Red Lobster is upping the price of its Ultimate Endless Shrimp promotion after taking a significant financial hit.
The Orlando, Florida, U.S.A.-based operator of more than 700 restaurants globally, which is owned by Samut Sakhon, Thailand-headquartered seafood giant Thai Union, posted a loss of THB 395 million (USD 11.2 million, EUR 10.3 million) in Q3 2023 after a solid performance in Q2 2023.
In June 2023, the company announced it was making its all-you-can-eat shrimp deal a permanent fixture of its menu, instead of offering it at a limited time throughout the year.
While traffic at Red Lobster grew 4 percent during the promotion, according to Restaurant Business, Thai Union CFO Ludovic Regis Henri Garnier said during an investor call it the USD 20 (EUR 18) price tag for the deal was too low.
“We knew the price was cheap, but the idea was to bring more traffic in the restaurants,” Garnier said.
Garnier said in response to the results, the company has bumped up the price of its Endless Shrimp promotion to USD 25 (EUR 23).
As a result of the failed promotion, Thai Union revised Red Lobster’s loss guidance for this year from THB 500 million (USD 14 million, EUR 13 million) to THB 700 million (USD 19 million, EUR 18 million).
This isn't the first time Red Lobster has struggled with an all-you-can-eat promotion. In 2003, then-CEO Edna Morris was fired after an Endless Crab pilot promotion that offered unlimited snow crab backfired, costing the company USD 3.3 million (EUR 3 million).
To tackle increasing losses, Red Lobster management has enlisted the services of management consulting company AlixPartners for operational guidance. It is also receiving advisory services from Guggenheim Partners, which it has collaborated with in the past, Bloomberg reported. And in March 2023, the Bangkok Post reported Thai Union was considering an exit from Red Lobster after multiple years of losses.
Additionally, to further stem its losses, Red Lobster has introduced a new promotion to bump up sales and traffic through the holiday season. Its Lobster and Shrimp Celebration is aimed to bring winter holiday celebrations into its restaurants.
Another new dish, Lobster and Shrimp Overboard, includes ...
Photo courtesy of Red Lobster
