Red Lobster has long been known as the go-to spot for quick and casual seafood dining. However, a recent decision to introduce unlimited shrimp has proven disastrous for the company, resulting in a staggering $11 million loss. The stunning revelation was shared by Ludovic Regis Henri Garnier, the CFO of Thai Union Group, which holds a stake in Red Lobster, during an earnings call in November. The intention behind this drastic move was to attract more customers to the restaurant, but unfortunately, it backfired.
Interestingly, Red Lobster did witness a 4 percent year-over-year increase in customers in 2023, as reported by Restaurant Business. Nonetheless, the surge in customer visits couldn’t compensate for the heavy losses incurred due to the unlimited shrimp offer, available for $20 and served with their famous cheddar biscuits.
The introduction of this promotion, which was initially launched in June as a permanent addition to the menu after sporadic appearances, caused an unforeseen frenzy among Red Lobster enthusiasts. The fans took to social media platforms to share their strategies for devouring more shrimp. Dennis Lee, author of The Takeout, even offered advice on how to maximize the experience, suggesting techniques such as politely declining to have empty plates cleared or opting for lighter alternatives like the sesame-ginger shrimp skewers while wearing sweat-wicking clothes.
Red Lobster executives were caught off guard by the insatiable demand for shrimp. The excessive consumption led to an $11 million loss in the third quarter of 2023 and a projected $20 million loss for the entire year. The company attributed these staggering numbers, in part, to customers ignoring other more profitable menu items in favor of endless shrimp.
Thai Union Group CEO Thiraphong Chansiri had previously expressed his company’s intolerance for an unprofitable Red Lobster and hinted at the possibility of withdrawing support from the chain if its fortunes do not improve. The organization has a thriving business with Chicken of the Sea canned tuna and pet food, with the latter expected to be a significant earnings catalyst in 2023.
Surprisingly, Red Lobster has not completely phased out the unlimited shrimp offer. It remains on the menu, but diners can now enjoy this indulgence at an increased price of $25.