….the offer was too popular…….the $20 Ultimate Endless Shrimp’…….


Red Lobster says unlimited shrimp promotion was too popular and too cheap

....Red Lobster's parent company, Thai Union Group, disclosed earlier this month that the seafood chain took an unexpectedly large loss in the third quarter of the year because its $20 shrimp promotion wasn't very profitable and was more popular than the company anticipated.

"The proportion of the people selecting this promotion was much higher compared to expectation," Chief Financial Officer Ludovic Garnier said in Thai Union Group's investor and media presentation Nov. 7.

Red Lobster has had an all-you-can-eat shrimp promotion for years, but this year it changed the shrimp deal from a limited-time offer to a permanent one. The company wanted to boost traffic in the third and fourth quarters of the year, when its business tends to slow down.

Garnier said the strategy worked, bringing in customers and bolstering Red Lobster’s market share. But the improvement wasn’t as large as the company expected, and combined with the low margins on the surprisingly popular deal, that presented a problem.

He said U.S. consumers are getting more budget-conscious, meaning they are eating at less-expensive restaurants and even ordering cheaper items when they go out. That contributed to the unexpected popularity of "Ultimate Endless Shrimp."

While the deal brought in some more customers, Garnier's comment suggested that people who might have ordered something on the menu that was more lucrative for Red Lobster instead traded down to the unlimited shrimp instead.

"We knew the price was cheap, but the idea was to bring more traffic in the restaurant," he said.

In response, the company gradually raised the price on the shrimp item from $20 to $22 and now $25.

“It’s one of the iconic promotions for Red Lobster, so we want to keep it in the menu but, of course, we we need to be much more careful regarding what is the entry point and what is the price point we’re offering for this promotion,” Garnier said.

The company had expected Red Lobster to lose money in the second half of the year, but it lost more than Thai Union Group anticipated because of that shift in consumer spending and the performance on the "Ultimate Endless Shrimp" promotion.

Combined with problems in other divisions, that contributed to Thai Union Group saying it will take a larger loss this year than it originally expected.

Thai Union Group invested in Red Lobster in 2016 and, combined with a group of other investors, it bought the rest of the company from Golden Gate Capital in 2020.

Bloomberg News reported in March that Thai Union Group might sell its stake in Red Lobster if its performance didn't improve......


……people love…….shrimp……?!

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I reject your reality and substitute my own!



Edited 1 time(s). Last edit at 11/30/2023 04:26PM by NewtonMP2100.

That has happened to them before. In 2003 an endless snow crab promotion nearly bankrupted the chain and led to the firing of the company president.

[www.mashed.com]


You would think someone would have learned their lesson the first time.

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“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias

The German word for contraceptive is “Schwangerschaftsverhütungsmittel”. By the time you finished saying that, it’s too late

My boys would have competitions at Endless Shrimp night that I'm sure had the manager sobbing.

The last time I ate an "Eat all you can" was probably 20 years ago. Because I would eat all I could. In those years the only time we went to one of those buffet places was when my (anorexic!) MIL wanted to go. So, we'd go, she'd eat almost nothing, the others would eat normally and I'd try mightily not to get my money's worth.

most AYCE places now impose time limits on your consumption function.

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So get back to work and sweat some more
The sun will sink, and we'll get out the door
It's no good for man to work in cages
Hits the town, he drinks his wages
You're frettin', you're sweatin'
But did you notice you ain't gettin'?

A month or two ago, the local restaurant stated you could NOT bring home any leftovers from endless shrimp.

The current offer is 2 kinds of shrimp for $17, 3 for $20 and endless for $25.

Darden, the parent company, has been on shaky ground for some time.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

Darden sold off Red Lobster back in 2014. If you clicked on the article above, you’ll find Red Lobster is owned by the Thai Union Group.

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Ombligo

[www.mashed.com]


You would think someone would have learned their lesson the first time.

Multiple owners/operators over years often leads to loss of institutional memory.

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Forrest
Darden sold off Red Lobster back in 2014. If you clicked on the article above, you’ll find Red Lobster is owned by the Thai Union Group.

Thank you for the correction!

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.