Red Lobster’s attempt to lure more customers with an expanded all-you-can-eat shrimp deal in the U.S. has backfired, resulting in an $11 million hit to their profits. The $20 Ultimate Endless Shrimp deal, available seven days a week, proved too enticing for Americans, causing a surge in restaurant traffic but ultimately leading to substantial financial losses. Ludovic Garnier, the global chief financial officer of Red Lobster’s owner, Thai Union Group, attributed the Q3 2023 losses to this promotion, stating that the $20 price point for unlimited shrimp was deemed exceptionally affordable, driving increased footfall.
While the promotion successfully achieved its goal of boosting restaurant visits, the voracious American appetite for shrimp, coupled with the appealing deal, exceeded the company’s expectations. The Ultimate Endless Shrimp deal had been part of Red Lobster’s offerings for over 18 years but was previously limited to one day a week. In June, it became a permanent menu addition, allowing shrimp enthusiasts to indulge in the $20 no-limit shrimp deal every day.
The menu included a variety of options such as coconut shrimp, shrimp linguini alfredo, popcorn shrimp, sweet chili shrimp, and more. Red Lobster responded to the unexpected demand and financial strain by gradually increasing the price of the deal, initially from $20 to $22 and eventually settling at $25.
Garnier emphasized the promotional value of Ultimate Endless Shrimp as an iconic offering for Red Lobster. Despite the need to raise prices, the company aims to retain the deal on the menu. However, Garnier stressed the importance of carefully determining the entry point and price point for such promotions to avoid similar financial setbacks in the future.
It remains unclear whether Canadian Red Lobster locations contributed to the reported losses. In Canada, Red Lobster also provides a $25 Ultimate Endless Shrimp deal seven days a week. The company has not immediately responded to inquiries for additional comments on the situation.
