In a surprising turn of events, Red Lobster, renowned for its fast-casual seafood dining, finds itself grappling with a whopping $11 million loss due to its ambitious “endless shrimp” promotion.
The catastrophe unfolded during an earnings call in November with Ludovic Regis Henri Garnier, the CFO of Thai Union Group, a major stakeholder in Red Lobster
The decision to offer unlimited shrimp at a mere $20 aimed at boosting restaurant traffic did bring a 4 percent increase in customers in 2023, as reported by Restaurant Business. However, the surge in shrimp consumption surpassed all expectations, with patrons sharing strategies on social media to maximize their indulgence.
The unexpected voracity of diners resulted in an $11 million loss for Red Lobster in the third quarter of 2023. Despite the setback, Thai Union Group CEO Thiraphong Chansiri expressed a willingness to continue supporting Red Lobster, emphasizing the need for the chain to regain profitability.
Red Lobster has decided to keep the promotion on the menu but at an increased cost of $25 per diner
The initiative is perceived as an effort to recover from financial setbacks while finding a middle ground between pleasing customers and ensuring economic sustainability. While Red Lobster grapples with these obstacles, the Thai Union Group foresees robust results in different industries.
Specifically, there are optimistic expectations for substantial contributions to earnings in 2023 from canned tuna and pet food sales, indicating a strategic focus on diversified sectors to counterbalance challenges faced by Red Lobster.
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