Buzz
For years, Red Lobster has been a go-to destination for casual seafood dining. However, a recent offer of all-you-can-eat shrimp has turned into a disaster: Americans consumed so much shrimp that it ended up costing the chain $11 million.
As reported by The Washington Post, the issue emerged during a November earnings call with Ludovic Regis Henri Garnier, CFO of Red Lobster's parent company Thai Union Group. 'We knew the price was low, but the goal was to increase restaurant traffic,' Garnier explained during the call. 'We aimed to drive more business, but it didn’t work.'
In reality, it did. Restaurant Business, which was the first to highlight the shrimp dilemma, points out that in 2023, Red Lobster saw a 4 percent increase in customer visits year-over-year. However, that wasn’t enough to offset the $20 shrimp deal, which promised an endless supply of shrimp and their famous cheddar biscuits.
The promotion, which was introduced in June as a permanent feature after several temporary runs, became such a hit that Red Lobster enthusiasts began exchanging tips on social media to maximize their shrimp intake. Dennis Lee of The Takeout offered his strategy back in 2018, writing, 'When my server comes to clear my plates, I kindly refuse. I prefer they remain at my table, piling higher as the night goes on, a testament to my victory.' Lee also recommended wearing sweat-wicking attire and opting for the lighter sesame-ginger shrimp skewers.
The company's response to people's insatiable appetite caught them off guard, according to Garnier. The shrimp consumption was so excessive that Red Lobster reported a $11 million loss for Q3 2023 and is predicted to face a $20 million loss for the entire year. The company attributes these losses partly to its overly generous servings and customers choosing endless shrimp over other, more profitable menu options.
Thiraphong Chansiri, CEO of Thai Union Group, had earlier warned that his company wouldn’t continue backing an unprofitable Red Lobster and might pull away from the chain if its financial performance doesn’t improve. The group generates significant revenue from Chicken of the Sea canned tuna and pet food, with the latter expected to drive considerable profits in 2023.
In a surprising move, Red Lobster is not entirely abandoning the promotion. It is still available on the menu, but now diners will have to pay $25 for the opportunity to indulge in endless shrimp.
