Red Lobster endless shrimp deal popular company

Red Lobster's endless shrimp deal backfires, causing an $11 million loss. The chain is now increasing prices to offset losses.

Red Lobster, a popular seafood chain, recently faced unexpected challenges after launching a new promotion. The parent company, Thai Union, introduced an "Ultimate Endless Shrimp" deal for $20, allowing customers to enjoy unlimited shrimp. This promotion, which had been a tradition for over 18 years, was intended to boost restaurant traffic during slower business periods. However, the company experienced a significant loss of approximately $11 million in the third quarter of 2023 due to more customers than anticipated taking advantage of the offer.

Despite the increase in restaurant traffic, the high proportion of customers participating in the deal was not foreseen. Thai Union's CFO, Ludovic Garnier, acknowledged that the promotion was not a major money-maker for the company, but rather aimed to attract more customers. As a result, Red Lobster has had to make adjustments to the promotion, including incremental price increases from $20 to $22, and finally settling at $25.

Garnier emphasized the need for careful consideration of the entry and price points for the promotion to ensure its sustainability. While the "Ultimate Endless Shrimp" has become an iconic offering at Red Lobster, the company is taking steps to ensure its long-term viability on the menu.

Overall, the unexpected success of the promotion has posed challenges for Red Lobster, requiring strategic adjustments to maintain profitability while continuing to attract customers. The company's experience serves as a valuable lesson in the complexities of business planning and promotion execution.