Red Lobster’s Endless Shrimp Deal Eats up $11M in Profit
In an attempt to drive more traffic to their restaurants, Red Lobster expanded their all-you-can-eat shrimp promotion in the United States. However, this move ultimately led to a staggering $11 million loss in profits.
The $20 Ultimate Endless Shrimp deal proved irresistible to Americans, becoming a significant factor in the losses incurred during Q3 2023, as explained by Ludovic Garnier, the global chief financial officer of the chain’s owner, Thai Union Group, during its November earnings call.
“The price point was $20 and you can eat as much as you want,” explained Garnier. “For those who have been in the U.S. recently, $20 was very cheap. And the rationale for this promotion was to say we knew the price was cheap, but the idea was to bring more traffic in the restaurants.”
While the company did succeed in increasing foot traffic by two percent compared to the second quarter and four percent over 2022, the overwhelming American appetite for both shellfish and a good deal forced the company to reconsider the promotion.
The Ultimate Endless Shrimp had been part of the company’s offerings for over 18 years, initially available only one day a week until June. The popular deal became a permanent addition to the menu during the summer, allowing shrimp enthusiasts to indulge in $20 unlimited shrimp every day of the week.
The variety included not only shrimp out of the shell but also options like coconut shrimp, shrimp linguini alfredo, popcorn shrimp, sweet chili shrimp, and more.
In response to the situation, Red Lobster gradually increased the price of the once-in-a-lifetime deal, first from $20 to $22, and now settling at $25.
“It’s one of the iconic promotions for Red Lobster, so we want to keep it in the menu but, of course, we need to be much more careful regarding, what is the entry point and what is the price point we’re offering for this promotion,” Garnier said.
It remains uncertain whether Canadian Red Lobster locations contributed to the reported losses. Currently, Red Lobster in Canada also provides a $25 Ultimate Endless Shrimp deal seven days a week.
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