Red Lobster’s endless supply of shrimp was a factor in an $11 million operating loss

Red Lobster’s endless supply of shrimp was a factor in an $11 million operating loss

Hoping to attract more customers during the summer and fall, Red Lobster will launch in June It has made one of its most popular specialty dishes a mainstay on the menu: Ultimate Endless Shrimp.

And in the past few months, the restaurant has seen an uptick in the number of customers who can Pay $20 to eat as many shrimp as you can. But the offer, which Red Lobster once described as “irresistible,” may have been too popular for the restaurant’s own good.

Thai Union Group, a Thailand-based seafood supplier that owns a significant stake in Red Lobster, said in a recent financial report that the restaurant suffered an operating loss of about $11 million during the third quarter, Restaurant Business first reported. Ludovic Régis-Henri Garnier, Thai Union Group’s chief financial officer, said on a call with investors in November that the Ultimate Endless Shrimp deal contributed to the financial loss.

“The percentage of people who chose this promotion was much higher compared to expectations,” Garnier said on November 7, according to a transcript of the call.

Red Lobster did not respond to a request for comment from The Washington Post Thursday night.

Ultimate Endless Shrimp has been a specialty dish at Red Lobster for over 18 years, usually appearing on the menu only on Mondays and on unique occasions. Red Lobster, which has more than 700 locations, made shrimp a permanent menu item in late June.

Customers start with a choice of two shrimp dishes, served with the chain’s signature cheddar biscuit, but can add additional shrimp dishes at no additional cost.

“Insider tip: Avoid grabbing extra biscuits to make room for endless amounts of shrimp,” Red Lobster said in its June announcement.

More customers have begun dining in at the restaurant than earlier in the year, but many have only ordered Ultimate Endless Shrimp, Thai Union Group CEO Thiravong Chansiri said on the call with investors. The deal was so popular that some people on social media competed to eat as many shrimp as possible in one sitting or found strategies to consume as many shrimp as possible.

Red Lobster’s third fiscal quarter ran between July and the end of September.

“Bottom line, in terms of financial performance, it did not deliver what we expected,” Garnier said in the phone call.

Red Lobster recently increased the price of the Ultimate Endless Shrimp to $25 — a change that has improved the restaurant’s operating costs, Garnier said.

However, Red Lobster is expected to lose nearly $20 million this year, according to Thai Union Group’s latest financial report.

This isn’t the first time Red Lobster has suffered financially from its “endless” promotion of dishes. In 2003, the restaurant lost millions of dollars after undercounting the number of crabs people typically eat in one sitting.

Other restaurants have faced financial problems from similar promotions, including Olive Garden, which did not run its never-ending pasta promotion in 2020 and 2021. Applebee’s failed to meet financial expectations in 2004 after introducing all-you-can-eat ribs.

Despite Red Lobster’s recent financial losses, the restaurant has no plans to give up on it Promoting unlimited shrimp, one of its signature dishes.

“We want to keep it on the list,” Garnier said. “But of course, we have to be more careful about the entry point and price point we bring to this promotion.”

Jacqueline Piser contributed to this report.

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