How much money did Red Lobster lose on the all you can eat shrimp promotion?

Red Lobster’s iconic “Endless Shrimp” promotion has long been a customer favorite but has seemingly turned into a financial nightmare for the seafood chain. It has been reported that the US-based seafood chain restaurant, is considering filing for bankruptcy.

Its most recent financial report was certainly worrying. The company’s overestimation of their guests’ appetites and underestimation of their own costs resulted in multi-million dollar losses, raising concerns about the company’s future. The company has blamed the flagging restaurants problems on its shrimp promotion.

“We knew the price was cheap. But the idea was to bring more traffic in the restaurants,” Thai Union Group (TUG), the owners of Red Lobster, CFO Ludovic Garnier said.

So how much is the endless shrimp to blame?

Despite the statment’s from the company, there is little data online to say exactly how big an issue it is. The exact figure remains elusive. TUG confirmed a $12.5 million operating loss for Red Lobster in the third quarter of 2023, with the “Ultimate Endless Shrimp” deal identified as a key culprit. TUG itself suffered an awful Q4 in 2024 as a whole, losing some $477 million from all its companies. They are now looking to break off from Red Lobster.

“There were some significant challenges during 2023, with inflationary pressures across all markets where Thai Union operates, and an ongoing cost-of-living crisis which has impacted consumers’ spending power,” said Thai Union Group CEO Thiraphong Chansiri.

So, how did a seemingly popular promotion lead to such significant losses? The answer lies in the fine line between customer satisfaction and profit margins. Red Lobster has offered the “Endless Shrimp” deal for over a decade, with the most recent price point of $20. However, it seems they vastly underestimated just how much shrimp their customers could – and would – consume. The sheer volume of shrimp devoured by patrons, coupled with the low price point, meant the company wasn’t making enough money to cover the cost of the food itself, let alone other operational expenses.

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