enough to sustain the business over the long run. The Omicron surge in early 2022 dealt one final blow, forcing another temporary closure right when The Hairy Lobster needed a boost heading into its traditionally slower Winter months.

Increased Competition In The Area

Over the past few years, The Hairy Lobster faced mounting competition from new seafood restaurants popping up in Portland. Hip, trendy spots like The Clam Bucket, Shell Shack, and Crustacean Nation all opened nearby locations, tempting diners away with their novel menus and décor.

While The Hairy Lobster had a loyal fan base, the newer choices likely peeled away some of their casual customers who wanted to try the hot, new place in town. This diffuse competition chipped away at their business over time.

Rising Costs And Tight Margins

Even before the pandemic, restaurants like The Hairy Lobster were operating on incredibly tight margins. As costs rose for food, labor, rent and other expenses in recent years, it put tremendous pressure on profits.

Seafood costs in particular skyrocketed, but The Hairy Lobster was hesitant to raise menu prices too much for fear of alienating budget-conscious patrons. This basically meant they were earning less on some dishes than they had in years prior, making it harder to turn a profit.

Outdated Decor And Curb Appeal

Friends and I used to joke that stepping into The Hairy Lobster felt like going back in time to the 1970s or 80s. And not in a kitschy, retro way – the restaurant’s nautical theme and aging interior simply came off as dated rather than charming.

In an era where Instagram-worthy restaurant design is important, The Hairy Lobster’s lack of curb appeal and outdated aesthetics likely didn’t help attract younger diners. A facelift could have drawn in new customers, but the place looked like it hadn’t been updated in decades.

An Aging Fan Base

Here’s one bittersweet factor – The Hairy Lobster had a very loyal, local fan base, but it was primarily an older demographic. As longtime patrons aged out or dining habits changed, The Hairy Lobster may not have attracted enough new, younger customers to replace them.

Generations who grew up going to The Hairy Lobster kept returning out of nostalgia and habit. But for many younger diners, it simply wasn’t a spot on their radar. Failure to connect with this demographic left them with a shrinking base of customers.

Inability To Adapt To Dining Trends

Dining trends have shifted radically in recent years, with a much greater focus on global flavors, dietary preferences, chef-driven menus, etc. Unfortunately, The Hairy Lobster did not successfully adapt to these changing tastes.

The tried-and-true seafood dishes they’d been serving for decades fell out of step with what many Portland diners now crave. Their inability, or unwillingness, to update their offerings and refresh the menu likely accelerated their decline.

Potential Issues With Management

This is mere speculation, but some former employees have hinted at possible mismanagement issues that may have contributed as well. Waste, inefficient processes, interpersonal conflicts and questionable financial decisions were all rumored to be plaguing the restaurant group behind The Hairy Lobster.

If true, an accumulation of poor management choices could help explain their downward trajectory. Of course, this could also just be typical workplace griping. But it does make you wonder about the ownership and leadership.

The Changing Restaurant Industry

The past few years have been extraordinarily harsh on the restaurant industry. Pandemics, lockdowns, labor shortages, supply chain disruptions, inflation – restaurants are facing challenges unlike anything in recent memory.

In this climate, running a profitable, sustainable eatery is harder than ever. The Hairy Lobster ultimately fell victim to forces buffeting the entire industry. They’re far from the only locally-owned spot to close up shop, as restaurants across Portland fight for survival.

While the loss of a beloved institution like The Hairy Lobster is always sad, their closure points to much bigger factors impacting restaurants in our city and across the country. It’s the end of an era, but hopefully other cherished spots can hold on and adapt.

So for now, all we can do is raise a pint and share fond memories of The Hairy Lobster’s famous lobster bisque, ketchup-smothered crab fries, and that dessert where they lit a tower of cinnamon rolls on fire. You are missed, old friend. Hopefully we see your comeback someday!