Red Lobster’s “irresistible” all-you-can-eat shrimp promotion has already proven to be hard to resist.
the The ultimate endless shrimp The deal was so popular that it helped drag down third-quarter profits for the restaurant chain, which had to raise the price to $25 from $20.
Thai Union Group, which has a major stake in the chain, said in a third-quarter earnings call this month that the deal was partly responsible for an $11 million operating loss.
Red Lobster had hoped the promotion would boost traffic at its U.S. locations during the fall and winter, when its restaurants are most empty.
The Ultimate Endless Shrimp has already been a “guest favorite” staple at Red Lobster for over 18 years. But the restaurant took it a step further this summer, offering its previous seasonal offering “all day, every day” instead of just Mondays.
Patrons can choose two shrimp dishes from the menu that includes shrimp Alfredo served on a bed of linguine and a skewer of grilled shrimp over rice.
“And when they’re ready for more, they can order additional shrimp selections until their cravings are fully satisfied,” the promotion said.
The show actually led to a slight increase in traffic compared to last year, according to Ludovic Garnier, CFO of Thai Union Group.
“But what was different from our expectations is that the percentage of people who chose this promotion was much higher compared to expectations,” Garnier told investors this month.
He said Ultimate Endless Shrimp was one of the “major reasons” for Red Lobster’s operating losses in the third quarter.
The estimation error, which was first reported by Restaurant business magazineprompting the company to raise the price to $22 from $20, and then eventually to $25.
“It’s one of Red Lobster’s signature promotions, so we want to keep it on the menu,” Mr. Garnier said. “But of course we have to be more careful about the entry point and the price point.”
However, he credited the renewed show with an increase in guest numbers — though he explained that the company expects to see more upside.
They hoped diners would be lured to their local Red Lobster restaurant with the deal through other menu items.
But many of them were loyal to the endless shrimp.
“This was completely unexpected, and completely different from all the numbers we had seen before,” Garnier said.
Many may have heeded the advice mentioned in Red Lobster’s promotional materials: “Insider tip: Avoid grabbing extra biscuits to make room for endless amounts of shrimp.”
Susan Beachy Contributed to research.
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